Most employers insure against fire, floods and theft as a matter of course. But it's questionable how many give a thought to insuring those mobile assets that go up and down the elevators every day and in and out the front door.
That's right: their people.
Even after organizations received a loud and long wakeup call in the form of the SARS epidemic five years ago that resulted in the Canadian quarantine of 15,000 people and the death of 44, not enough attention has been paid to dealing with the business implications of the next pandemic.
And it's not exactly long odds that employers are facing: world health experts estimate that the cumulative probability of a pandemic over time is 3 to 10% in 2008, 14 to41% over the next five years and greater than a one in two chance (26 to 65%) over the next decade.
"Employers are really not doing enough," said Amin Mawani, a professor with the Schulich School of Business who presented a paper on the topic to the World Conference on Disaster Management in Toronto this June. He estimates that a major influenza pandemic would result in absenteeism rates of 35 to 50%.
"What I'm urging (employers) is to go look at past disruptions in your supply chain as a result of a labour strife or a supplier going bankrupt, or a fire, and figure out the link between the disruption and the bottom line," he said. "That link will be different for every company so it's important that everyone do it for themselves."
Mawani said that in some cases, the negative impact of a pandemic might be minimal in the case of a company that derives most of its revenue electronically (either over the phone or via the Internet), but "the revenue and profit drivers in most corporations are employees."
As a case in point he raises the big banks. Sure, they are streaming their customers more and more to Web-based transactions and ATMs, however they have thousands of employees in massive towers and scattered in branches across the country. Even the ATMs are not immune. A simulated U.K. pandemic found that ATMs quickly ran short of cash as those who deliver money to them fell ill. Similarly, supermarkets only carry three days worth of surplus food in storage.
Mawani's solution is simple. Create and act upon a pandemic plan now – "just as you can't buy fire insurance after the fire." He recommends that employers stockpile antiviral medication for all employees. Eight weeks worth of antiviral medication will cost about $250 per employee (or about the cost of a gym membership) and can be stored for five years. For a company of 13,000 employees, stockpiling antiviral medication would cost approximately $3.25 million, plus an additional $500,000 for storage of the drugs. Personal protective equipment cost another $750,000, while planning, training of employees and communication is expected to cost another $700,000 for a total investment or outlay of $5.2 million. Or about $400 per employee.
The anti-pandemic program should be the responsibility of a company's Business Continuative Planning group or, in smaller organizations, the task of the chief financial officer.
The unnamed company with 13,000 employees in Mawani's presentation had a $73-million decline in income as a result of the 2003 SARS outbreak and the effects of a faster-spreading, harder-to-control influenza-type outbreak are predicted to create even higher levels of absenteeism. He concludes that the costs of an antiviral plan significantly exceed the costs of preparing for a pandemic.
"Most companies insure against a fire although the probability of a fire is much lower than a pandemic breaking out," observed Mawani. "We just don't view it as normal insurance." Pandemic insurance is available, he noted, but is "prohibitively" expensive.
Companies are moving in the right direction, however. Mawani said that Rogers Communications' Toronto head office now dispenses the medical-grade "SARS" soap in its washrooms. "Just that kind of precaution has an impact on employee absenteeism even now in the absence of a pandemic," he said. "You get the benefit right now because employees will become sick less often."
Being prepared can also be viewed as a competitive advantage. "You cannot afford to not prepare if your competitor has prepared," Mawani said. "In a pandemic downturn, they could steal your market share, they could steal your customers, they could have uninterrupted supply whereas your supplier would be disrupted." And once a pandemic hits, it will be all but impossible to purchase antiviral drugs at any price.
Implementing a pandemic prevention plan is even simpler for smaller organizations: tell every employee to get a prescription and purchase eight weeks of antiviral drugs and seek reimbursement from their employer.
As a nation, Canada is woefully unprepared for an influenza pandemic. The government has antiviral stockpiles to treat only 17% of the population, Mawani said, and those drugs would be directed only to treat the sick. "Canada has probably the lowest stockpiles among the G7," he said.
Mawani practices what he preaches. He has purchased a stock of antiviral drugs for himself – and his nanny. "[She is] my employee. I can't live without her."