Most corporate executives and HR professionals might think that the impending swine flu pandemic is strictly a public health issue, but if you are thinking that way, you would be wrong.
It turns out that the impending swine flu pandemic is also a major corporate issue that needs to be addressed with decisive plans and clear communications. Fear surrounding the illness is already affecting employee productivity and attendance, as parents in regions impacted are being forced to find child care or stay home as schools close for weeks at a time.
The potential damage that this particular flu can cause corporations is further intensified by the fact that many corporate staffs are already incredibly lean, making it difficult to tolerate extended spikes in absenteeism. If your corporation hasn’t set aside some time to assess how this threat can negatively impact your business and your employees, the time to act is now.
Potential Impacts That Firms Might Encounter
As more becomes known about the flu and its actual impacts, it will be easier for firms to identify and solve the problems that they could encounter. However, based on my research and from years of providing advice to corporations regarding past catastrophic events, I have made a list of the nine most likely potential impact areas that senior managers and HR need to prepare for. They include:
- Absenteeism. The most obvious impact on most corporations will be an increase in employee absenteeism. Because health professionals who are highly visible in the media are encouraging individuals (who think they might be infected) from interacting with others, it is highly likely that many of your employees will choose to stay home in order to protect others. Having schools close (over 300 have already) might also mean that more parents will be forced to stay home while their kids are out of school. If family members get sick, your employees are likely to be absent while they care for their family. Some health professionals have also publicly encouraged individuals in cities affected to stay home and travel out as little as possible to minimize their risk of exposure, a message that may resonate strongly with those who already suffer from phobias related to germ exposure.
- Morale and focus. What happens in your employees’ personal lives will also impact their ability to concentrate on their work. If an individual employee, friend, or family member becomes infected, it is likely their morale will be negatively impacted. It will certainly be difficult for managers to keep their employees focused on the customer when their personal lives are in turmoil.
- Productivity. Sick workers are obviously less productive. Add to that burden the fact that more workers will be absent, while others will be less engaged, and it is fairly safe to assume that it will be extremely difficult for managers to maintain current workforce productivity levels. This will force managers and HR to pull away from normal activities to focus on these new issues. Conversely, firms that are located outside of the major impact areas will, as a result, have a competitive advantage.
- Customer impacts. Firms in the travel, retail, or any industry where large amounts of people congregate and interact will be negatively impacted as customers change their habits in order to avoid encountering the flu.
- Employer brand and recruiting. Firms that fail to act quickly to accommodate their employees’ needs will weaken their employer brand image both inside and outside the firm. This could positively affect future recruiting as potential candidates see how poorly the firm manages in a crisis.
- Costs. Employee costs will likely increase in several areas, including costs related to overtime and temporary labor. Employee benefit costs are also likely to increase in the future as a result of increased health plan usage by your employees.
- Travel. Fewer employees will be willing to travel on airplanes, trains, and even mass transit for fear of catching the virus. This will affect sales and weaken relationships.
- Stock price. The stock price of individual firms might also be impacted if analysts and the public perceive that the firm may be benefited or harmed by the epidemic.
- Smaller issues. The potential problems will be both large and small. For example, even minor things like what you serve in the cafeteria (there may be an irrational fear of pork products) may become issues. Simple practices like shaking hands with customers and job applicants may become huge issues overnight that management must develop a plan to deal with.
The initial strategic challenge is for senior management and HR to develop a process that can identify these real or imagined issues early on, so that a plan to deal with each of them can be developed.
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Not All Firms Will Suffer the Same Exposure
The risk to your organization will vary depending on several factors. First of all, if your facilities are close to geographic areas where the outbreak is stronger or if you are a multinational firm that does business in Mexico, the risk will be greater (Google, for example, already closed its Mexico office). If your employees are required to routinely travel, your risk will be greater. Firms that are in healthcare and pharmaceuticals will have more direct positive business impacts and retail firms where there is a lot of public contact will face many potential problems. Small businesses are likely to be impacted the most, because it’s harder for them to easily replace workers who are impacted by the flu.
20 Action Steps to Consider
The key phrase to remember is that “it’s better to be prepared than surprised.” The emergency action plans that were developed in the past for such threats as Y2K, 9/11, the bird flu, SARS, and localized natural disasters should be used as a foundation to help your organization prepare for this current problem. Some of the possible action steps that you should consider include:
Part I – Strategic Actions
- Senior management briefing. The CFO’s office, HR, and the Risk departments need to collaborate in order to build the business case for proactively addressing swine-flu-related issues. Senior executives need to be briefed on what needs to be done and the consequences for not acting quickly, in order to gain their support for the overall effort.
- Transparency and lack of surprises. The old adage that “the only thing we have to fear is fear itself” is certainly true in this case. Fear makes normal people act irrationally. If you want to minimize fear among your employees, the most important step is to decide up front to be open, honest, proactive, and transparent in everything you do and say. Be forthcoming with information about risks and problems and answer questions before they even occur to most employees. Senior managers have to be continually communicating about the plan and its preventative measures. Management also must be frank in reporting incidents within the firm where flu outbreaks have actually occurred.
- Identify “at risk” jobs. Not every job within the corporation will have the same risk factor for coming in contact with the virus. For example, obviously receptionists will have greater risks than those answering the phone in remote call centers. As a result, HR needs a process that aids in identifying the specific jobs where employees are likely to be the most uncomfortable and where employee absenteeism is most likely to increase. Also, because parents with small children are the most likely to be absent and older workers are the most at risk of serious complications, HR and managers might need to pay special attention to these groups of workers.
Part II – Employee Concerns and Available Options
- Identify employee concerns. HR needs to be proactive and to develop processes and surveys that allow the firm to quickly identify both overall and individual employee concerns and questions. There should also be anonymous options for employees who are afraid to speak up. Ask your employees periodically what information they need and what specifically they would like management to do. A single point of contact should be designated for employees and managers and held accountable for managing the overall response to the pandemic.
- Hygiene actions. Based on the flu avoidance advice that is being given out by public health officials, there will be an increased demand for hygiene-related products such as antibacterial creams, latex gloves, masks (the most common variety aren’t effective), and hand-washing facilities. Smart firms will proactively provide employees with many of these options, if for no other reason than to reduce their fear and concern level. Cleaning crews will have to be instructed to pay special attention to often-touched items like copy machines, coffee pots, shared phones, and doorknobs. Employees will also have to be educated about preventive measures.
- Support for employees’ families. It’s important that HR take steps to understand not just their employee’s concern but also employees’ potential concerns related to their families. Smart firms will find a way to provide information to employee families. Firms also need to be flexible enough to allow employees to do “whatever they perceive they need to do” in order to protect and support their family members. It is highly likely that efforts in this area will later pay off in increased retention and employee referral rates.
- Remote and flexible work options. Expand the current options that employees have to work at home during this pandemic. This is important because the actual cost of having sick employees come to work (and making others ill) is much greater than the cost of the inconvenience of letting employees who might be contagious work from home. Large-scale school closings will cause employees who are working parents of school-age children to want expanded remote and flexible work hours options. Individual managers have to be educated on the most effective ways to keep these remote workers productive.
- Information and help sources. Employees and their families should be provided with a long list of information and “help” sources from within the organization, on the web, and from local community organizations. Educating your workers and their families can go a long way in reducing unnecessary fear and concern.
- Involve unions. If you operate in a union environment, include union leaders (and alternatively, representatives of employee groups) early on in the planning. This involvement and cooperation can help to minimize rumors and it can expand your options for communicating with your workers.
- Privacy concerns. While it’s important to be open and honest, protect the privacy of your employees. Privacy policies and procedures need to be revisited to ensure that they are effective enough to keep sensitive issues related to healthcare and illnesses confidential.
Part III – Company Policies and Operational Processes
- Employee benefit and pay options. Everyone in the employee benefits and health departments need to be on full alert during this crisis. Smart firms will want to review their healthcare, counseling, and employee assistance plan coverage to ensure that the desired level of health coverage is being provided in every area related to the swine flu. Deductible and co-payment levels may need to be reduced for the short-term, in order to ensure that your employees seek out help rather than coming to work sick. Large firms might also consider having a nurse or health counselors on-site during the short term to minimize your employees’ time away from work. Another alternative to consider is offering “hazardous duty pay,” where you give short-term bonuses for those working in “high-risk of illness” jobs.
- Absenteeism policy. Traditional absenteeism policies might not work adequately in this crisis situation. As a result, these policies need to be reviewed. Your employees will also have to be educated about which situations are best covered by standard absenteeism, personal days, long-term disability, or vacation policies. Management also needs to make it clear in which circumstances that it is best for the firm and for the individual employees to stay home. There should also be a “help line” and an internal web page to answer questions and concerns relating to health coverage, absenteeism, etc.
- Travel policy. The organization’s travel policy needs to be reviewed so that employees who are concerned about their health know and understand their various options relating to “required” corporate travel. Large corporate events in the immediate future might also need to be reconsidered.
- Long-term disability and death procedures. If the strain facing your workers is the most severe one, you will need to review and update your policies and processes related to long-term disability. And unfortunately, even employee death processes will need to be reviewed. Senior managers need to be aware that even a single employee death — that in the eyes of your employees is handled improperly — could be a morale crusher.
- Contingent workforce processes. Managers need to plan for the possibility of losing a large number of employees as a result of this illness. That means that contingency worker plans need to be developed for supplementing the current workforce with part-time workers, temps, contract workers, or outsource vendors. Managers might need expanded authority to offer overtime to current employees to fill in as a result of employee absenteeism and illness.
Part IV – Miscellaneous Actions
- Reassure customers. Study the potential impacts that this health scare might have on your customers. First off, you might need to change physical layouts to minimize their perception of crowded conditions. You may even have to change sales and customer service processes so that the potential health concerns of both your employees and your customers are addressed.
- Localization. If you have a large number of employees in high-profile and hard-hit geographic areas including Mexico, you will have to develop customized plans to better fit the more serious situation. Cultural and regional differences will also have to be factored into localized plans.
- Business interruption insurance. The possibility of business interruption could be an issue at many firms but it is especially important at smaller firms. Managers will need to calculate the risks and identify what coverage they currently have and what coverage levels that they might need in the future. For example, if your firm operates a Mexican travel business, it would be plain silly not to anticipate a partial or complete shutdown of your business for several months. Take this opportunity to review and update each of your emergency preparedness action plans.
- Generalist role. HR generalists should be trained in how to handle swine-flu-related situations. They need to be the primary support person for individual managers that need advice and help.
- Metrics. Metrics and reporting mechanisms need to be beefed up to ensure that senior management is constantly aware of which areas within the firm have the most absenteeism or flu-related issues.
Let’s face it: the current economic downturn already has many employees concerned about job security, so letting additional stress factors run rampant could be disastrous. Management can choose to ignore the issue and hope that it goes away, but truly smart managers will see this crisis as an opportunity to demonstrate to your workers that you actually “live” your corporate values. It’s an opportunity to demonstrate your concern for your employees’ needs and to help them directly in this uncertain time.
Even if the swine flu doesn’t become a major pandemic, acting quickly and visibly is still an opportunity to demonstrate that your firm is responsible and caring. Incidentally, by providing this help and support, you will also likely improve both your employees’ current productivity and their long-term loyalty. Not a bad ROI for both sides!