This article will focus on concrete and cost-effective preparedness and business-continuity measures to mitigate the impact of pandemic illness whenever it strikes, whether it’s coronavirus (COVID-19) or another strain of virus.
Readers of Workspan will be particularly interested in the total rewards, benefits and compensation issues inherent in pandemic preparedness and responses, such as:
- Paid-time-off or sick-pay programs may need liberalization to encourage self-quarantine of employees who believe they have been exposed to disease.
- The costs of providing health, disability and life-insurance coverage could increase dramatically as the result of a pandemic.
- Keeping critical operations functioning may warrant use of “hazardous-duty” pay or increased flexibility in the use of bonuses or other special incentives.
Preparedness goes far beyond total compensation. The following approach demands ongoing involvement of the preparedness team and other key players throughout the organization. Through this process, the organization’s existing emergency-preparedness and response plans should become better understood and tested.
Step 1: Develop Commitment
Developing a clear, fact-based understanding of pandemic influenza and its potential consequences is the first step toward devising and implementing a solid business preparedness and response plan.
Total rewards, HR and risk-management professionals need to educate themselves on the most critical issues at hand and should take that knowledge to executive management to establish a corporate-wide commitment and necessary resource allocation.
To convince executive management of the need to act, the presenter must be able to:
- Describe the issues and risks of the situation.
- Be ready to highlight corporate vulnerabilities and the potential impact of a pandemic on the company.
- Suggest specific means of addressing the risks.
- Invite representatives from other departments to be part of a pandemic-preparedness and response team, and provide reasons why they should participate on this taskforce.
Step 2: Form the Preparedness Planning and Response Team
Once the executive-management team has agreed to the need for a preparedness and response plan, it’s time to assemble the team and designate the chairperson. He or she should have broad corporate decision-making authority and credibility, as well as the resources needed to implement the plan.
Every part of the organization should be represented on the preparedness team, although some team members will be less involved than others. The team should include representatives from total rewards, human resources, risk management, safety and security, facilities, information technology, operations, sales, finance, legal and corporate communications. If the company employs a medical director or other health-care professional, he or she also should be included.
Step 3: Educate the Team and Establish a Broad Strategy
At the first team meeting, the chairperson should give a comprehensive presentation about pandemic illness, focusing on the current strain of flu or virus. Although the plan will certainly evolve over time, the leader should be prepared to present an initial action plan, with analytical assignments for each member of the team. Set aside time for questions and answers, as well as for discussion of the impact of a pandemic on the industry and company.
Each team member should leave the first meeting with the assignment of evaluating the potential impact of a pandemic on his or her own department. In a follow-up meeting, discuss the findings and initial recommendations.
Step 4: Assess the Risks and Develop a Plan
Group members’ thoughts on risk assessment and preparedness/response strategy should be incorporated into a planning matrix that lists various analytic tasks and preparedness steps and assigns responsibility for their completion. Following are some of the issues that team members should address.
- Assess impact on demand for company’s goods and services. The assignment of one or more team members for this aspect of analysis will depend on the size of the company and nature of the business. A representative of sales and marketing should be included.
- Project financial impact. The corporate finance department should be represented on the team so that it is fully informed about possible consequences of a pandemic for business operations. Based on that information, the finance department will be better able to develop financial projections based on different scenarios. This will allow the company to communicate more quickly and effectively with financial markets in the event of a crisis.
- Identify key employees and positions for which backup is needed. Each team member should be charged with identifying key individuals or positions that are critical to business continuity in his or her area of operations. Cross-training opportunities and backup personnel should be identified. In some organizations, critical staffing requirements may dictate use of hazard pay as an incentive to keep employees on the job.
- Analyze travel impact. The team’s representatives from human resources, sales, operations and corporate travel need to consider the impact that international border closures and curtailment of airline operations would have on the business. They also should begin working to identify other ways in which to continue operations if travel becomes dangerous or impossible.
Even before a pandemic begins, the company may want to prepare and distribute travel health kits for those going to locations where the risk of illness is perceived to be high. Such kits should contain masks, hand sanitizers, surgical gloves and other personal protective equipment. In addition, some companies will want to include a course of Tamiflu or another antiviral drug that can be used prophylactically (in the event of suspected exposure) or for immediate commencement of treatment if symptoms begin and influenza is suspected.
Traveling employees should also be given any travel advisory information published by the World Health Organization (WHO) or the U.S. Centers for Disease Control (CDC).
- Evaluate impact on expatriates. Team members also should evaluate whether and at what point expatriate employees and their families should return to their home countries. In some cases, it may be desirable to evacuate family members before the employees. Any expatriates who are deemed to be critical to the company’s operations in a given area should be identified, and those willing to stay during a pandemic should be appropriately compensated. In certain areas (especially where health care is poor or other resources difficult to get), it might be wise to prepare one or more safe houses, stocked with food, water and other necessities adequate to last several months.
- Evaluate effects of high employee-absence rates. If a pandemic develops, it could spread around the world within a few weeks, and up to 35 percent of the workforce could be ill at its height. An additional 10 percent or so of workers could be absent because of general panic or the need to care for family members, including children at home because of school closures.
Team members from each area of the company must evaluate the consequences of high absentee rates and determine what measures can be taken to continue operations in spite of that. Possible responses include increased telecom- muting and introduction of flexible work hours (to maximize social distancing). If some business locations are harder hit than others, some operations may need to be temporarily transferred from one location to another. Systems redundancies and employee cross-training will be important.
- Prepare facilities. The spread of disease in the workplace can be reduced through education of employees about disease transmission and personal The preparedness team should look to facilities management to evaluate the purchase and deployment of materials such as hand sanitizers, disinfecting sprays, surgical gloves and masks. The HR department should create an education program that, in part, informs employees about proper hand washing, cough and sneeze etiquette and similar hygiene matters. Human resources should develop plans for the isolation and quick removal from the workplace of any employees who become ill at work with flu-like symptoms.
- Review legal. Following are some of the issues that legal counsel should address:
- Legal counsel should review its standard contracts to determine whether force majeure (i.e., “Act of God”) provisions are broad enough to address the inability of either the company or its suppliers to perform due to widespread illness. It may be desirable to revise those provisions in new and/or existing contracts.
- Legal counsel should consider the requirements of applicable labor law in all jurisdictions where the company does For example, health and safety rules may mandate special training, equipment and procedures during an outbreak of illness. Federal and state rules about family and medical leaves of absence, the treatment of disabled employees and similar issues also must be addressed.
- The privacy and security requirements of the Health Insurance Portability and Accountability Act (HIPAA) govern the release of individuals’ protected health information (PHI) under many circumstances, although PHI may be released if required by public health Legal counsel should work with total rewards, HR and benefits personnel to ensure compliance with these federal rules, as well as similar state rules, which may be more stringent.
- Review business continuation. The team’s risk-management representative will want to review any business-continuity insurance contracts to evaluate which, if any, consequences of a pandemic might result in covered claims.
- Examine preparedness of outsourcing and other service. If the company outsources fabrication, human resources, information technology or other services to third parties, the preparedness team should investigate the ability of the outsourcing providers to deliver on their promises in the event of a pandemic. Outsourcing contracts should be carefully reviewed to determine whether penalties for non- performance are adequate to the risk.
- Assess supply lines and just-in-time inventory. If a pandemic occurs, transportation services could be curtailed significantly for a time, and the company’s suppliers may be unable to fulfill their contractual responsibilities. The team should work to identify supply-line vulnerabilities and determine whether any modification of a just-in-time approach to necessary product components or other essential goods is needed. Alternative suppliers also should be identified where possible; however, they too, may be unable to step in if a pandemic occurs.
- Prepare ongoing information. One team member (plus a designated backup) should be assigned to keep the group up-to-date on international, national and local developments if (and as) a pandemic develops. This individual should check sources such as the WHO and the CDC websites every day for information on the spread of coronavirus or other potential sources of a pandemic.
- Prepare communications plan. A communication plan that is honest, timely and accurate is essential to preparedness, as is the designation of an official spokesperson for the company. The various audiences to which the information should target include the company’s employees, its managers and supervisors, and its customers.
- Educate employees on how to protect themselves and their families. Be clear on what they should do if they become ill, the importance of keeping emergency contact information up-to-date, and the employer’s chain of command and preparedness plans.
- Provide clear guidance to managers and supervisors regarding the company’s business-continuity plans. Be clear on what they should do if they or their employees become ill and similar administrative issues.
- Inform customers about the company’s preparedness and response efforts. Keep them informed as the pandemic develops. For example, if operations are curtailed or if the delivery of goods or services is delayed because of illness, honest and timely information will help maximize cooperation among the parties.
- Evaluate employee benefits plans, leave programs and health-care resources. Another team role of the total rewards and HR departments is evaluating the company’s health, life insurance and disability plans, as well as its workers’ compensation program, to determine the potential impact of a pandemic on plan costs. In addition, review sick leave and disability programs to determine whether temporary changes are necessary so that employees will not suffer financial devastation in the event of illness.
- Review health care and public health resources available near each worksite to enable HR to direct anyone who becomes ill at work to caregivers. Some employers may want to develop telephone lines staffed with nurses to answer questions from employees who are ill. An employer’s existing employee-assistance plan provider may be a good source of information and counseling regarding mental-health issues such as panic, depression and grief during and after a pandemic crisis.
As previously discussed, it also may be desirable to provide financial markets with accurate information about the company’s preparedness and response if a pandemic occurs. In addition, if the company has a high profile within the community, its public relations reps may want to inform local media of the preparedness plan’s existence and basic outline.
Step 5: Test Plan (Scenario Testing)
Once the risk analysis is complete and a preparedness plan is in place, test the plan using carefully devised scenarios with differing assumptions regarding severity, rapidity of spread and other key factors. The scenario-testing process will increase awareness of the emergency-planning process throughout the organization, resulting in greater knowledge and credibility of the plan and its goals. Scenario-testing exercises intend to identify vulnerabilities and help the team refine the plan.
Step 6: Monitor Illness and Implement the Plan if a Pandemic Begins
If a pandemic does develop, the employer should immediately begin to monitor illness rates in its facilities. Although the illness likely will spread quickly, there may be opportunities throughout a pandemic to move work around among facilities to take advantage of locations suffering a less severe impact. At this point, deployment of the previously discussed hygiene products will be important, as well as reminders to employees about how to protect and care for themselves and their families. The company also should implement social-distancing measures such as telecommuting and discouragement of face-to-face meetings.
Step 7: Be Prepared for Recurring Waves of Illness
Pandemics often occur in waves, and in past pandemics (particularly the Spanish Flu of 1918), the second wave of illness was much more lethal than the first. The first wave can last between three weeks and three months, and the second can occur three to 12 months later. Therefore, it is important that your team refresh the preparedness plan periodically to reflect changing circumstances. The team also should continue its monitoring efforts for some time after the illness seems to have abated.
It is impossible to know whether an influenza pandemic is imminent. However, even if the risk of a pandemic occurring in any given year is small, the potential consequences are so serious that business leaders are well-advised to prepare their organizations. The steps suggested above need not be expensive if they are well devised and organized, and if team members are fully committed and involved. Many planning tools and consulting services are available to help with the preparedness project.
Go to the WorldatWork Pandemic Planning and Response page for additional information.
Note: This updated article originally appeared as “Preparing for a Pandemic: The Total Rewards Angle” by Connie Harden, JD (Workspan, July 2006).