As the war against the COVID-19 pandemic wages on, front page headlines regularly report layoffs and furloughs across all sectors. For most business owners, one of their largest and most important assets is their people. Managing a workforce is no small task even in normal business environments. When the going gets tough, management and ownership teams are often faced with the need to rightsize their employee base in order to manage costs and sustain the core business. Perhaps no industry has felt more pain than the consumer service industry, which relies on a large workforce to deliver services like hospitality, dining, events and travel.
For companies that are forced to make the difficult decision to manage or rightsize a workforce to ensure the future of the business, there are three primary strategies: pay or hour reductions, furloughs or layoffs, as outlined in the nearby table. Management teams should factor company size, nature of underlying operations, general health of the business and makeup of the employee base into the decision as to whether and how to approach rightsizing. For any option, it is important to consider implications for the employer and the employee(s) to ensure as smooth a transition as possible and minimize further disruption to daily operations.