Furlough Vs Layoff Vs Termination

 Any businessman strives to make their business grow and blossom but at times, it is not the case. Human resource management is one of the most important functions of a business.

The business may experience a downturn which forces the business owners to cut on some costs. One of the biggest expenses is normally on salaries. Naturally, the business owners are forced to scale down on the workforce. 

When a company is going through hard times, the workers are exposed to layoffs, termination, or furlough. As the manager of a company, you will have a hard time with workers since no matter how far you are when executing the three, you are likely to experience bitterness, resentment, and meltdowns.

Even though employers use the three terms when scaling down on workers, most of them may not know their differences. In this article, we are going to discuss the differences between furlough, layoffs, and termination and their benefits. 

What is Furlough? 

Furlough is the reduction of working days, working hours and to some, reduction of their pay temporarily. Most companies apply furlough whenever they experience unforeseen changes that may affect their company and which may affect the company thus may be unable to operate in its full capacity.

Whenever furlough is applied to an employee, they only work for a few hours and days but resume when the business resumes full operation. 

What is Layoff? 


Layoff refers to resigning from official duty. In case of a layoff, the employees are requested to resign mostly because of economic slumps. Layoffs may therefore be temporary or permanent depending on the market situation. 

What is Termination? 


Termination refers to the permanent dismissal of a client from a place of work. An employee may terminate their services voluntarily or they get termination from the company. It is important to note that, termination must be done legally to avoid problems with the law. 

Furlough Vs Layoff Vs Termination 


Furlough, layoff, and termination are methods that human resource managers use to reduce the labor force. The purpose of using either of the methods may differ. Furlough is temporary.

The employees are released on unpaid leave for a given period. This means that the employees will still maintain their employment status at a company. Layoff happens when a company shuts down its operations or when they are restructuring.

Depending on the circumstances surrounding the company, the layoff may be either permanent or temporary. Termination is permanent. It happens when an employee breaches the terms of the contract or when their contract comes to an end.

If the management does not suggest a renewal of the contract, an employee seizes to be an employee of that company.

Furlough, Layoff, or Termination? 


Every employer has to think through before executing either furlough, layoff, or termination. They must try all means to be fair enough to the employees even though most often, it ends with bitterness and resentment especially when the employees are not psychologically prepared.

The best thing employers can do is assessing the situation at the company early enough. This will enable them to prepare their employees for layoff or furlough early enough to avoid conflicts when it happens. As an employer, you can even involve the employees in decision making.

Taking them through the process enables them to see the process as fair thus no resistance when the managers inform them of their decision. Termination is mostly automatic.

The employees are aware of the breach of contract and when the contract comes to an end they have to leave the organization or company. It is important to note that, no company would want to let go of their employees unless circumstances dictate so.

The best and most intelligent thing the managers can do is to remain transparent with their employees. This will help them avoid resistance when they use either furlough, layoff, or termination methods on employees.

Related Posts