This Month Only! >> $20 off and a FREE SHRM tote with your membership and code TOTE2018!
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
CHICAGO—The HR staff has to be part of the development of an organization’s emergency protocols, an expert on corporate crisis planning told a June 22 audience at SHRM’s 60th Annual Conference and Exposition.
While a business will recover quicker from a disaster or crisis if it has a plan outlining steps to take during and after a crisis, there is reluctance or resistance among businesses to invest time and money to prepare a business continuity plan (BCP), said Kathryn McKee, co-author of the book Leading People Through Disasters (Berrett-Koehler Publishers, 2006). “Psychologists suggest this is denial of an inevitable situation,” she said. However, to overcome that obstacle, HR needs to make the business case for disaster planning, she added.
An organization becomes prepared for a disaster and recovering from it by developing a BCP, and to make the case for developing a BCP, HR can review some questions and present the answers to senior management, McKee said. The questions are:
In addition, HR can use several formulas to calculate the impact a disruption in operations because of a disaster or emergency, McKee said. A leading formula looks at “lost revenue,” and starts by taking the company’s “gross yearly revenue” and dividing it by the “total sales hours” logged by the sales force, she says. The next step is to take the percentage of revenue generating employees who have to be in a non-operational status and multiple that figure by the number calculated by dividing gross yearly revenue by total sales hours, she said. That produces the “number of hours of outage,” or the number of profitable hours that have the potential for being lost, she said.
In addition to the direct loss of profitable hours a potential crisis could have on a business, there is also a potential threat to a company’s reputation that might result, McKee said. If a company does not bounce back within a relatively short period, customers might be forced to turn to a competitor to supply necessary goods, she said. Once those customers are lost, they are difficult to get back, she said.
To mitigate damage caused by lost sales, a company has to keep customers, and the firm has to be prepared to incur “restoration costs” related to returning to an operational status, she said. However, those costs can be managed by a BCP, which requires an organization establishing a core team to oversee development and implementation of the BCP, she added.
While a company’s core team should include an organization’s senior leaders, it should not include the company’s CEO, McKee said. Rather the CEO should appoint a core planning team of senior leaders responsible for the critical aspects of the business, she added. The senior leaders can then determine which of them should specifically work on developing the policies and strategies of the BCP, she said. In addition, the authority of the core team needs to be established, and that is where the CEO can play a direct role by delegating decision-making powers to the core team. In return, the core team should advise the CEO of decisions that have been made or make recommendations that may need board approval.
The core team should also create and issue a plan mission statement, she said. The statement should be succinct and to the point, and it should provide organization and direction for how an emergency situation at a company will be handled. The information covered by the plan mission statement includes:
There are also critical questions a company’s planning teams need to address, McKee said. The questions are:
As part of the BCP process, the CEO should appoint the executive who will be the incident commander should an emergency or disaster occur, McKee said. What needs to be made clear is that the CEO delegates complete authority for incident management to the incident commander, she said. HR plays a key role in selecting the incident commander, and ideal candidates are those who understand the intricacies of a company’s operations. In addition, more than one incident commander will be necessary if a company has more than one location, and if for different types of emergency situations, she said. What is important to emphasize is the incident commander runs the incident, the CEO does not, she added.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 10,000 companies