Reduce Your Costs - the Furlough

Making tough choices is a big part of running any business, especially during an economic downturn. And no decision is harder to face than that of laying off employees.

There can be a somewhat pain-free solution, though: implementing mandatory days off without pay (also known as furloughs).

That's what D.D. Ford Construction of Santa Barbara, California, did in response to the stock market tanking and the housing market collapsing in the fall of 2008. President Doug Ford, charged with significantly cutting his monthly expenses, was preparing for a round of layoffs when his human resources manager suggested the furlough alternative.

Ford went forward with the plan, and it allowed him to temporarily, but quickly, cut $60,000 off his monthly payroll while avoiding the permanent pain of layoffs and costs of rehiring and retraining. "We were also able to keep the employees' benefits in place," says Ford. In addition, some states, like California, enable employees to collect unemployment for those days they are furloughed.

By Toddi Gutner. Read More >