Crisis Management: Why Your Business Needs a Plan

 
Team gathered around a laptop for crisis management meeting.
 
 

In recent years,

businesses in our geographic region have contended with more than their share of natural and human-made disasters, including hurricanes, other extreme weather conditions, cybersecurity, Influenza and COVID19, violence in the workplace and other challenges to business operations.

These types of business interruptions almost always have enormous implications for the employees who run the business. Human Resource professionals can make significant contributions to the planning and preparedness of a business continuity plan.

“If you can know your risks, you can plan for them.” 

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Why your business needs a crisis management plan

Disasters of any type can be costly for businesses in many ways and even result in permanent closure. Every crisis presents management challenges on how to handle the impacts to its employees. How do they plan to keep employees safe and healthy? Will a layoff be required, and if so, how do you go about it? What’s the difference between a layoff and a furlough? Can employees work from home? How can you ensure compliance with the Fair Labor Standards Act (FLSA) and other employment laws like the Americans Disability Act (ADA)? 

According to the 2016 New Orleans Business Continuity Guide, a 2015 survey of almost 60 businesses from six commercial corridors throughout New Orleans indicated:

  • Only 40% have a written emergency plan;

  • 72% have a communications plan for contacting their employees and customers in the event of an emergency;

  • Only 33% have a written business continuity plan;

  • Only 39% have access to a back-up generator;

  • 75% have purchased flood insurance;

  • 57% have purchased business interruption insurance;

  • Only 15% have mutual aid agreements in place with other businesses.

The guide also points out that:

Despite the city’s recent disasters, New Orleans businesses are no better prepared on average than small businesses nationally.

The truth is that small business is key to our country’s success, and many need help with preparing for disasters. 

Two people meeting discussing layoff alternatives in an economic downturn.

Build a human resources crisis management
plan with First Line HR

Our approach to an organization crisis is to plan in phases: prepare, respond, recover.

Before a possible event, responding during the event and recovering after the event. Our experience is that a written and practiced business continuity plan is the top preparedness approach for all types of weather incidents, Influenza, COVID19, and other bacterial pandemics, fire, burglary, and workplace violence. Our customers get a customized framework that provides for all of these responses. Also, we include the training of your employees on how to recognize and respond to workplace violence. 

More often than not, layoffs are the default response to an economic downturn. However, we recommend the consideration of alternatives. In their article published in the Harvard Business Review May-June 2018, Layoffs that Don’t Break Your Company, Sandra J. Sucher and Shalene Gupta cite numerous findings from numerous research organizations on why layoffs are often ineffective:

  • A majority of companies that did a layoff saw declining profitability for three years,

  • Downsizing a workforce by 1% leads to a 31% involuntary turnover the following year,

  • Surviving employees feel like they have lost control as the fate of their peers sends a message that hard work and excellent performance do not guarantee their jobs,

  • Surviving employees experienced a 41% decline in job satisfaction, 36% in organizational commitment, and a 20% decline in job performance.

In Sucher’s research of companies that considered layoff alternatives, they used a workforce change strategy that included three main components: a philosophy, a method, and options for a variety of economic conditions. 

If downsizing is inevitable for your business to reopen and remain viable, we can provide you a strategic approach on how to do it objectively, fairly, and legally. 

First Line HR also helps with the various administrative requirements to support those who have challenges regarding their benefits, unemployment insurance, and training on how to transition to a new career.

Team meeting about the business crisis management plan.

Crisis management for your business

At First Line HR, we have experience in applying principles to support business continuity planning and emergency response with a wide range of solutions. Over the past two decades, we aided numerous reactions to crises, including reorganizations and downsizings caused by economic and natural disasters such as recovery from Katrina and the “great recession.”

We recently designed a continuity plan to prepare for all types of threats, including Influenza and COVID19. Our knowledge and first-hand experience can provide support in developing the organization’s business continuity plan.

If your organization doesn’t have one, we can build it for you. Click the button below for a free 15-minute consultation and learn more about our services design for crisis management.

 
LEADERSHIPRay Lieber