This post first appeared on Risk Management Magazine. Read the original article.
For more from our May issue on natural disaster planning in 2021, check out:
Disaster on Disaster: Unique Challenges for Natural Catastrophe Preparedness in 2021
Armed with lessons learned from the 2020 hurricane season and pandemic response, risk professionals are preparing differently for natural disasters in 2021. Risk and insurance professionals discuss unique considerations, disaster planning for remote workforces, and first-hand perspectives of natural catastrophe response amid the pandemic.
Q&A: How Texas Roadhouse Takes a People-First Approach to Disaster Planning
Patrick Sterling and Matt McMahan from Texas Roadhouse sat down with Risk Management to share some of the lessons they have learned from managing disasters across 600 locations over the past year, preparations for natural disasters in 2021, and insight into building a people-first playbook for times of crisis.
A year into the COVID-19 pandemic, many enterprises have settled into altered arrangements such as remote work. While many have focused on the decreased importance of a physical office, many may overlook that the move to remote operations has both reduced and increased natural catastrophe risks. Now, heading into the 2021 hurricane and natural disaster seasons, organizations must reassess their risk profile with regard to remote or hybrid workforces to ensure the safety of both operations and employees.
Remote work has offered some comfort for risk professionals
with regard to business continuity. For example, shifting to remote working is
now clearly a viable option to continue operations if a hurricane or other
natural catastrophe temporarily makes on-site work too dangerous. According to
Jim MacDonnell, director in BDO’s crisis management and business continuity
practice, “COVID-19 forced many companies to move to a remote workforce,
despite the fact that there have always been concerns about internet bandwidth
to handle the traffic. Those questions have been answered now, so we feel that
COVID-19 has increased overall preparedness should we need to go remote in the
event of a natural disaster.”
Measuring Your Modified Footprint
With many workers now operating remotely, the risks that
natural disasters pose have been somewhat reduced, as companies rely less on
one physical location that must be protected and that employees must travel to
and from. As a result, some risk professionals or their organization’s
management team may even consider hurricanes, wildfires and other natural
catastrophes to be a much lower risk this year.
The exposure has not necessarily decreased, however.
Instead, risk professionals must recognize that the organization’s risk profile
has changed as workers change location, requiring reassessment of where
physical risk truly resides. Enterprises have a much different footprint this
year, and distributed employees likely expand the threat surface that risk
professionals must monitor and manage.
“A remote work force expands companies’ geographical
susceptibility to natural disaster, yet can lessen the organizational
disruption given less workforce concentration,” said Thomas Varney, regional
manager of North America at Allianz Global Corporate and Specialty. “Based on
the current remote locations of many employees, the impact of a natural
catastrophe may be different and the need for ongoing communication will be
critical across many types of natural catastrophe events. This involves a
larger footprint of understanding by employers of events that may have
previously only been local in nature.”
It is critical to know where employees are working and
reevaluate continuity plans based on this new footprint, Varney said. Companies
may need to consider weather risks beyond what they have considered relevant
operational threats in the past. They may also need to expand the list of
locations actively monitored for natural disasters. Heading into hurricane
season, risk professionals should ensure they have a detailed and fully updated
list of the physical locations of all employees operating remotely. Depending on
the scale of the organization, they may need to consider new ways of tracking
these locations and monitoring this broadened threat surface in real time.
They should also consider the distribution of workers across
these locations to assess the risk of disruption from different risk
scenarios—and to evaluate potential ways to reduce disruption. For example, it
is essential to know if employees are largely clustered in a coastal city at
high risk from hurricanes, if some have moved from hurricane risk zones to
wildfire risk areas, or if a notable proportion have dispersed among different
regions.
With the right assessment and mitigation mindset, companies
could find strategic risk management opportunities in the distributed
workforce. Using this approach, many enterprises may actually be able to get
into a stronger baseline position to withstand potential business continuity
threats as a result of diversifying the physical locations from which work is
done.
“Having a remote workforce can actually improve a company’s
ability to prepare for and respond to a natural disaster,” Varney said.
“Natural disasters are, in most cases, local events or, in a few cases like
large hurricanes, regional events that affect a limited geographical area.
Having a remote workforce can limit the number of employees affected, while
others are able to continue to work as normal.”
With some advanced planning, companies can take advantage of
this geographic dispersal to better fortify against potential disruption and
ensure business continuity. “When preparing for a natural disaster, a company
with a remote workforce should understand how to shift important activities
from affected employees to those who can still work,” Varney advised.
“Additionally, it is very important to have written procedures and efficient
communication channels set up prior to any event.”
Ensuring the active and open communication necessary for
effective emergency response should always be top of mind. This year, companies
may need to dedicate additional thought and attention to new employees who may
not have ever met their colleagues. “As the pandemic has persisted, companies
have onboarded significant numbers of associates that have never met their
colleagues in person,” MacDonnell explained. “During a crisis, close working
relationships are influential in determining your success or failure. To
prepare for the upcoming hurricane season, it is critical that your response
teams feel comfortable working together during stressful, high-stakes
incidents.”
Enterprise Disaster Preparation Gets Personal
Remote work has required employees to take company
operations into their homes, but protecting those operations with natural
disaster planning and preparedness remains the enterprise’s responsibility,
regardless of worksite. Now, enterprises must assess how to extend their
continuity planning to ensure safety and functionality at home.
For some companies, there may be a bit less risk this
hurricane season because offices are not the operational hubs they once were.
Needing to close or losing power in a given property does not pose the same
threat. However, that central base is also likely hardened against threats more
than employees’ homes, and enterprises have far more control in keeping
facilities secure and connected than private residences.
“Many companies that continue to accommodate a fully remote
or hybrid workforce have ongoing concerns about their employees’ heavy reliance
on home internet, electric and other utilities,” said Drew Olson, partner in
BDO’s forensic insurance and recovery practice. “While offices may have backup
generators or redundant internet service providers, most employees simply are
not equipped to continue to work from home during a natural disaster.”
According to Olson, this posed considerable problems for
organizations responding to many kinds of natural disasters over the past year.
“As we have seen during crises this year, regional impacts from natural
disasters or manmade events can have significant impacts on an employee’s
ability to work remotely. For example, the recent cold weather event in Texas
resulted in widespread internet and power outages that limited employees’
ability to do their jobs from home,” he said.
As workers continue to endure the COVID-19 pandemic and face the added crisis of natural catastrophes on top of this prolonged disaster, many companies are paying attention to the increased need to care for employees on a personal level. Some are rolling out enhanced measures, investing in mitigation provisions to help employees prepare at home, reducing personal stress and losses as well as professional disruption.
“Companies with hybrid or remote workforces should be
stressing individual and family preparedness as hurricane season approaches,” MacDonnell
advised. MacDonnell and Olsen report they have seen many companies think
outside of the box and outside of the office, introducing new and enhanced
measures to help employees during disasters. These range from issuing mobile
hot sports to offering individual and family preparedness classes.
“Creativity during COVID-19 has known no bounds,” MacDonnell
said. “The companies that responded most effectively made solid investments in
caring for their people and their customers.”