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Coronavirus outbreak – how prepared is your business to cope with it?
The outbreak and rapid spread of coronavirus to pandemic proportions highlights the need for businesses to be prepared for the consequences of sudden and high employee absenteeism.
The cause of an outbreak of respiratory illness in Wuhan City in China was identified on 31 December 2019 as a new strain of coronavirus – 2019 Novel Coronavirus (COVID-19).
With almost 20,500 confirmed cases in China at the time, the World Health Organization (WHO) declared the outbreak a public health emergency of international concern (PHEIC) on 30 January 2020. This is only the 5th time in the last 10 years that WHO has declared a PHEIC, which is defined as ‘…an extraordinary event which is determined…to constitute a public health risk to other states through the international spread of disease…’1. As of 11 March 2020, 09:00 GMT, the virus had caused 4292 deaths and spread to at least 113 other countries/territories2. Coronavirus presents with flu-like symptoms including a fever, a cough or difficulty breathing and can be passed from person to person, usually after close contact with an infected person. It has now been recognised as a global outbreak (pandemic).
The most obvious impact of a PHEIC or a pandemic is how people are affected. The 2017 edition of the National Risk Register of Civil Emergencies (NRR) suggests that, for a pandemic flu, 'up to 50% of the UK population could experience symptoms, potentially leading to between 20,000 and 750,000 fatalities, and high levels of absence from work’ 3. COVID-19 belongs to the same family of viruses as the 2003 Severe Acute Respiratory Syndrome (SARS) outbreak, which saw 8,000 cases globally and affected 26 countries.
People sit at the very core of a business, so planning for employees to be off work through illness or other reasons is an essential consideration when developing a pandemic response plan. In general, planning assumptions should be based on around 25% of the workforce taking 5 to 8 working days off over a 3-month period.
Business impact assessment
The first step when preparing for employee absenteeism is to undertake or refresh a business impact assessment (BIA).
This is a systematic process that evaluates an organisation’s critical functions, services, products and processes. By identifying business-critical functions, organisations can focus their available employees to ensure that these functions are continued.
The BIA process crucially identifies which employee groups and what skillsets are essential to the delivery of these key functions. By identifying these employee groups, it is possible to understand the impact a loss in personnel, across the business or in one specific area, may have on an organisation’s ability to deliver its critical business functions.
The BIA process also puts a timescale on any downtime (that is, how long the business can survive without this function). This is essential in enabling effective planning around employee shortages. Many businesses will already have BIA and business continuity procedures in place. However, refreshing these is crucial in ensuring contingency strategies take into account that up to 50% of staff may be absent during a pandemic.
The ripple effects
The next step is to prepare for the risk of employee absenteeism in other organisations as this can impact your own employees and your supply chain. Consider the impact other organisations may have on your employees (for example, will public transport services be restricted or might their childcare arrangements be affected at short notice?). Absenteeism will be exacerbated by employees who need to stay at home to care for ill children as schools or nurseries start to close – either to decrease the spread of the outbreak or because they have their own staffing challenges. Children between 3 and 10 years of age are a high-risk group as they are more likely to catch infectious diseases because their immune systems are still developing and they are in an enclosed classroom environment for long periods of time. Similarly, ‘worried well’ employees might be unwilling to risk using public transport to get to and from work because they will be in very close proximity to other people. In addition, public transport services could be limited due to staff shortages or unavailability of fuel.
Reviewing staff contingencies to identify employees who are critical to the delivery of key products and services, and including childcare responsibilities and transport requirements as part of this assessment, will enable businesses to better understand their vulnerabilities. Identifying workers who can work from home, alternative sources of workforce (for example, recent retirees or agencies) and cross training employees to ensure they can fill essential roles, are all steps that should be considered during the planning stages.
As organisations have sought to achieve efficiencies, many have subcontracted manufacturing and services to their supply chain. Many supply chains are now ‘lean’, with just-in-time deliveries replacing large stocks of inventory. As the world grows ever more interconnected, we are increasingly reliant on global supply chains – even for small and medium sized enterprises (SME). This results in businesses being highly vulnerable to pandemics. The interconnected and global nature of supply chains means that, even if a pandemic outbreak does not reach the UK, there is still a reasonable chance that it will impact on a business’s supply chain as staff shortages in other countries may interrupt the production or transportation of goods and services. The use of lean supply chains and just-in-time deliveries also means organisations are increasingly susceptible to even small disruptions in their supply chain and do not have contingency stock. Understanding your supply chain, and identifying alternative suppliers and products which you can use, are excellent ways of ensuring your business is prepared for a pandemic. Thus, a robust supply chain assessment forms an essential part of pandemic response planning.
These steps help organisations prepare for a pandemic. However, they must also consider how to respond when the risks described above are realised and begin to impact on business operations. As well as a bespoke pandemic response plan, all organisations should have a crisis management plan. This will outline command, control, coordination and communication arrangements, and provide clear structures and processes on how to deliver an efficient and effective response to any incident that occurs. During a pandemic, these response structures are essential for coordinating activities and enabling the continuity of critical services. A pandemic response plan should ensure that specific considerations are in place, which include practices to reduce the risk of spreading a virus within an organisation, welfare arrangements for affected employees, and reporting arrangements to track employee absence and its impact.
This article provides some initial considerations to help prepare for a pandemic, but there is a lot more to consider. The ripple effects of a pandemic need to be carefully considered as they can potentially impact all aspects of a business. The coronavirus outbreak has the potential to be declared a pandemic and it is important to act now to ensure your business is prepared. The following provides a summary of actions to help you prepare:
- Update your business impact analysis
Now is the time to ensure your business has an up-to-date BIA with a clear understanding of your key products and services, and the activities that underpin them.
- Ensure business continuity plans are in place and up to date
Building on the BIA, ensure that your organisation has a well-developed business continuity plan, which includes strategies to cope with up to 50% of the workforce not being able to work during a pandemic.
- Update your supply chain assessment
Undertake or update your supply chain assessment so that the business has a clear understanding of the supply chain and, where required, put contingency measures in place for key suppliers.
- Put crisis and pandemic response plans into action
Develop or update crisis management plans to ensure your organisation has command, control and coordination arrangements in place, and there are clear lines of escalation for issues potentially affecting the business’s core activities. Ensure a specific pandemic response plan is developed and put in action. This helps to ensure appropriate practices are adopted to mitigate the impacts of a pandemic.
How Ricardo can help you
Ricardo’s crisis experts are available to conduct crisis management and business continuity health checks. These will help you to measure your crisis readiness and, more importantly, identify and address gaps within it. For those who have no plans or procedures in place, our team of crisis specialists is available to work with you to develop bespoke business continuity and crisis solutions. Now is the time to review and enhance your preparedness.
If you have any concerns about how to go about preparing or updating a BIA, crisis management plan, business continuity plan or a pandemic response plan, please don’t hesitate to contact us on [email protected]. Alternatively, you can visit https://ee.ricardo.com/crisis-management.