A guide to furloughing

Reputations are made in times of crisis. Today we are facing the biggest crisis of our generation and our actions will speak louder than words. This has never been more important than today when the decision about whether to furlough staff is a reality. What you do for your staff now and how you treat them over this period will be remembered long term.

Have a plan in place

It’s essential you have a well thought out plan in place. We hope we don’t have to use it but it’s critical that we’ve considered the possibility. Like most businesses, things are so fast moving, that our situation could change overnight. In that instance, we want to ensure staff have jobs to come back to and furloughing provides a very vital lifeline. 

Ultimately, furloughing gives businesses the best opportunity to survive. It’s a positive step. The key is implementing it positively.  

Use cashflow forecasts

Base your plan on forecasted cash flow. For example, by forecasting the number of orders, we can work out the resources needed in each department. Things are changing all the time so we need to forecast on a weekly basis, allowing us to make an informed decision. Using this as a barometer, be prepared to implement furlough in waves, in line with the needs of the business. 

Identify staff based on resource need

When it comes to who, I’d recommend a two-tier approach. Firstly ask for volunteers, as some employees will welcome the opportunity for health or childcare reasons. Then base further decisions on the skills needed to service the current needs of the business.

Treat staff with respect

When you make the decision to furlough staff, you must communicate with empathy. Clearly explain to everyone why you’re taking this decision and get them to look at the bigger picture with you. It’s likely that managers will understand, but less senior employees may not have the insight needed to see the wider context. For this reason, make yourself available to all staff members, furloughed or not, and put yourself in their shoes when they come to you with questions.

When announcing the decision, manage communication on a one-to-one basis, telling furloughed staff ahead of their colleagues, and ringfence time to be available for follow up questions. Additionally give them access to your HR team and share a clear timeline of when the situation will be reviewed. 

Managing the remaining workforce will also require skill. Some will be very worried that they will be furloughed in a further wave, while others may feel they’ve now got too much work to do. That’s why we will only furlough if we really have to, to prevent the impact on the people left behind. 

Get the right advice

In terms of accessing the funds, the process looks very simple. It’s based on the PAYE system and will be administered online via a dedicated portal, soon to be launched. For anyone who’d like extra guidance, I’d recommend signing up to a HR subscription service where you can access advice at a fixed rate. 

Future proof your decision

Furloughing is a brand new concept and there are no precedents to guide best practice. My advice is to deal with it in a similar way to redundancy. Be very careful to document your decision making process as it’s essential to keep a record showing why you’re doing it and how you’re communicating the decision. Additionally, seek advice from a solicitor with HR expertise - the Law Society has a useful database. 

Managing as a leader

It’s a very stressful time to run a company. The situation is unprecedented and the issue of whether to furlough is a real grey area. People have wildly different thoughts. All you can do is trust what’s right for you. I talk to other CEOs in my network and use LinkedIn to see what larger companies are doing. Ultimately, though, furloughing is there to help the whole business community and give you the best opportunity to survive. It should be supported so we come out the other end ready to thrive.

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