The outbreak of the coronavirus has created challenges for employers. As of April 7, there have been more than 1.4 million cases of the virus reported across 209 countries, while the death toll has risen to more than 81,500.
For multinational organizations, especially those that employ a workforce that travels frequently, the coronavirus is of particular concern. There are several steps these employers should take to prepare for the adversity that could accompany this situation.
An employer’s first priority is to protect the health and safety of its workforce. According to Baker McKenzie, employers should take the following steps to reduce employee exposure to the virus and to minimize the likelihood of its spread:
Find the Workforce
- Work with human resources/people functions to identify exact locations of current employee populations, including employees travelling.
Appoint a Coordinator
- The coordinator, or a group of cross-functional coordinators, should be responsible for tracking the latest developments, reviewing guidance from any governmental agencies and acting as a point of contact for concerned employees.
Understand Employer Obligations in Each Affected Jurisdiction
- Review applicable government health alerts and requirements for reporting.
- Review local laws on employee privacy, association, potential for discrimination and leave/benefit/wage and hour entitlements. Remember that the balance between privacy and public health is achieved differently in different countries, but as viruses spread, those restrictions are often relaxed. For instance, primarily because of data privacy laws, employers in most of the European Union generally may not notify health authorities that an employee has been infected.
- Coordinate internally to develop employee communications and plans. Frequent communications with employees and their families is critical. Keeping in contact with official or governmental bodies such as the U.S. State Department or the British Foreign and Commonwealth Office (FCO) will be essential to ensure the latest updates are available and to ensure employees are aware of any national contingency plans.
Get Managers on Board
- An organization’s managers are the first-line communication and response team. Give them the information and organizing principles they need to effectively lead in this type of situation.
Address Business Travel Concerns
- Organizations whose business involves travel by its workforce into areas where the virus is particularly active should immediately try to establish customer or business contacts through other means, e.g. teleconference, webinar or video conference.
- Businesses with employees who are working or traveling overseas should track travel and health restrictions to allow the company to move quickly in response to concerns these employees may have. Note that in the U.S., the Centers for Disease Control and Prevention (CDC) currently recommends that travelers avoid all nonessential travel to China.
It’s critical for employers to have solid business continuity planning during these situations.
Refer to WorldatWork’s white paper, “Business Continuity Planning for Illness Outbreak or Epidemic” for additional tips on how to act.
A workforce that is infected with an illness, outbreak or pandemic has a trickle-down effect: It could limit the availability, supply or delivery of essential goods and services, interrupt critical business supply chains and potentially threaten the ability to sustain critical infrastructures. Also, consumer demand for items related to infection control likely will increase dramatically, while interest in other goods may decline. The business continuity planning needs to address absenteeism, interruptions to product or service delivery to customers and potential business closures.
Employers should identify the key positions and functions essential to sustain business continuity and develop plans to enable these functions and personnel to continue working, possibly through remote operations. They should also identify and, if necessary, cross-train backup personnel to ensure critical functions are not compromised.
There are also employment law implications to consider in the instance of a shutdown. Understand that wage and hour obligations are triggered, even in a pandemic. Employer obligations to provide pay during a shutdown will vary by jurisdiction. Before implementing any changes to the terms and conditions of employment, employers should be aware of the laws and regulations of the applicable jurisdiction, including any duty to consult with unions, work councils or other employee representative bodies, and government agencies.
Education may be an employer’s most powerful tool in managing the risks associated with contagious viruses and diseases. Whether it be about the disease itself or changes in workplace protocols, it is important for employers to communicate early and often. Ensure that employees have a basic understanding of what they should look for in a possible outbreak as well as common-sense tips to stay healthy:
- Get any vaccine available for a disease that poses a threat.
- Cover your nose and mouth with a tissue when you cough or sneeze. Throw the tissue in the trash afterward.
- Wash your hands often with soap and water, especially after you cough or sneeze. Alcohol-based hand cleaners also are effective.
- Try to avoid contact with sick people.
- If sick, see your doctor and stay home from work.
- Avoid public transportation or avoid rush-hour crowding on public transportation.
- Try to do regular shopping at off-peak hours to reduce contact with other people.
Employ Risk Management Strategies
Employers have relatively easy risk management strategies at their disposal. Worksite-specific strategies employers may recommend include:
- Implement personal social distancing strategies (e.g., where practical, maintain three feet of spatial separation between workers).
- Avoid crowded places and heavily populated gatherings.
- Avoid face-to-face meetings; use conference calls, video conferencing and the internet to conduct business.
- Avoid workplace cafeterias and introduce staggered lunch times.
- Avoid congregating in break rooms.
- If a face-to-face meeting is more practical, minimize the meeting time, choose a large room and sit at least six feet away from each other.
Employers also can monitor individual employee risk for complications. Individuals at high risk for severe and fatal infection cannot be predicted with certainty, but likely include:
- Pregnant women;
- People with compromised immune systems;
- People with underlying chronic conditions; and
- People over age 65.
Once these employee populations are identified (as possible), employers can provide additional protections.
Conduct a Benefits Review
Consider conducting a review of information about insurance, leave policies, working from home, issues related to possible income loss, and when not to come to work.
Also, look at the existing sick-leave policy and determine whether changes (temporary or permanent) need to be made. The policy should not penalize sick employees, thus encouraging employees who have symptoms that could be contagious to stay home so they do not infect other employees. Recognize that employees with ill family members may need to stay home to care for them. Other ideas include:
- Increasing the threshold of absent days, or allowing employees to pool sick, vacation and personal days.
- Covering employees who have exhausted their PTO under short-term disability or salary continuation benefits.
- Instituting a “shared sick leave” program to allow some workers to share their paid time off with co-workers.
- Requiring a medical checkup/doctor’s note for those employees who have been infected and are returning to work.
- Encouraging employees to get the appropriate vaccinations and determining whether the company will subsidize the costs.
- Providing options for emergency child-care assistance.
- Having employees update personal and emergency contact information in the company’s HRIS system.
- Assuring employees of their continued job security.
Legal Ramifications to Consider
There are several employment and other laws that may be directly involved with the coronavirus and must be considered by employers, according to Seyfarth.
These laws include:
- The Occupational Safety and Health Act;
- Worker’s Compensation — Disability Benefits;
- Family and Medical Leave Act; and
- Americans with Disabilities Act.
Ultimately, employers should review all legal obligations and know in advance what it can and cannot do with respect to employees, suppliers and customers in the event of a cutback or shutdown of operations. Employers should also review all vendor and client contracts to determine whether the contracts impose any reporting obligations on the company with respect to communicable diseases/viruses. Some third parties do in fact require companies to report if certain infectious diseases have entered their workforce.
Lastly, employers should review insurance coverage and confirm that policies provide the right types and levels of coverage for crisis situations and are responsive to any changes in the business. Coverage and service levels can vary dramatically, and employers need to ensure the losses they are seeking to guard against (e.g., pandemics) are covered.
Likewise, employers should determine whether policies cover the individuals they want covered, including independent contractors or local nationals.
CEOs Are Pessimistic About Future Economic Growth
Business leaders across the globe are expressing concern about slowed economic growth going forward.
A survey by PwC found that 53% of the 1,600 CEOs surveyed from 83 countries at the World Economic Forum Annual Meeting in Davos, Switzerland are predicting a decline in the rate of economic growth in 2020. This is up from 29% in 2019 and just 5% in 2018 — the highest level of pessimism since the survey started asking this question in 2012.
By contrast, the number of CEOs projecting a rise in the rate of economic growth dropped from 42% in 2019 to 22% in 2020. CEO pessimism over global economic growth is particularly significant in North America, Western Europe and the Middle East, with 63%, 59% and 57%, respectively, of CEOs from those regions predicting lower global growth in the year ahead.
“Given the lingering uncertainty over trade tensions, geopolitical issues and the lack of agreement on how to deal with climate change, the drop in confidence in economic growth is not surprising, even if the scale of the change in mood is,” said Bob Moritz, chairman of the PwC Network. “These challenges facing the global economy are not new; however, the scale of them and the speed at which some of them are escalating is new. The key issue for leaders gathering in Davos is: how are we going to come together to tackle them.”
Revenue Growth Confidence Declines
CEOs are also not so positive about their own companies’ prospects for the year ahead, with only 27% of CEOs saying they are “very confident” in their own organization’s growth over the next 12 months — the lowest level we have seen since 2009 and down from 35% last year.
While confidence levels are generally down across the world, there is a wide variation from country to country, with China and India showing the highest levels of confidence among major economies at 45% and 40% respectively, the United States at 36%, Canada at 27%, the United Kingdom at 26%, Germany at 20%, France 18%, and Japan having the least optimistic CEOs with only 11% of CEOs very confident of growing revenues in 2020.
When asked about their own revenue growth prospects, the change in CEO sentiment has proven to be an excellent predictor of global economic growth. Analyzing CEO forecasts since 2008, the correlation between CEO confidence in their 12-month revenue growth and the actual growth achieved by the global economy has been very close. If the analysis continues to hold, global growth could slow to 2.4% in 2020 below many estimates including the 3.4% October growth prediction from the International Monetary Fund.
China Looks Beyond the U.S. for Growth
Overall, the U.S. retained its lead as the top market CEOs look to for growth over the next 12 months at 30%, one percentage point ahead of China at 29%. However, ongoing trade conflicts and political tensions have seriously dented the attractiveness of the U.S. for China CEOs. In 2018, 59% of China CEOs selected the U.S. as one of their top three growth markets. In 2020, this dropped dramatically to 11%. The U.S. loss has been Australia’s gain, with 45% of China CEOs now looking to Australia as a top three key growth market compared with only 9% two years ago.
The other countries making the top five for growth are unchanged from last year — Germany (13%), India (9%) and the UK (9%), a strong result for the UK given the uncertainty created by Brexit. Australia is just outside the top five, boosted by its increased attractiveness for China CEOs.
Worries About Uncertain Economic Growth on the Rise
In 2019, when asked about the top threats to their organization’s growth prospects, uncertain economic growth ranked outside the top 10 concerns for CEOs at number 12. This year it has leapt to third place, just behind trade conflicts — another risk that has risen up the CEOs’ agenda — and the perennial over-regulation, which has again topped the table as the number-one threat for CEOs.
CEOs are also increasingly concerned about cyber threats and climate change and environmental damage; however, despite the increasing number of extreme weather events and the intensity of debate on the issue, the magnitude of other threats continues to overshadow climate change which still does not make it into the CEOs’ top 10 threats to growth.
While CEOs around the world express clear concerns about the threat of over-regulation, they are also predicting significant regulatory changes in the technology sector. Globally, over two-thirds of CEOs believe that governments will introduce new legislation to regulate the content on both the internet and social media and to break up dominant tech companies. A majority of CEOs (51%) also predict that governments will increasingly compel the private sector to financially compensate individuals for the personal data that they collect.
However, CEOs are of two minds as to whether governments are striking the right balance in designing privacy regulation between increasing consumer trust and maintaining business competitiveness: 41% say it does strike the right balance and 43% say it doesn’t.
The Upskilling Challenge
While the shortage of key skills remains a top threat to growth and CEOs agree that retraining/upskilling is the best way to close those gaps, they are not making much headway in tackling the problem, with only 18% of CEOs saying they have made “significant progress” in establishing an upskilling program. This sentiment is echoed by workers. In a separate survey by PwC, 77% of 22,000 workers around the world said they would like to learn new skills or retrain, but only 33% feel they have been given the opportunity to develop skills outside their normal duties.
Climate Change: Challenge or Chance?
Although climate change does not appear in the top 10 threats to CEOs’ growth prospects, CEOs are expressing a growing appreciation of the upside of taking action to reduce their carbon footprint. Compared to a decade ago, when the survey last asked this question, CEOs are now twice as likely to “strongly agree” that investing in climate change initiatives will boost reputational advantage (30% in 2020 compared with 16% in 2010) and 25% of CEOs today, compared with 13% in 2010, see climate change initiatives leading to new product and service opportunities.
While views of climate change-driven product and service opportunities have remained relatively stable in the U.S. and the UK, there has been a dramatic shift in China over the last 10 years. In 2010, only 2% of China CEOs saw climate change leading to opportunities whereas in 2020, it rose to 47%, by far the largest increase of CEOs in any surveyed country.
However, for these opportunities to turn into long-term success stories the principles of climate change need to be embedded right across a business’s supply chain and customer experience.
Brett Christie is managing editor of Workspan Daily. He can be reached at firstname.lastname@example.org.