By TOM SHEAN, The Virginian-Pilot
© March 11, 2007
Almost a year ago, the CEO of Jo-Kell Inc. in Chesapeake began wrestling with an issue that many small businesses had ignored. Suzy Kelly wondered how many of the company's 57 employees would show up for work if a flu pandemic struck Hampton Roads. Public health agencies had predicted that a global outbreak of a new, highly contagious strain of flu virus eventually would hit the United States. In addition to inflicting widespread illness and death, the pandemic, they warned, would disrupt business activity.
As much as 40 percent of the nation's work force might be absent during a pandemic because employees would be sick, frightened or caring for family members, the Labor Department's Occupational Safety and Health Administration has cautioned.
Kelly, whose company distributes electrical equipment for shipboard and industrial use, decided last spring that Jo-Kell employees had to take responsibility for their own welfare in that sort of crisis. She figured that they were more likely to come to work if their families weren't scrambling to find food, water and other necessities.
In an e-mail to employees in April, she recommended that they store at least two weeks of drinking water at home in case of an emergency. In another e-mail, she suggested types of food that they should stockpile. She also recommended that employees set aside medications, first-aid supplies and copies of important personal documents.
To date, the reaction from employees has been favorable, but Kelly wants to know whether they have acted on her advice. She said she plans to survey employees in April on the level of their participation in the preparedness effort.
Rather than dwell on the threat that a pandemic poses per se, Jo-Kell's chief executive officer cast her recommendations as steps to take for a hurricane or other emergency. "The concept of a pandemic," she conceded, "doesn't resonate with people. The reality of what could happen is too abstract."
Federal regulators have been monitoring industries considered essential to the economy and public safety, including banks, electric utilities and telecommunications providers, for their preparations.
Karen L. Cole, co-president of a Mechanicsville consulting firm that provides business-continuity and disaster-recovery advice, said large corporations have their own teams of planners working full-time on possible disruptions, including the threat of a pandemic. "They already have their plans in place," she said.
One of these is USAA, the financial services organization that has a call center and regional office in Norfolk. The organization, which provides auto and homeowners insurance to members of the military, their families and military retirees, started planning for a pandemic early last year, said Lynn McChristian, a spokeswoman. A team at USAA meets monthly to update the plan, she said.
Many smaller companies, however, have yet to address the impact that a pandemic could have on their employees and operations. In Hampton Roads, small businesses "are starting to get engaged, but it's slow," said Erin Sutton, an emergency planner at the Virginia Beach Department of Public Health. In February, a health department workshop on planning for disruptions from a pandemic attracted about 60 representatives from local businesses and nonprofit organizations. The $3,000 cost of the event was financed with money from the federal Department of Health and Human Services.
After several news reports in 2005 and 2006 about the threat of a flu pandemic, some business owners in the region expressed skepticism about the repeated warnings, Sutton said. They've insisted that "it's not going to happen this year."
The level of preparation that Kelly conducted at Jo-Kell is unusual. Among small business owners and managers in the region, "she's definitely in the minority," Sutton noted.
What prompted her to encourage preparations by employees, Kelly said, was concern about their welfare and a commitment to planning.
"We don't like things to creep up on us," she said at Jo-Kell's main office and warehouse in Greenbrier Industrial Park. The company also has facilities in Richmond and Jacksonville, Fla.
Kelly, who described her planning efforts at the Virginia Beach Department of Public Health workshop last month, urged business owners and managers to be financially prepared for a prolonged downturn in sales if a pandemic struck. But predicting the broad economic impact may be impossible, she said afterward.
"You can only do so much," Kelly said. "I don't know how you can plan for not having any commerce."
Because many companies could be hobbled by high rates of absenteeism, experts say managers must decide ahead of time which of their operations are essential and which can be shut down. Employers also must designate back up employees to make decisions in case managers are unavailable.
Some businesses will be especially vulnerable to a drop in sales because consumers probably won't risk exposure to the flu by congregating in public spaces or shopping for items that they don't need immediately.
"It's less likely that you'll buy that pair of jeans or get your hair done" during a pandemic, said consultant Cole, who previously worked on business continuity issues for the financial services company Capital One Financial Corp.
For small companies, preparation for a pandemic is crucial, said Cole, because they will have to work harder than their larger rivals. "A customer of a small business is likely to switch to a large company because they think that a larger one is better prepared to keep its doors open," she said.
Her message to business owners and managers is that they shouldn't concentrate on making money during a pandemic. Their focus, she said, has to be on keeping the doors open.
That could be a challenge for companies that maintain lean inventories and depend on frequent deliveries of raw materials or finished goods. Manufacturers, trucking companies and contractors will likely have their own problems with absent workers and be forced to scale back operations.
As part of its emergency plan, 30-year-old Jo-Kell distributed employees' home phone numbers, cell phone numbers and e-mail addresses as a way for them to stay in touch. Several employees, according to the company's disaster plan, would work from home via the Internet during a pandemic.
A surge in the number of people telecommuting during a pandemic, however, could strain parts of the nation's communications system. Schools, too, would turn to the Internet for instructing students at home, Sutton said. Whether the Internet would be overloaded by millions of additional people working from home "is an open, unanswered question," she said.
Cole, the consultant, said she was more optimistic about the capacity of the Internet. Any strains on the system, she said, probably would show up in metropolitan areas that have large concentrations of white-collar workers, who would be more likely to use computers for working at home.
However, businesses that expect their employees for the first time to work from home via the Internet can't assume that workers can learn to do it once an emergency strikes, Cole said. Employees, she said, have to be trained to do that well in advance.
Before Kelly began working on her employees' preparation for a pandemic, she sought support from Jo-Kell's managers. Without that backing, "I would have been spinning my wheels," the CEO said. And rather than dropping an entire emergency plan onto employees, she broke it into pieces that were distributed to them every two weeks.
Later this month the company will distribute to its workers a 14-page "Employee Disaster Preparedness Guide" that consolidates the advice in Kelly's messages.
Cole acknowledged that many small companies can gather the needed information on their own from government agency Web sites and other sources. However, small business owners sometimes feel overwhelmed when trying to plan for an emergency such as a pandemic.
"You've got to do it in manageable chunks," Cole suggested.
- Reach Tom Shean at (757) 446-2379 or tom.shean@pilotonline.com.