With Coronavirus now a pandemic, it's safe to say your company can expect interruptions if it hasn't already felt them. While some may decide to send employees home to work--and wait out the early stages of this storm--others will have to decide if more drastic steps are in order. I'm talking about layoffs. 

It's worth noting that they should be avoided. Layoffs are expensive and they are only getting more costly. So before you start down that road, answer the following questions:

1. Who makes up your core team? 

If you had to restart the business tomorrow (which, will eventually come) who would you want there? Don't let these people go. Even if there appears to be little to no work that your division that sells to airlines can do, everyone will start flying again, and you won't want to take six months to restaff. Keep your core team, even if it doesn't to be the people you need right now.

2. Who can you furlough? 

Layoffs don't have to be permanent. You can say to people, "Hey, look, right now we have no money, but when this pandemic passes, we want you all back. We're placing you on furlough for 30-60 days." Keep in mind, that the Fair Labor Standards Act applies here. You cannot furlough exempt employees for less than a full work week, without paying them for a full week. If they work a partial week they get paid for the full work.

3. Who are your top performers? 

A lot of people hate performance appraisals, but when you have documentation at your fingertips about performance levels, it makes layoffs easier. You have vetted, reviewed, and discussed documentation on hand that can help you make your decision. Of course, location and responsibilities are critical in layoff determinations, but when you have people doing the same or similar jobs and one received an "exceeds expectation" rating and the other received a "meets expectations" rating, the decision is easy.

4. What positions can you combine? 

If you've done cross-training, you can have people take on multipe roles (temporarily, we hope). If not, you may find laying people off costs you more money than it saves. If work still needs to happen--even at a reduced rate--you need someone who can do it.

5. Have you considered other solutions? 

Instead of layoffs or furloughs, can you do a 20 percent paycut across the board? This only works if everyone, including the CEO, gets a paycut. If you start chopping wages of your lower level employees while handing out bonuses to the management team, when this crisis passes, your employees will quit--and they'll be right to do so.

6. Don't forget unemployment. 

Layoffs, and even furloughs, make people eligible for unemployment. That is precisely its purpose. Do not, under any circumstances, try to keep your costs low by attempting to deny unemployment. Do you not pretend you terminated someone for cause when you would have happily kept the person had your business not taken a financial hit.

This can be a scary time for all of us, but use good sense when making your business decisions involving layoffs.

Published on: Mar 13, 2020
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