Reduction of Office Rental and Mortgage Costs– If the workforce is furloughed, operations can be paused, reducingoverhead costs, including rent and utilities, particularly innon-essential or closed facilities.
Increased Near-Term Labor Demands Anticipated– Furloughs are temporary; they preserve the workforce for aquick return to operations, ideal whenbusiness recovery is expected soon.
GPHR Study Guide Extract – Workforce Relations and Risk Management / Downsizing and Alternative Workforce Strategies:
“Furloughs are temporary suspensions of employment where employees retain their jobs and benefits but are not actively working. They are advantageous when short-term cost reduction is needed, and the organization anticipates a rebound in labor demand.”
Layoffs, by contrast, are often permanent and lead tolonger rehiring cyclesandpotential loss of skilled labor.
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