Furloughs -– the practice of ordering employees to stay home without pay for a short time –- have grown in popularity as countless corporations, schools, non-profits and governments attempt to weather the economic recession without conducting more layoffs. The most publicized furlough program in the nation –- that of California’s state workers –- was expanded on July 1, when Governor Schwarzenegger added a requirement that workers take an additional unpaid day per month, bringing the total from two to three. And as we hit mid-summer, we're in prime furlough time: employees are notably more willing to take time off during the traditional “vacation” months. That means it is the perfect time to think about whether furloughs could help your organization... and if so, how you can sweeten the deal for your employees. Here we cover the good, the bad, and the things that HR should ponder. The good:

• Staff can unite through a sense of sharing the burden at every level (make sure management is furloughed, too)
• Furloughs are more popular when presented as a way to avoid layoffs
• Workers who have felt too busy to take their full leave are often relieved to be ordered to do so -– even if it is unpaid

The bad:

• Companies don’t actually save that much on the process, as salary typically makes up about 60 percent of an employee’s cost (the rest is overhead in the form of benefits, office space, and equipment)
• Customers can feel short-changed if they are exposed to gaps in service
• Furloughs can send a troubled message to potential clients and investors

The things to ponder:

• Some places (the California DMV, pictured above, for example) shut down on certain days each month, but other places institute rolling furloughs. Would your organization be better served by staggered time off, or company-wide shutdowns?
• The laws regarding furloughs can be complicated when it comes to exempt employees. Fully research the issue to avoid legal troubles, and make certain that exempt workers on furlough do not muddy the waters by taking phone calls or sending email when on a furlough.
• Some companies utilize furlough banks, where employees can trade and bank furlough time. If one employee can convince another to take their furlough days, this arrangement is accepted and “banked.” This way, employees who actually want an extended unpaid sabbatical (and you know they're out there) can lift the burden off of others who would prefer to stay and work.

If your company is thinking about furloughs, there is a lot you can do to sweeten the perception among employees. Emphasizing the shared burden, showing flexibility on timing, and allowing employees to trade situations using a furlough bank are some of the top ways to make this tough scenario work well. Do you have any tips on furloughs? Share in the comments!