As the coronavirus worldwide pandemic spreads, the ramifications for any business has gone from temporary disruption to a serious impedement. The worst-case scenario is mass quarantines, widescale mandated business shutdowns, scores of sick employees, and massive supply chain disruption.
First detected in December 2019 in Wuhan, China, the coronavirus has spread globally to more than 120 countries, sickening more than 130,000 people and killing nearly 5,000 as of March 13.
Here are 10 steps your business can take to mitigate risks in case of a coronavirus pandemic.
1. Follow the advice, warnings, and guidelines issued by federal, state, and local government. In many cases, your business will not have a choice. Soon, quarantines could be mandatory, businesses may be closed, and travel will be restricted or banned in hardest-hit areas. Health facilities will be overwhelmed, emergency response times will be slowed. There will be some warning signs that such measures are coming, but they may evolve rather quickly. Watch for regular and widespread health alerts coming from local governments and if they start ramping up efforts to control the pandemic.
2. Closely monitor the health of employees. In China, this has come to mean checking the temperature of everyone arriving and leaving work and sending anyone with a fever home to a 14-day quarantine. That may seem extreme, but clearly, sick employees should stay home. Employees showing any symptoms should be strongly encouraged to work remotely, and many companies in the United States have made remote working mandatory. Stress prevention measures like hand-washing and good hygiene. If the local healthcare system becomes overwhelmed, ramp up employee access to third-party doctors or telemedicine. Employees should learn what a protective mask can do—prevent a sick person from infecting someone else—and what it likely cannot do, which is prevent a healthy person from getting sick.
3. Establish a pandemic preparedness plan. If your office or workplace can work completely remotely, establish a plan to do so if you haven’t already. If that is not possible, identify key employees who need to be at the workplace and establish a schedule where they come into physical contact with as few coworkers as possible. Limit visits to the workplace by vendors and suppliers. Establish a policy for deliveries to be made to the workplace without employees coming into contact with delivery drivers. Prepare to operate workplaces with a skeleton staff, where most everyone works from home but a few employees rotate into the office on a weekly basis.
4. Communicate, communicate, communicate. Keeping employees up to date on emerging threats—and the company’s response—is of the utmost importance. Spin up your company’s crisis communications now, advised James Green, director of Risk Advisory Services at SAI Global. An informed employee is much less likely to panic and overreact. Employees should be encouraged to watch for signs of sickness in themselves and fellow co-workers and know to whom they should report their concerns.
5. Convey financial risks posed by the coronavirus. With disruptions to supply chains and offices, stores, and businesses shut down, there are real threats to a company’s bottom line in the short and long term. Public companies need to convey these risks to shareholders and regulators, despite the fact the risks are developing and changing by the day.
6. Plan for major supply chain disruptions. In response to the growing coronavirus threat to their supply chains, some businesses have taken steps to reduce their production capacity by 10 percent or more for the next few months, and delay shipments of product by weeks or months, said Green. “Companies should be prioritizing delivery to customers based on revenue and relationships,” he said.
7. Re-examine coronavirus risks associated with third-party suppliers. In addition to the usual risks, analysts should look at risks associated with the countries their suppliers operate in, and those risks should be continuously monitored and updated, said Brian Alster, general manager of third-party risk & compliance at Dun & Bradstreet. If at all possible, start searching for alternative sources for critical components in your supply chain, he said.
8. Restrict non-essential travel. Quarantines and travel bans are snarling business travel all over the world, with most companies imposing bans on all business travel. Travel bans may are upending plans for conferences scheduled for the next 3-6 months, especially those with attendees traveling from abroad.
9. Expect international consumer markets to be hit—hard. Already, China’s huge appetite for consumer goods has taken a demonstrable hit, and it will get worse before it gets better across the globe.
10. Keep an eye on your deliveries. E-commerce and manufacturing companies should be concerned that they won’t be able to ship products to and from China and other key areas of the world. At the moment, the delivery industry in China is robust and healthy, perhaps even buoyed by the crisis, according to Kedl and a recent story in the New York Times. Anecdotally, everyone in China is having food delivered to their homes, Kedl said. That trend could expand to the United States soon.
Coronavirus: Tips for risk management
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Ten steps your business can take to mitigate coronavirus risks