How to protect your business from coronavirus
Companies that prepare for circumstances they can predict are in the best position to react to events they can’t control.
Business owners facing the threat of the coronavirus (COVID-19) find themselves confronting serious consequences for their businesses and their employees. Those who have not been affected by the outbreak are still bracing for the potential of a sustained global economic slowdown or other “unknown unknowns.”
Below is a list of actions you should consider immediately.
Protecting your employees and company from legal risks
Many employers have modified travel policies and cancelled large-scale events. This is the time for leadership to step up and make sure every employee understands that their safety is your No. 1 concern.
- Create or re-evaluate your business continuity plan. Ensure your systems are sound and that you have methods to communicate with your employees en masse in the event of an emergency. There are countless mass-texting systems available, such as Simplified Alerts.
- Send a companywide memorandum (or hold an all-hands meeting) and reiterate your workplace wellness, work-from-home, sick and PTO policies. Reinforce that any employee with a fever or cough should stay home. It is important for employees to understand that you will not take punitive measures if they miss work. Consider offering training on workplace hygiene, and do not stigmatize those who may be ill.
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- Re-evaluate your cleanliness procedures. Perhaps publish a schedule to clean bathrooms and common spaces on a regular cadence, posted in public view. Sanitize door handles, projection equipment, and other surfaces touched by multiple people. Ensure you have ample supplies like sanitizer, soap and paper towels stocked in your bathrooms. Bathrooms should have “no-touch” receptacles. Educate employees on hygiene, and communicate that it’s OK for employees to request no handshakes to minimize the spread of the common cold or flu. These are good practices to maintain for every cold and flu season.
- If you do not have a work-from-home program, this may be the time to enact one. If your company does not have systems that promote virtual work, consider implementing it. Consider video conference systems (such as Zoom) that could be part of your effort to connect remote employees.
- Do not incite panic. COVID-19 is not a major outbreak in the United States. If you have employees in areas that are impacted by the virus or who are returning travelers from those areas, establish a protocol on what you will do if an employee becomes ill. Check with your legal counsel, but know it is likely that you must notify your employees if they are at immediate risk. However, you must do so within the confidentiality requirements governed by the Americans with Disabilities Act and HIPAA.
Educate your supervisors on how COVID-19 spreads.
- Take proactive steps to ensure your employees’ safety while traveling. Consider which health agencies can come to their assistance while on the road, and remember that your health insurance might not be valid internationally. U.S. embassies may be able to provide support for U.S. citizens in need of emergency assistance while abroad.
- Keep communications you send to employees simple and factual. Reports indicate that online scammers are taking advantage of coronavirus fears in order to steal personal information. Educate employees on phishing threats and best practices for avoiding scams.
- The spread of COVID-19 in the workplace could be grounds for a workers compensation complaint or civil suit. Ensure supervisors are well educated on options for anyone who becomes ill, and carefully script language you will use to communicate with ill employees and with others. This level of structure may be even more important for remote offices, who lack access to senior management and whose actions could have significant financial impact.
- You may need to hire an HR consultant or professional employer organization (PEO) if you don’t already have an HR professional who is well-read on federal, state and local employment law. You may need to make adjustments to your company handbook to ensure you do not discriminate against any employee in the execution of these policies.
- In general, it’s always a good idea to gain awareness of resources available in your area for healthcare, temporary housing and emergency supplies.
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Protecting your customers and shareholders
Understanding these threats should be part of your strategic plan, which should also include a contingency plan outlining what to do if an outbreak impacts your facility or production. If your business needs to pivot, choices include:
- Outline all single points of failure. While one might focus on a product supplier or engineer with special capabilities, companies have other risks such as with technology providers or delivery providers. Management should be thinking about any and all critical systems, vendors and employees that would dramatically impact service levels if they were suddenly unavailable. In many industries, specialized workers require credentials and security clearances, and should they be absent, your projects may be at risk.
- As of this writing, most companies have already evaluated their supply chain for concentration risk based on today’s assumptions. You should expect each supplier to provide you with a plan of action on how to mitigate your risk.
- Companies moving tangible goods may map out their suppliers, looking for vulnerabilities in supply routes, transportation or even banking. Some even collaborate with customers and vendors in working groups to prepare for crises.
- Companies are also reevaluating their supply chain designs. Yet another market shock reminds us that concentrating with a single shipping region far from the U.S. comes with an element of risk.
- Reports out of China indicate there is propaganda blaming the U.S. for the outbreak, and U.S.-China relations may be more strained than before the phase 1 tariff deal was announced. U.S. customers could be further incentivized to seek alternatives to traditional supply chains in the event that U.S-China relations sour further.
- If appropriate, send a letter to your customers clarifying your intentions and putting them at ease. Your long-term reputation is at stake, so be intentional about the scripting of this communication. Reinforce protection for your employees and your intent to communicate clearly on anything that may impact your service level. You need to be specific enough to make your customers feel safe that you have a handle on the problem. Use this opportunity to prompt virtual meetings with customers as a more productive way of doing business.
- Evaluate your sales plan. If your salespeople have been stymied by travel restrictions, you may need to reorient their activities so they are working productively. Leaning on marketing for digital tools such as white papers, case studies and testimonials may be amplified at a time when salespeople might be immobile. In some companies where business is conducted face-to-face, a sales slump could follow.
- Explore new products or services that mitigate your customers’ risk. There has been a 150% increase in travel insurance premiums as customers have flocked to products that will protect them. What could you guarantee?
- Strengthen your balance sheet and cash position. In times of chaos, cash is king. This is not a time to fall behind on receivables. Borrowing costs are lower, and this could be the time to hoard cash in case of an extended slump. This would also be a time to refinance bank notes.
- If your volume is low, institutionalize work procedures and cross-train. Consider whether you have other offices that can pitch in, or outsource alternatives for entire functions. Cross-training will be critical if you find yourself short a significant number of workers.
- Consider buying financial instruments that can protect you. For example, some companies purchase currency hedges or “safe haven currencies” as protection at times of international volatility.
- Manage your fixed costs. During a period of declining demand, keep fixed costs low by outsourcing functions that are not integral to your operations.
The business community around the world will continue to experience new impacts of the virus on their operations and employees. While we can’t predict the outcomes of coronavirus and other risks, business leaders need to be thoughtful about the potential consequences of an outbreak.
- Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), February 2020
- Coronavirus Resources for Retailers
- Coronavirus Travel Restrictions – NRF The Voice of Retail
- Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Conference
- Proclamation on the Suspension of Entry as Immigrants and Nonimmigrants of Certain Additional Persons Who Pose a Risk of Transmitting Coronavirus
- CDC to retail industry: Now is the time to dust off preparedness plans
- CDC Business Sector Call for COVID-19
Category: Risk Management