Contingency plans need to be reviewed and updated. Issues such as supply chain security and workplace attendance policies should be addressed. Travel policies also demand attention.
Most important, businesses should ascertain just how much they would be affected if a significant portion of the working population is sickened by swine flu—which is also known as H1N1 flu.
“Anywhere up to 30 percent of their employee base may be out at some point in the pandemic,” said Jeanne A. Matthews, assistant professor of nursing at Georgetown University School of Nursing & Health Studies in Washington and immediate past chair of the Public Health Nursing Section of the American Public Health Association.
“For business, this is not just a public health problem; it’s a problem of the economy as a whole,” she said. “There are supply chain issues if you think about potentially 30 percent of the employees in all businesses being affected. We need businesses to think about what happens if their vendor is affected. Do they have a Plan B in terms of meeting their own needs, and looking forward how do they meet the needs of their customers?”
Review existing plans
For many risk managers, the first action will be to review existing pandemic plans, experts say.
Risk managers “are really assessing the plans they put in place a few years ago around the avian flu because the issues and the approaches are not dissimilar,” said Prakash Shimpi, managing principal and head of Towers Perrin’s corporate enterprise risk management practice in New York. “The challenge perhaps is for companies who had not had the opportunity to put some plans in process.”
Risk managers should be “checking into the contingency plans that have been put into place already,” said Mike Giacobbe, director of enterprise risk management for Aon Global Risk Consulting in Chicago.
Aon recommends that employers determine availability of backup suppliers to ensure supply chains are uninterrupted; review succession planning; create a process for sending critical messages to employees; develop a protocol for working from home; inform employees of any travel restrictions; and construct a plan of action should an employee be suspected of having an H1N1 flu infection.
Many educational institutions have planned for a pandemic, “and if they haven’t then they’ve been negligent in not doing so,” said Leta Finch, executive director-higher education practice group for Arthur J. Gallagher Risk Management Services in Burlington, Vermont. “The world has known about this risk of a pandemic outbreak for years now.”
Giacobbe stressed the need for a “unified response” to avoid miscommunication and conflicting messages. Risk managers also need to keep up with the latest information from the World Health Organization and Centers for Disease Control and Prevention, he said.
A pandemic will not affect all industries equally, said Carl Groth, director at Deloitte & Touche in Wilton, Connecticut. High-impact industries could include travel such as airlines. The hospitality industry, particularly resort areas, also could be affected, he said. Health insurers would be affected and, for life insurers, “pandemic is always at the top of their mind.”
A company should “look at its own business model, its own demographics and consult with someone who knows something about public health,” said Don Dowling, international employment counsel at White & Case in New York.
Considerations include taking workplace safety precautions like washing hands,” Dowling said.
“Then you’d have a provision on the cluster of issues involving people not showing up to work,” he said.
These issues would include whether the employer can force people to work from home and whether employees can be forced to take paid leave or unpaid leave. The company also would need a disaster communications protocol, he said.
“There are steps that we can take even at this early stage of the outbreak to prevent exposure and to prevent even getting the flu if you are exposed,” said Jeff Tanenbaum, a partner and labor and employment practice leader in Nixon Peabody’s San Francisco office.
For example, employers should mandate universal precautions, said Tanenbaum in an article he posted at the Nixon Peabody Web site. These include frequent hand washing, and because access to soap and water is not always convenient, ready access to a hypoallergenic hand sanitizer should be provided.
The precautions also should minimize exposure to people who are ill.
Employees who appear ill when they are at work should be sent home. And, when employees are ill, they should be encouraged, or perhaps required, to stay home.
Supply chain management also critical
Businesses “need to get a full view of their supply chain for the products that are most important to their business,” said Gary Lynch, managing director in Marsh’s New York office.
They need to identify every aspect of the supply chain, from suppliers to public infrastructure that could be negatively affected by pandemic flu. And remember the human element, he said.
“Without people, we don’t have a supply chain.”
“Any sort of overreaction is extremely dangerous where arbitrary decisions are being made to shut down facilities,” Lynch said.
That’s true on many levels, said Nixon Peabody’s Tanenbaum.
It’s important “not to panic yourself as an employer and to do what you can to prevent employees from panicking. The best thing you can do is to educate yourself and to educate your workforce,” he said.
“The reassuring part is you can do something and we’re still talking the very early stages of an outbreak,” he said. “We don’t know it’s going to become worse—it may. I think most medical professionals are assuming it will become worse, but how much worse we don’t know yet.”