Business Recovery Plans Essential as Hurricane Season Nears

Stay informed and ready to meet both everyday challenges and long-term planning and policy-making goals, with focused news, practical information, and strategic insights on all HR-related...

By Genevieve Douglas

Increasingly severe natural disasters and unpredictable weather patterns are disrupting workplaces across the U.S. and serve as a warning that business continuity and workplace recovery plans should be in place long before disaster strikes.

“Ever since Katrina” in 2005, “we have made sure to stay on our toes,” but other small businesses are likely not as prepared, Judy Weitz, CEO of New Orleans-based Compucast Interactive, told Bloomberg Law. Compucast supplies area businesses with internet and web services. When Hurricane Katrina struck, employees loaded computers into cars and headed to Houston—where the company has staff and clients—to keep services active while they weathered the storm, Weitz said.

Continuity plans regularly appear in company employee handbooks, yet comprehensive strategies that cover a wide range of disruptions—and that have been tested and widely communicated—may not be so common. Technological advancements can help businesses continue operations after a disaster, but continuity plans must make those upgrades a priority to be effective and address other needs to smooth productivity.

Companies that conduct business along the Atlantic and the Gulf of Mexico coasts in particular should anticipate the need for contingency planning. The 2017 hurricane season trifecta of Harvey, Irma, and Maria now make up the majority of the top five costliest storms to hit the U.S. and its territories, at $125 billion, $50 billion, and $90 billion, respectively, according to data from the National Oceanic and Atmospheric Administration. Fourteen named storms, seven hurricanes, and three major hurricanes are predicted for 2018, just one piece of the potential disaster puzzle businesses can anticipate this coming year.

Companies are realizing that the likelihood of something bad happening are higher than previously thought, and the effects of a crisis are much more serious and disrupt business operations with much greater velocity, Lillian Borsa, internal audit, compliance, and risk management solutions partner at PricewaterhouseCoopers, told Bloomberg Law April 9.

Post-Katrina Lessons

Large employers usually are aware of the importance of business continuity plans, but the time and resources needed may not be given as high a priority in smaller operations, Weitz said.

Compucast kept clients and some Louisiana institutions online after Katrina, as internet and communication services remained unreliable in the aftermath of the storm Weitz said. This was possible because the company’s network didn’t depend exclusively on servers in or near New Orleans, she said.

In the years since Katrina, the company has moved its internet operations to the cloud and created a “disaster portal” for clients that helps the business and its clients keep employees and others updated during a crisis, Weitz said. Compucast also changed over to laptops, making it easier to evacuate with equipment, she added.

“Having a really strong IT infrastructure in place is also really useful,” Karl Bryant, senior vice president in the strategic risk consulting practice of Marsh Risk Consulting, told Bloomberg Law. Today, most technology infrastructure no longer resides in the physical office, making it easier for businesses to continue operations in times of disruptions and also making it “easier to deploy resources when you need them.”

Borsa agreed, saying that adapting new technology is essential for contingency plans, in addition to corporate governance needs, crisis management strategies, emergency response best practices, and disaster recovery budgets.

Secondary Work Locales

With work-flex technology, employee work-at-home arrangements often figure into continuity plans for companies in service-based industries that use traditional offices, Bryant said.

Extensive planning is needed, however, even with simple telework solutions, Bryant said. Employers must ensure workers can access the company’s internal network and that there are firewall security measures for sensitive company information and appropriate infrastructure in employees’ homes to get work done, he said.

Businesses that need in-person collaboration and interactions also have disaster contingency workspace possibilities, such as mobile laboratories, temporary trailers, or brick-and-mortar office spaces, Bryant said. Large conference rooms in area hotels also have been used as a quick backup when disaster strikes, he added.

The price for these solutions varies significantly, however. According to Bryant, money set aside for business continuity plans often are driven by the amount of revenue lost while the operations are in limbo balanced by what can be set aside indefinitely for future needs.

Companies usually will rent new office space as a long-term solution, Bryant said, but securing that new space can take time to prepare depending on the company’s location. For example, it’s harder to find new office space in Manhattan than in other cities like Atlanta, where it is more readily available in the ever-expanding urban sprawl.

A Plan in Place

It’s important to find a space where employees can work, but that’s not the only factor to consider after a disaster. Human resources departments should start with a business impact analysis to understand what happens if an organization loses its facility, technology, personnel, or partners that are essential to the production or delivery of products or services, Borsa said.

Overall, Compucast has made sure to “have a lot of safeguards in place” should another storm hit, Weitz said. Texting, for example, used to be a good backup plan for communications before it became so popular, but now the service can be disrupted in a disaster with overuse just like phone lines, so employees know to rely on email and other digital communications instead.

The last key to creating a successful plan is testing its viability, Bryant said. “The plan may be solid, but if it doesn’t fit the needs of the workforce, it won’t be carried out,” he said. “You have to make sure that whatever plan you have in place can actually work.”

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Human Resources Report™