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10 Ways COVID Has Impacted Risk Management for Companies
Looking back on the past two years, there’s no doubt business leaders probably would have done a few things differently at every stage of the pandemic. The reality of the COVID-19 virus is that — from an economic perspective and otherwise — nobody saw it coming. That means we didn’t have processes in place for how to handle its impact on any aspect of business. But hindsight is 20-20, so to speak, and we’ve all learned a whole lot from this devastating virus.
Since the pandemic began, the economy has taken a significant hit. According to research from The Brookings Institution, there was a sharp decline in consumer spending because of the virus, and small business revenue dropped 20 percent. At the same time, companies faced huge workforce shortages, and the number of people not working quadrupled. All these changes led to one major conclusion for economic analysts — predictions are nice and all, but everything can change in the blink of an eye. Here are some ways strategic planning and risk management strategies have changed due to the pandemic.
Ten Ways COVID Has Impacted Risk Management for Companies
Employee Health Is a Bigger Risk Factor Than Ever Due to COVID
There’s no denying the fact that COVID has affected the entire production chain from the bottom up. Whereas out-of-date risk management strategies focused on factors such as the global economy or operations, they now center more around people. And you don’t need an economics degree to understand why. With workers home sick, production gets delayed or stops altogether. That means worker health and safety is one of the most important aspects of mitigating risk. Now, as leaders sink millions into the many rapid COVID tests for sale and encourage workers to get vaccinated, ways to prevent this risk are coming into clear focus. Some things you can do to make your risk management and strategic planning more people-centric include:
- Testing Workers Regularly –Make sure your operation is protected by investing in regular on-site or at home COVID testing. The AccessBio CareStart™ COVID-19 Antigen Test is a popular pick for employers because it offers fast, efficient results. This is critical to in-person operations.
- Offering Reprisal–Free Sick Days – Remember that, in this economy, sick employees are a greater threat to your business than being short-staffed. You simply cannot risk one worker getting the entire team sick, so you need to re-evaluate your sick policy. The Center for Disease Control and Prevention (CDC) explicitly states that companies should “develop policies that encourage employees to stay home without fear of reprisals.”
- Staying Stocked on PPE – Your business could be held liable if it doesn’t do what it needs to do to keep workers safe from catching COVID. Make sure to never run out of your stock of hand sanitizer, face masks, nitrile gloves and other personal protective equipment (PPE) to help prevent the virus from spreading throughout your facility or office.
- Implementing a Public Health Board – Ultimately, decisions regarding health and safety need to come from leadership, not individual managers or even directors. Some companies have begun implementing medical advisory or public health boards to help make key decisions with regards to a company’s health policies.
Remote Work Can Mitigate Risk of COVID
The second most important thing companies learned during the massive COVID impact? Remote work is no longer an option. Companies that can conduct work virtually must be set up to do so or they risk disruptions in service, supply and, ultimately, profit. In practice, this means that we can no longer lag in adapting the latest technologies, and we must stay ready for virtual work across as many departments as possible. Here are some things that companies are doing to account for this shift in thinking:
- Phasing Out Hard Copies – Virtual storage is the way of the future, and companies must adapt enterprise-level cloud solutions in order to prevent disruptions that could lead to losses. Businesses should now have reliable web-based storage and apps to facilitate work from anywhere.
- Investing in Cybersecurity – With individuals getting work done from everywhere, the security risk is heightened. And this is a massive consideration for those looking to mitigate risk since the average cost of a data breach is nearly $4 million. COVID has spurred many smart leaders to prioritize ways to secure data when workers are dispersed. They have also begun updating boards and C-suites with leaders who take cybersecurity seriously.
- Keeping Remote Workers Productive – By doing simple things like setting up workers with high-quality hardware and sending each employee a work-from-home kit, leadership can avoid disruptions in service. Encouraging your team to have an efficient, comfortable home workspace is critical.
The Supply Chain Is Vulnerable
The breaks within the supply chain during COVID account for a big portion of profits lost, and companies are left scrambling. Disruptions in transport, logistics, manufacturing and beyond caused supply chains to slow or halt altogether, which has made global business uniquely challenging. A shifted focus on supply chain risk management will be the way of the future to help prevent massive losses in profits as well as shutdowns.
- Identifying Alternate Sources of Supply –Relying on a single supplier is not the best move in a pandemic-vulnerable economy. Keeping some alternate sources of supplies in your back pocket can help mitigate risk.
- Investing More in Visibility – One of the biggest supply chain issues to affect businesses during the COVID-19 pandemic was a lack of visibility. Understanding the importance of inbound materials visibility and improving communication with suppliers can help companies lower risk in the future.
- Keeping the Supply Chain Agile – Production scheduling, suppliers and other strategies should always be seen as agile entities that can and should change as supply and demand fluctuates. We can expect to see many more companies investing in agile approaches to keep their organizations hyper-responsive to changes in the supply chain and market.
Agility Is the Bottom Line when dealing with COVID
Though these changes vary widely in terms of purpose and implementation, they all share one thing in common — they hinge upon adaptability. Today’s strategic planning and risk management processes must focus on the ability to make smooth, responsive adjustments as needed. That way, companies won’t face so much risk if they’re ill-prepared for an unforeseen disruption as influential as COVID.