Challenges for Businesses
Much has been written about the potential economic impact of an avian influenza pandemic. Estimates of possible losses to the U.S. economy range from 4.25 percent1
to over 5.5 percent of GDP.2
Calculations by World Bank economists
have estimated the possible impact on the global economy at $2 trillion, or up to 5 percent of global GDP.
While the numbers vary, the message is clear: “The just-in-time global delivery system has cut the costs of world trade,” says Michael Osterholm, director of the Center for Infectious Disease Research and Policy (CIDRAP), “…but there's a price to pay for this—and we'll pay for it in the event of a global pandemic.”3
Osterholm, one of the major drivers of recent efforts to help U.S. businesses prepare for the next influenza pandemic, argues that because many companies rely on the immediate delivery of raw materials, often from faraway places, the economic consequences of a severe pandemic are likely to be immediate, profound and worldwide. Officials at the World Bank, the United Nations and other institutions have echoed his warnings in recent years.4
On this page, we will take a closer look at the challenges businesses face as they try to prepare for an influenza pandemic, from potential workforce shortages to possible border closings.
Preparing for both a mild and a severe pandemic
How can businesses prepare to stay operational if 30 to 50 percent of their workforce is out sick? How can a community support local businesses that provide basic life essentials? How can businesses that depend on international trade prepare for an event that could result in the closing of borders and the resulting impact of that on the just-in-time economy?
Several online resources exist to help individual businesses plan for the impact of a pandemic on operations, offset business losses and protect the business, its employees, and the community when the flu hits. Listed here are two starting points, which are also good places for journalists to begin researching stories about how local and national businesses are preparing:
The U.S. Centers for Disease Control and Prevention (CDC) recommends that organizations plan for two distinct contingencies:
||The severity of the 2009 H1N1 pandemic remains similar to spring 2009.
||The severity worsens, absenteeism rises, critical supply chains break down and business continuity is threatened.
Companies that provide critical infrastructure services, such as power and telecommunications, have a special responsibility to plan for continued operation in a crisis. The plans also need to be tested to learn if they will work; and they need to be communicated to employees.
A 10-point framework for business planning
The Center for Infectious Disease Research and Policy (CIDRAP) offers a 10-point framework for business planning activities
. Workforce shortages are a major recurring theme among the challenges:
||Emergency management plan and structure.
Align your policies with existing crises management and emergency plans and include a chain of command structure to sustain business operations and communication with employees.
||Employee health and safety.
Include plans for likely shortages of employees, vaccines, personal protective equipment, health care services, and public transportation.
||Internal and external communications.
Realize that you will require accurate and current information sources; you may need to reach a disrupted and decentralized workforce; and you may need new communication mechanisms. You should also be proactive.
Decide how to protect critical assets in short supply and how you will deal with possible public panic and disorder, fewer security guards, and strained law and order.
||Information systems, technology, and databases.
Consider how power shortages or lack of personnel may disable normal systems and secure remote-access systems needed for continuing business operations. Determine how to deal with the limited IT structure in some countries and/or government-rationed phone lines.
||Supply chains and critical inputs and outputs.
Take into account which critical items might not be on hand if the just-in-time supply chains break down: How will your business cope if the shipping of goods is disrupted, borders and ports are closed, outsourced operations are disrupted and there is a shortage of dock workers and truckers?
||Public and media relations.
Plan ways to provide timely, accurate and reliable information to the public. Manage expectations, understand and explain the role of your business in the community and provide consistent messages.
Consider how to implement and comply with new mandates, laws or regulations and new practices, such as tracking and monitoring employee health. Understand and plan for the legal ramifications of changing work environments, including work-at-home or alternative sites.
Plan ahead for the possibility that emergency powers may be introduced and understand their potential impact. Determine how to handle regulatory reporting changes and government interventions, such as quarantine, isolation, travel restrictions, and possible border closings.
||Business continuity and survival strategies.
Prepare for months-long operational changes, sick or dead leadership, and operations that need to be consolidated, diversified, or closed.
Another way of framing the potential business response can be found on ContinuityCentral
, a site run by a Web portal design and management company in the United Kingdom.
Story ideas: During a pandemic, how will people get paid? Where will they get food and gas if truckers are too sick to deliver to grocery stores or gas stations? Where do the goods needed for daily life (from businesses) or of a business (from other businesses) come from?
Small businesses are especially susceptible to the negative economic effects of a flu pandemic. An estimated 25 percent of businesses do not reopen following a major disaster, according to the Institute for Business and Home Safety
, whose member are insurers and reinsurers with U.S. assets at risk.
One recent study
found small and medium business owners and managers believed they were unable to effectively prevent or control the spread of influenza within their workplace.5
Planning criteria and tips are available in “Planning for 2009 H1N1 Influenza: A Preparedness Guide for Small Business,”
by the Department of Homeland Security, the CDC, and the Small Business Administration.
Employees and sick leave
In fall 2009, most business leaders seemed worried about employee absenteeism, according to several polls and surveys collected on CIDRAP Business Source
The CDC recommends businesses develop policies that encourage ill workers to stay at home without fear of any reprisals and develop other flexible policies to allow workers to telework (if feasible) and create other leave policies that allow workers to stay home to care for sick family members or care for children if schools close.
A proven way to slow or curb the spread of the pandemic—stay home if you are sick and keep your children home if they are sick
—conflicts with the economic realities of more than 59 million people who do not have paid sick leave and another 100 million who cannot take sick leave to care for a child, spouse, or parent. According to a report by The Trust for America’s Health
, “this could mean that restaurants, child care centers, nursing homes, hotels, public transit systems, schools, and offices across the country could be operated and run by individuals infected with the flu who should be at home, not at work.”
“It sounds like a paradox, but keeping some workers from coming to work may be your best tactic for holding down overall absenteeism,” said CIDRAP director Michael Osterholm in a wrap-up of the September 2009 CIDRAP conference, “Keeping the World Working During the H1N1 Pandemic: Protecting Employee Health, Critical Operations, and Customer Relations.”
Your media organization
By covering the pandemic influenza beat and related stories, you may become your organization’s ad hoc expert on flu. How are you going to get the story out if half the newsroom is sick? Read this communications toolkit
for your HR department and management.
Challenges not only include actual health risks in other parts of the world, but the possibility that employees who travel may be stranded or quarantined in another country. Another issue is how to handle people who are re-entering the workplace after returning from traveling to a potential outbreak region.6
Story ideas: How do community members collaborate in their efforts to stay functional? What are the most important businesses in your area? What businesses perform essential functions in your community? Will people who work for these businesses get vaccinated first or not?
Congressional Budget Office, A Potential Influenza Pandemic: Possible Macroeconomic Effects and Policy Issues, Dec. 8, 2006. ↑
Trust for America’s Health, Pandemic Flu and the Potential for U.S. Economic Recession, March 2007. ↑
Continuity Central, Potential pandemic impacts on just-in-time logistics highlighted, Feb. 9, 2006. ↑
International Monetary Fund, The Global Economic and Financial Impact of an Avian Flu Pandemic and the Role of the IMF, Feb. 28, 2006. ↑
Rochelle E. Watkins, Feonagh C. Cooke, Robert J. Donovan, “Tackle the Problem When It Gets Here: Pandemic Preparedness Among Small and Medium Businesses,” Qualitative Health Research 18:7 (2008): 902-912. ↑
Trust for America's Health, It’s Not Flu As Usual: What Businesses Need to Know About H1N1 Influenza, September 2009. ↑