Business Continuity and Contingency Planning
As the world and New Zealand start to react to the threat of the Covid-19, as employers we find ourselves quite quickly wondering how this may affect our own businesses and what we can do to plan for what may eventuate. Already we are seeing the effects of this through some sectors with some devastating consequences.
Time to dust off our Business Continuity Plan - a revisit and refresh to ensure we are ready for what may lie ahead. As a business who provides advice to employers, and also as an employer of my own staff, it’s timely to revisit the planning around interruption of business operations. Over the past few years we have seen issues arise from earthquakes in the South, businesses who have suffered losses through fire and flooding, there was also SARS and the Bird Flu scare.
Planning for business continuity will help you to identify the most important aspects of your business and the critical risks in these areas. The aim is to help you to recover as quickly as possible. Think about the following aspects – what are your specific risks if something were to go wrong? Is doesn’t need to be a pandemic or natural disaster. How would you get back to a business as usual state? And what options should you consider if you couldn’t return to business as usual.
To start with your business continuity plan you’ll need to identify your key products or services, most profitable, least profitable and what are the essentials you need to carry out these activities. Who are the key people within your business, and this won’t always be limited to employees. What about your vital business connections – for example suppliers, service providers, regular customers, etc. Plant and equipment – what do you need in order to do what you do – what is essential and how what would you do if you didn’t have access to your usual equipment? In terms of location, where could you work from if you didn’t have access to your usually work premises? When planning for the unexpected, think outside the square in terms of where your business could potentially operate from – for example, if your premises were damaged or unavailable, could your staff work from home or another location and how easily could company information and data be accessed in order to do so. How would your customers know how to find you or contact you? Do you have appropriate insurance cover in place to protect you against losses? Business interruption insurance can help cover businesses with their normal operating expenses and this will likely include covering wages for a period of time whilst your business may not be generating an income. If you couldn’t run your business – who could? Have you identified key roles within the business and their roles in helping your business operate? It might even be a good idea to talk to your bank manager about managing cash-flow should a disaster occur.
In terms of managing your staff, employers have obligations to their employees under the Employment Relations Act. Business interruption can present itself in many forms – not necessarily through a national disaster, therefore businesses can’t rely upon outside assistance as a given.
An important factor when dealing with any interruption in your business and then subsequent decisions around running the business and negotiating with your staff is to keep communication lines open and active. A stressful time for all concerned and a flexible and common-sense approach is needed to get businesses up and running and staff back on board.
There is a general obligation for employers to pay salaried and wage workers who are fit, willing and able to work but can’t because their place of employment is closed or damaged. There are other options which include the negotiation of using annual leave for a period of time, negotiating a reduction in wages, unpaid leave or the offering of alternative work.
Planning and communication are key in times of adversity and we can take practical steps to minimise the impact such an event could have on our own situations.