This post was co-authored by Jerry Pinataro, Senior HR Consultant, and Regina Walters, Consulting CFO.
As COVID-19 spreads within the U.S. borders, companies are taking immediate action to protect their employees and sustain business operations as much as possible. Being proactive and planful is the best policy and so much is unknown with a virus like this that you must move quickly, communicate often, and act with transparency. As business leaders, the responsibility of protecting employees, customers, and the business sits on your shoulders. Below are best practices and considerations that will not only help you weather the virus, but also have a lasting impact on your business success.
HR Preparedness
Revisit Your Sick Pay Policy
When was the last time your company reviewed or updated your sick pay policy? If you had to think hard to remember, it has probably been too long. Sick pay is not only beneficial for employees who need to take days off for illness, but it can also be a great recruiting tool. Can having a strong sick pay policy keep your company healthier? Absolutely. In fact, 9 out of 10 employees admitted going to work sick, according to new research from Robert Half. Having a sick pay policy that employees are comfortable using will encourage sick employees to stay home to recover instead of coming to the office where they can spread illness to the rest of your employees.
Develop the Right Culture
It is one thing to say you have a great sick pay policy, but it is an entirely different thing for employees to feel comfortable using that time. We have all worked for a company that had a sick pay policy on paper, but when employees tried using it, they were given a hard time by managers and co-workers or harassed for doctor’s notes to prove they were sick. This is where company culture and having employees who are comfortable using their sick time comes into play. When employees feel supported to use their needed accrued sick time, they are much less likely to go to work sick, which greatly reduces the chance of illness spreading.
Ability for Work Remotely
Today, it is possible for most employees to work from anywhere with reliable internet. Having a remote working policy for your employees will not only improve morale and enhance recruiting potential, but it can also help keep your workplace healthier. When employees have the option to “work from home,” they are much less likely to come into work sick. Even if you don’t usually have a remote workplace, how fast can you transition to one? Does your company provide your employees with the tools, technology, and access to work from anywhere? Can you limit in-office work to essential staff and stagger shifts? Can you provide them with their own workspace, even if you have an open office today? In many countries, employees have been on lockdown in their homes only allowed to leave once every couple of days or only once per week. This is an extreme example, but what if your employees could not come into work? What if they were stuck on a cruise ship or in quarantine for weeks on end? If your company is set up for remote work or can quickly shift to enable it, you have a better chance of keeping your business running. If you are in manufacturing or any industry where your employees cannot work remotely, you may have to look at alternatives to keep your employees and customers safe, including temporary shutdowns. Even in China, where the virus began, manufacturing is beginning to ramp back up as employees are coming back to work. If you do have to shut down temporarily, you need to have protocols for doing so as well as a “return to work” requirement before you can reopen. This will include ensuring that work areas are disinfected and potentially providing protective gear to help reduce risks.
Keep Your Office Clean
There are “levels” of clean. When was the last time you met with your janitorial staff or cleaning company? Plan a meeting with them and review what products they use; are they using appropriate disinfectants? Have them walk you through a typical cleaning routine to ensure its thoroughness. You may be surprised how much or how little is being cleaned. With stores either running out or limiting purchases of items like hand sanitizer and disinfecting wipes, how does your supply closet look? Whether it is the common cold, flu, or coronavirus, all workplaces should have the right supplies to keep their workspaces clean and healthy. That might mean each employee has hand sanitizer at their desk or ask employees to keep their work area clean with disinfecting wipes. These little prevention measures can pay off in a big way when it comes to having a healthy team.
Set Travel Restrictions
At the time of this publication, many major employers have already put travel bans in place through April, including quarantining employees for two weeks after personal travel. This is a huge move for organizations to make to ensure that their employees stay healthy and their business stays strong. If you have not already done so, consider restricting travel for your company until further notice to mitigate employee exposure to coronavirus. If, for some reason, you have employees that must go on a work-related trip, do you have training in place for your employees on travel best practices to keep them as safe as possible? Can you provide your employees with masks and hand sanitizer while they are traveling? Consider developing a policy with training on safe travel practices. This is an excellent time for companies to review and understand your liability insurance, including CGL, D&O, E&O, and Workers’ Compensation Coverage. It is essential to know what types of coverage you have before sending employees on a work-related trip.
Update Communications Lists
When did you last update your employee roster and contact information? Is your protocol to gather contact information during onboarding and then update annually? A lot can change in a year. You should review your employee roster and make sure that you have current and accurate ways of contacting employees and notifying them outside of work. That means having good personal cell phone numbers and emails for all employees. Also, implement a system where the company can send out mass text messages to all employees to notify them of changing work conditions or emergencies. There are many text messaging options available from the simplicity of group texts for smaller organizations to a mass text message system provider like Text Magic.
Know the HIPPA Rules
What about HIPPA? As an employer, can you ask or share employee information with anyone necessary to prevent or lessen the health risk? According to Ford Harrison Global HR Lawyers, yes, you can. “The ultimate result is that most employers will not fall under HIPAA. But be aware that there may be other state or federal rules that apply. Fortunately, in an outbreak of an infectious disease such as coronavirus, HIPAA-covered employers will have the same freedom as HIPAA-excluded employers to share employee information with anyone as necessary to prevent or lessen a serious and imminent threat to the health and safety of a person or the public–consistent with applicable law. Thus, an employer may disclose an employee’s health information to anyone in a position to prevent or lessen the serious and imminent threat, including family, friends, co-workers, caregivers, and law enforcement, without an employee’s permission.”
For additional information about keeping your employees, customers, and workplace safe, visit the World Health Organization’s Guidelines for Getting Your Workplace Ready for COVID-19.
Financial Preparedness
Diversify Your Global Market
If your company relies on supplies, components, or products from the global market you need to have a contingency plan. If your business is relying on one factory in China for all products or components, more than likely, you are in a tight spot already. It doesn’t matter if it is the coronavirus or a natural disaster that hits your supplier; you must have a contingency plan. If possible, establish a diversified supply chain from different suppliers in different countries. It is always a good idea to have a back-up domestic supplier lined up for times like this. Even if the domestic supplier may cost more, it may be better to pay more for a domestic product than to have no product at all. Diversification also applies to where you sell your products. If your lead sales channel is in an impacted area, you will need to prepare for a decrease in sales of your products there as well. As events are canceled and areas are self-quarantining, retailers will have to adjust for both reduced business and then pent-up demand following the crisis. And as distribution channels are interrupted, suppliers will have to prepare for holds on inventory.
Revise Your Forecasts
With the disruptions we’re already experiencing and predicted interruptions in supply chains, travel, events, advertising, and retail purchases, companies need to begin evaluating the direct and indirect impact of the coronavirus to their line(s) of business and the industries they serve. The coronavirus is so fluid, the path of the virus is unknown. Executives need to revise forecasts daily based on where cases are confirmed as the virus spreads and as it dissipates. How are the significant changes going to impact your business, both short-term and long-term? Look at worst- and best-case scenarios and plan for the financial impact.
Adjust Your Financial Focus
There are several initiatives that you should be addressing now on the financial front to help prepare your organization for what will be coming in the short term.
- Revenue Recognition – How is this going to impact the way your business currently accounts for revenue on the financials?
- What are the implications on assets and liabilities?
- How do you provide risk disclosures when it’s still unknown, including meeting GAAP and SEC requirements?
- If you provide risk disclosures based on the unknown, how exposed are you to future lawsuits if the outcomes were not favorable to the company?
- What type of business disruption insurance do you have?
- How is this going to impact your cash forecast?
Have an Operational Back-Up Plan
Companies must plan to ensure day-to-day functions and operations are covered, including those in the finance and accounting department. Is your accounting team cross-trained? Are other employees cross-trained? Can you do payroll remotely? Do you have the ability to pay bills without coming into the office? In addition, you may want to look at how you can lower overhead overall.
Provide a Cybersecurity Refresher
Cyber criminals use current events and company distractions to their advantage. Phishing scams with coronavirus themes have increased. Utilize this time to provide a refresher for your employees around your policies and situations where they should be on high alert. Also, how are you protecting your systems if you move all employees to remote access? Are their home networks secure? Do you have secure VPN options for your employees? Are remote computers property protected with the latest virus software?
For additional resources around preparing your business, visit McKinsey’s report on COVID-19: Implications for Business.
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In the current fluid global business environment, the future of your business changes daily. vcfo is your partner through all stages of your business life cycle, in good and challenging times. As such, we have compiled a resource page with critical information to help you best navigate this crisis.
Please give us a call or work directly with your current vcfo consultant for support and business recommendations during the coming months.
