Furlough Planning: An Art and a Science Supported by Technology and Sound Change Management

Kathie Topel, Director Organizational Transformation
Andrew Prabucki, Associate Director Business Performance Improvement

As many companies fight for survival in the current business environment, project teams may find themselves revising schedules to accommodate furloughs and abbreviated timelines. While this sounds like, and often is, a chaotic situation forced by an extraordinary event, business intelligence tools can bring rhyme and reason to the chaos, and alleviate much of the anxiety experienced both by those furloughed and those left to run the business in survival mode.

Improving the availability of data and developing insightful visualizations and dashboards are techniques that are well-applied to a broad range of business problems. By applying data visualization and workflow automation not only to traditional processes like billing, but also now to furlough planning, businesses can avoid crucial errors and delays that affect short-term cash flow.

Many businesses adopted a furlough strategy in response to a reduction of cash flow attributable to COVID-19. Unlike layoffs, furloughs recognize the temporary nature of the pandemic. They are undertaken because the business is hoping to retain its high-performing staff but either rotate them or use them on a reduced schedule to manage the continuing work while controlling costs during a sudden revenue drop. Currently, this strategy is complicated by the fact that even this remaining workforce was abruptly required to work remotely. Ensuring that rotating employees have the information to reenter a workstream and pick up where another colleague left off is critical to a furlough plan – and challenging to execute without thorough process transparency.

Workflow automation and data visualization technologies provide the means to identify who is working on what at all times, how best to cover for furloughed employees in their absence, and how to speed up their reentry into the workstream upon their return. For managers, the same technologies can provide easily accessible, graphical information to help them identify problems and delays and enable them to intervene rapidly, despite the disruption.

Successful organizations, however, not only leverage the available data for better planning; they also consider the human factor – how will these furlough disruptions impact their people? When formulating a furlough strategy, the ability to execute change management ensures alignment with the organization’s financial and operational goals.

Intelligent Furlough Planning With Technology

Furloughs can be surprisingly complex to plan effectively, and many businesses struggle to understand which team members must continue to work for the business during a sudden downturn. Examining the dollar value of work in process or inventory is not particularly informative in this decision-making process. Neither is assessing the cost of each worker. It’s more meaningful to focus on sales and transaction volume and to consider which roles contribute most directly to building up short-term cash flow. Accounting clerks, for example, often have more to do with making bank deposits than more senior roles do.

To schedule furloughs strategically, businesses should consider which roles tie directly to cash flow cycle activities. These roles typically include sales, billing and collections. Paradoxically, we often see these teams reduced first, including in the current pandemic environment when increasing sales and collections is paramount. Billing promptly is evermore essential as clients extend payment terms, and prompt collection efforts are crucial to accumulate the cash that the struggling business needs to survive. In addition, it is smart to prioritize the technologists who enable and support the multitude of employees who have recently begun working remotely.

Process Visibility and Optimization

As COVID-19 forces change, leaders will be monitoring recently updated processes closely to detect impacts to the financial picture as early as possible. Data visualization tools are ideal for business scenarios like this because they process complex data to generate graphical representations that deliver insights and support rapid intervention.

For example, data visualization can be used to measure and monitor pre-defined cycle time thresholds and take action when these thresholds are exceeded. This is particularly important with a remote workforce that cannot be supervised directly. As data is processed in real time, the business can make more agile, informed decisions to remain flexible and maximize financial results.

Data visualization is not as simple as pushing a button. Often, that data is locked away in transaction processing systems. Utilizing it requires not only data visualization technology, but also specific expertise to integrate the software and the skills to model processes using relevant data. Successful data visualization efforts call for expertise not only in a specific technology, but also in business process optimization. It’s the marriage of these disciplines that creates meaningful data visualizations to support decision-making.

Sensitive Furlough Planning With Leadership Support and Change Management

The disruptions caused by COVID-19 and furloughs impact an organization’s people, perhaps the most. It’s critical to undertake such drastic operational changes as sensitively and with as much empathy as possible. How the organization approaches these changes will impact the trust previously embedded in its culture and the extent of the efforts needed to restore trust once the recovery is underway. Leaders will want to consider change management as a central component to any furlough strategy. Top executives must be engaged to help determine and support the strategic direction. Senior leaders will want to consider the following questions as they shape furlough strategy:

  • What are the financial and operational objectives of the furlough strategy? How does the strategy align with the organization’s financial and operational goals?
  • How will the furlough strategy impact the organization’s people and culture?
  • How will we engage managers to support and implement the furlough strategy for their teams?
  • What measurements should be monitored to confirm the objectives of the furlough strategy are being met?
  • What alignment, communication and training strategies should be implemented to ensure individuals are supported as they adapt to furlough schedules?

As more businesses are faced with decisions to implement a furlough strategy to survive in today’s challenging business climate, many will choose solutions that combine data visualization with workflow automation. Whether such changes are adopted permanently, adopted with modifications, or dismantled once the pandemic is over remains to be seen – but if the changes are successful, a complete return to the old ways is unlikely. With recovery, some businesses may start to bring employees back; the same visual, data-driven processes used to plan furloughs can then be deployed to reassemble office teams in a safe, thoughtful and organized manner. Whatever combination of approaches a business chooses to adopt in the post-pandemic period, data-supported decision-making and a sound change management strategy can help ensure a successful transformation going forward.

Melanie Tran, Aaron Ragusa and Joe Zedan from Protiviti’s Business Performance Improvement practice contributed to this content.

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