Why your furloughed employees may not return – and what to do about it.

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Countless employers had to make the tough decision to furlough valued employees as a result of the global pandemic’s financial impact. Now that many states are allowing non-essential businesses to re-open to varying degrees, employers are facing yet another challenge: furloughed employees who do not want to return. No matter the reason for employees’ reluctance to return, hiring managers need to anticipate this scenario and develop a plan to ensure their workplace is appropriately staffed during the re-opening process and beyond.

Under the financial pressure caused by the coronavirus pandemic, employers asked some or all of their employees to take a furlough, or temporary unpaid leave, with the agreement that their job would be open for them as soon as business got back to (or closer to) normal. The furloughed employee could collect unemployment benefits during this time to ease the financial burden of losing their regular pay.

As workplaces start re-opening now, why aren’t some furloughed employees going back to the jobs that have been “held” for them?

  • Financial Conflict: As it turns out, unemployment benefits combined with the extra CARES Act benefit of $600 per week is in many cases more than the furloughed individual was earning while working. Many employees are choosing to remain unemployed and get paid more, rather than go back to work making less money. That is a temporary situation, though. The CARES Act “bonus” expires July 31, 2020. Further, if you officially call your employee back from furlough, they cannot continue to claim to be unemployed and receive their unemployment payments – a practice which could constitute fraud. Nonetheless, employees’ financial needs are bound to be a common issue raised in the “return to work” conversation.
  • Safety Concerns: Some employees are fearful about coming back and being exposed to coronavirus in the workplace. This is a tricky area because you want to be sensitive to your employees’ concerns. You should also work closely with your legal counsel to help ensure you are not discriminating against any individual with disabilities, under ADA guidance. Even if you have taken extensive precautions to ensure your workplace complies with CDC and state and local safety guidelines, there will inevitably be employees who are just not comfortable coming back. This is a situation you need to address in company policy, but you’ll also need to determine how you’ll fill the role of an employee who chooses not to return.
  • Greener Pastures: Some furloughed employees took their leave as cue to look for a new job immediately – and some found them. Despite record unemployment, several industries have been hiring robustly, benefitting from a plethora of quality candidates who had been let go by companies that did not weather the pandemic as well. Certain furloughed employees simply will not be available because they have chosen to (or had to) move on, whether it was for immediate financial needs (contrary to the previous scenario, unemployment benefits are not always enough to sustain a higher-earning employee) or long-term career stability (some employees may reason that if they’re subject to furlough now, what’s to prevent another similar situation in the future).

Solutions for Employers

No matter what the reason for your furloughed employee’s inability to return to your workplace, you need to figure out how to ensure your business is appropriately staffed as you re-open and look toward the future. Hiring is a complicated landscape right now, as some businesses may not be able to accurately estimate their workforce needs in the next weeks, months and year. Further, employers have a lot to deal with when it comes to re-opening. Just when you thought you could rely on your furloughed employees to return, they may not – which means you need to start the time-consuming and expensive process of hiring on top of everything else you have to manage. Flexibility, saving time, and cutting costs will be key to your plan.

Temporary Employees?

Temporary options enable you to scale your workforce depending on today’s need. By hiring temporary employees, you can expand or shrink your workforce on demand, as well as extend or close assignments as needed. Additionally, the staffing firm already has screened professionals who are ready to fill your open position today. The firm takes care of the hiring and payroll processes, so you’re not going to the expense and effort involved in hiring new employees. The staffing firm’s recruiters are also connected with candidates throughout the area. It’s their job to find, meet, interview, and screen jobseekers with varying skills and experience – meaning you don’t have to do the legwork involved in posting a job and sorting through and screening candidates.

Payrolling Services

A payrolling service is a great option to save time and money. Whether re-hires or new employees, the payrolling firm is the employer of record and handles all the employment paperwork, insurance, employment taxes, and benefits, plus they manage payroll. This is one less expense and process for you to worry about and provides your organization with flexibility to navigate the uncertain months ahead. For example, a business could choose to bring employees onboard via a payrolling service, then as business stabilizes over the coming months, transition them onto their own payroll.

Professional recruiters handle the process

Of all the things you know you have to think about as you re-open your workplace, hiring may not have been on your mind. However, with some employees not returning, it’s a reality you have to deal with. Plus, with record unemployment, you’re likely to see significantly more applicants for open positions than you have in the past.

A professional recruiter can help employers sort through the multitude of resumes, as well as coordinate the interviewing and screening processes. An essential part of any good recruiter’s job is networking with top talent, which means they are already connected with job seekers who are right for your open positions. Letting a professional recruiter handle this aspect of your business frees you up to focus on the many complicated matters involved in getting your workplace running again.

What about employees who do return?

We’ve talked a lot about the scenario where furloughed employees don’t return to your company. But what about those who do? Don’t assume everything will simply go back to normal as if you’re all traveling back in time to the pre-pandemic era. The past few months have been traumatic for everyone. According to Qualtrics’ s data: “The unknown may have a bigger impact on mental health than even losing one’s job. Furloughed workers are 37% more likely than those who have been laid off to report declines in mental health.”1 An emphasis on transparency, assurance regarding safety measures being taken in the workplace, and showing that you care for employees will go a long way right now in welcoming back – and retaining – your employees.

A note on PPP and furloughed employees

The situation of having furloughed employees not return is further complicated for small businesses who received PPP loans. These businesses are supposed to use the funds toward payroll – but how can you do that if your employees don’t return? According to small business expert, Merchant Maverick: You won’t be penalized “as long as you document the employee’s rejection of your offer (and the offer is for the same compensation and number of hours). However, to qualify for PPP loan forgiveness, you will still have to spend 75% of your loan on payroll expenses, which include employee compensation, taxes, and benefits. So, you will likely need to hire new employees if some of your old employees will not return.”2

For more information and tips on re-opening your workplace, check out our complimentary eBookA Guide to Re-Opening Your Workplace Post-Quarantine: What Employers Should Consider.