Analysis

Natural disasters and the challenge of business resumption

  • Americas
  • Creating a Resilient Organisation
  • Business Continuity and Crisis Management Planning
Rebecca Scorzato

Rebecca Scorzato

Natural disasters and the challenge of business resumption

 

Over the past month, natural disasters ranging from hurricanes and typhoons to earthquakes have had major impacts across the world. Alongside the human cost, massive material damage has severely disrupted businesses. Resumption of business activity is a key part of the wider recovery and essential to mitigating the economic impact of natural disasters.

Despite many regions’ familiarity with natural disasters, resumption planning is a widely overlooked aspect of the business continuity process. In the affected regions, the natural disasters have caused substantial damage to local infrastructure, property and—most importantly—communities. Businesses seeking to immediately resume operations will encounter major challenges with employee availability, transportation infrastructure, utilities and basic building services. It is not too early to start planning how to safely and steadily resume regular business operations.


Keys to success
  • Remain in contact with employees and business partners. Your resumption timetable will be contingent upon their availability.
  • Conduct regular calls with your organization’s crisis management team. This group should be addressing policy issues and questions stakeholders will have regarding operating status, pay policies and impact to the overall business.
  • Understand your critical workforce needs and prioritize the order in which you need to recover operations. If possible, temporarily shift critical responsibilities to team members outside the affected region and focus resumption on employees most critical to continued operations.
  • Don’t rely on local government and services, at least in the short term. Governments and public services will focus first on critical infrastructure and community safety. Anticipate delays in services such as power restoration or the issuance of occupancy certificates.
  • Expect long lead times for replacement equipment. Shipping delays should be expected as roadways reopen and sellers rush to fulfill orders.
  • Review insurance coverage.  Risk management should consider what policies will cover loss or damage of assets and work stoppage.

Situational analysis – a three-step approach
  1. The first step to business resumption is accounting for personnel and gauging their availability. Business leaders must consider employee availability and account for unplanned leave. Critical staff and alternates should confirm availability so they can be included in the recovery process. Companies will need to confirm emergency leave policy and communicate details to all employees. Many organizations will allow employees to take unexcused absence to care for their families and property.
  2. The second step is a damage assessment.  Office buildings and facilities may have incurred major structural damage and flooding. A damage assessment must be completed to ensure the structures are suitable for occupancy and will not put employees at risk. If offices and/or facilities are not accessible for some or all employees, assess whether the company has the ability to resume certain business functions remotely.
  3. Finally, establish a step-by-step process for having employees return to the business site once it is safe and secure. Working under the direction of a business leader, support functions such as facility services, IT and security should return first to re-establish fundamental office operations. Once support functions are recovered and the workplace is considered safe and secure for occupants and operations alike, the remaining executives should return to work. This group will set the example for the balance of personnel who will return to work shortly afterward.

Risks that will inhibit business resumption

The factors below should be considered when determining the business resumption plan:

  • Employee morale and trauma. Disasters can bring devastating loss to affected communities. Business leaders must be considerate of their employees’ circumstances and offer help if they’re positioned to. Some businesses may consider providing financial assistance to allow employees to focus on work without being concerned with their own personal financial state. This may include paying for damage assessments of employees’ homes or offering stipends for flood damage, food or other in-kind assistance.
  • Security posture. The integrity of your facility’s physical, electronic and technical security system might be compromised and may require fortification to again provide your employees with a safe and secure workplace (i.e., duty of care). Conducting a security review of the facility, especially when your security personnel have not been present during the crisis, is key. Looting is an unfortunate reality with natural disasters; security resources should work closely with business stakeholders to ensure key assets are accounted for.
  • IT security posture. Employees working from home may be more likely to circumvent IT security measures by using non-company-approved equipment (laptops and mobile devices) to conduct business. This introduces a risk to the IT infrastructure, especially if those computers or devices have vulnerabilities. Natural disasters have also been known to lead to increases in phishing and other malicious cybercrime as hackers take advantage of individuals’ willingness to donate to hoax causes.
  • Employee commute/travel safety. Road, air travel or public transport conditions may have deteriorated. Ensure that employees have safe and accessible routes to travel to and from the office.

Resumption planning can really make a difference when seeking to resume operations in challenging circumstances. It is never too early to start planning how to safely and steadily resume regular business operations should a natural disaster strike. 

 

Authors

  • Rebecca Scorzato - Partner
  • Arun Sharma - Associate Director 
  • Marco Leijnse - Principal

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