How Bookkeepers Can Help Clients With the Right Time to Rehire Furloughed Staff

As many states across the U.S. begin the process of reopening and many small businesses make plans to resume operations, questions still remain about bringing back furloughed staff.

Jun 19th 2020
CEO Xendoo
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Bookkeepers and accounting professionals can help their business clients make this determination by asking them these five key questions:

1. Is your state entering Phase 2 or 3 of reopening?

If the client is unable to answer this question or is unsure, recommend they check state and local government websites to determine the reopening phase for their location. A good place to source state information is the National Governors Association’s website, which features a regularly updated summary of state actions on business re-openings.

Individual counties and cities may have additional restrictions and guidelines from the overall state and clients should also go directly to official city and county government websites as phases may vary by locality in a state. Phase 2 and 3 reopening guidelines place restrictions and controlled conditions on some businesses that will impact whether or not they are in a position to rehire furloughed employees.

For example, it does not make sense for businesses dealing with capacity limitations in Phase 2 or 3 to bring back all of their pre-pandemic employees. Depending on these conditions, bookkeepers can advise their clients to slowly re-add furloughed employees to the payroll as capacity limitations are lifted and business picks up again.

2. Are your phones, emails and live chats increasing?

An increase in inquiries and interest in products or services are indicators that life is returning to the client’s business. For example, if the client is a restaurant owner with phones that are ringing and dine-in foot traffic that is increasing, the timing is right to begin bringing back furloughed employees.

Try to have clients track this information day-to-day to see what days and times peak with demand. If these trends are consistent week after week, it will be easier to know when it’s time add employees back to the payroll after being furloughed. From there, decisions can also be made if they will be hired back full-time or part-time for the time being.

3. Are people out and about on the streets?

If the answer is yes, it might be time for the client to consider re-adding employees to their payroll. With the easing of pandemic-related restrictions, more and more people will be out and about. This should generate an uptick in foot-traffic and sales and better position the client to bring back furloughed employees.

If cities where clients are based have mass transit, it is also a good idea to monitor its schedule. If there are very few trains running, for example, it is likely that the city isn’t seeing demand themselves. Once the number of trains increases, that is a good sign that the number of people commuting to and from work or going out to eat or shop is increasing as well.

4. Are your competitors back to full production?

Advise the client to monitor competitor social media pages to check for updates on staffing and production levels. In addition, checking a competitor’s website can also prove to be useful as many companies developed a landing page for COVID-19 updates.

Setting up Google Alerts to monitor competitor updates is beneficial overall, but can also be extremely telling as to if clients should be considering rehiring during the current environment. Clients with local competitors also have an advantage.

For example, by quickly checking to see how full competitor parking lots are, it’ll be easy to see if business is picking up or if it remains slow. If these competitors are back up-and-running, it’s a good sign that the client is ready or will be ready soon.

5. Can you respond to customer needs promptly?

If the client is having trouble taking care of customer needs in a timely manner, it may be time to bring back furloughed employees. Not being able to respond to requests promptly enough or having a back-fill of orders to fulfill, clients should be noticing an uptick in business that can’t be met with a decreased number of employees.

Take a restaurant owner, for example. If people aren’t being seated or served quickly enough, it is likely time to add in a few furloughed employees at a time. In a retail store, if the socially-distanced check-out line is out the door, that is a clear sign that business is ready to begin staffing up again.

Conclusion

Businesses are slowly starting to rehire furloughed employees as states continue to ease social distancing restrictions. In fact, data from human resource provider Gusto cited by CNBC found that employee headcount increased by 3.2 percent in May.

As this trend continues and more businesses reopen across the nation, they will be looking for guidance on when to re-add employees to the payroll. Bookkeepers can help clients determine the timing for rehiring employees based on the answers to the five questions above.

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