May 12, 2009

U.S. companies turn to furlough option

U.S. companies and even governments are resorting to work furloughs to avoid layoffs, human resources consulting firm Hewitt Associates said.

A Hewitt survey concluded that out of 518 businesses, 70 percent had either initiated furloughs or were considering them, The Boston Globe reported Tuesday.

WGBH, a media company, said its managers and other employees would be furloughed for a week to save $500,000. Gentle Giant Moving Co. employees choose a four-week furlough to avoid layoffs, the newspaper said.

Massachusetts Gov. Deval Patrick has even asked state senators to accept furloughs to help trim the state's budget.

While workers sit at home or head to the nearest unemployment office, I think you tolerate more in the current environment than you would in a stronger economy, said Fred Foulkes, a Boston University professor of organizational behavior.

Bottom line: It really is considered an important technique to save some jobs, Paul Shafer at Hewitt Associates said.