The Rehiring Aftermath
With states issuing stay-at-home orders and mandated shutdowns, businesses have had to lay off workers due to the toll it's taken on the economy. In fact, a new report from Facebook, according to CNBC, found that of the 86,000 small business owners surveyed, only 45 percent said they would rehire the same workers that they had furloughed or layed off.
Luckily, as auto repair businesses were deemed essential businesses, a complete shutdown wasn’t necessary, but some still had to furlough or layoff workers to ease the blow of the slow business weeks ahead. From the Ratchet+Wrench Industry Survey, only 23 percent of respondents said they had to lay off or furlough employees. Most owners, however, turned to furloughing employees instead of laying them off completely, which allowed employees to have a job waiting for them when the low of the lows was over.
Here’s why shop owners were able to bring employees back through furloughing instead of giving workers the boot.
Furloughing Versus Laying Off
Of those who responded as having to cut back on staff, most owners opted to furlough staff instead of lay off.
While laying off an employee cuts ties between the business and employee completely, furloughing, in other words, is like a required unpaid leave of absence, where employees go without work for a certain amount of time, but still earn their benefits and are guaranteed to have their position waiting for them when business picks up again, according to Business Insider.
When the COVID-19 pandemic hit, Dan Moyer, owner of Metric Motors in Loveland, Colo., wanted to avoid having to send any of his employees home without work. But as the pandemic really started to set in, he says he started to notice the phone ring less and less. And when that happened, he knew he needed to prepare.
Pre-pandemic, Moyer had little to no idea of what furloughing an employee actually looked like, but he wanted to make sure that whoever did have to take a step back from work was well taken care of and knew they had a spot waiting for them. So, right before business started to take a plunge in the last week of March, he tried to gather as much information as he could, even sitting through a webinar on the ins and outs of furloughing and laying off.
Making the Call to Furlough
Thankfully, Moyer only had to furlough one full-time employee and one part-time employee, and he got lucky doing so—he didn’t have to choose someone to furlough. Instead, someone on the team actually volunteered to furlough, unlike the rest of his crew.
Ron Goiorani, owner of Lodi Transmissions in Lodi, Calif., wasn’t quite as lucky. He had to make the decision himself. During the last week of March, the shop’s workload came to a halt and Goiorani sent five full-time workers—one service writer and four technicians—home to take advantage of unemployment. Goiorani was still able to take care of these employees. The shop’s healthcare company created a few policies when the pandemic began, which included deferring healthcare payments for 30 days and having an additional 30-day grace period on top of that. All in all, Goiorani was given two months to pay his staff’s healthcare bills, which allowed him to keep his staff’s healthcare intact.
Taking Advantage of Loans
A big help for bringing back employees? The abundance of coronavirus business loans.
It was always Moyer’s intention to bring his staff back on, but in order to ensure their spot, he applied for the Paycheck Protections Program (PPP). Once he was approved four weeks after applying, he was able to bring back his two workers and even hire more workers on. Now, he’s back up to a total of six workers in the shop.
For Goiorani, he credits the loans he received for getting his shop back on track. Before applying for and receiving both the PPP and the Economic Disaster Injury Loan (EIDL), no worker at the shop was guaranteed a spot back after the pandemic was over. With these loans secured, he was able to easily bring all of his staff back on when work picked up in May.
Making Staff Feel Valued
While Moyer’s staff volunteering made many decisions easier, Moyer still wanted to make sure his two staffers that were furloughed felt valued at his business. During the four-week period the two staff members were furloughed, he checked in on them a few times per week to see how they were doing and if he could help them out in any way.
On top of that, Moyer gave the two employees the option to come back when they had enough work for them to do so. While the apprentice came back after four weeks, his full-time employee asked to take an extra two weeks of being furloughed for himself. And while Moyer did have work for him to earn some money, he gave him the time to enjoy. Now, he’s back at work, and instead of viewing those six weeks as being unemployed, he viewed it as some extra unpaid vacation time.