What is contingency planning? How emergency preparedness can save your business
What is a business continuity plan? SAP’s global HR value advisor, Chiara Bersano, has a unique perspective on the question. In 1999, she was working for a global company that operated a factory in Izmir, Turkey, when a devastating earthquake ultimately left more than 17,000 dead and 250,000 homeless. Her company’s employees, however, fared better than most.
The company reacted quickly, supporting and helping workers and their families through difficult conditions. This secured long-term trust and loyalty between the company and its workers. But it also prompted an early interest in contingency planning at a time when technology to support such an effort paled in comparison to today’s capabilities. Nevertheless, two decades later many of those employees still work at that company – not only for the better pay or the promise of career growth, but because they know the company has their backs in a time of crisis.
So, what is contingency planning? If you ask Bersano, it’s creating an emergency-response framework that results in retaining a healthy, motivated, dedicated workforce during and after crises.
“The power of relationship building from a crisis is extreme,” Bersano says. “It’s building a relationship based on trust with the employees.”
Put simply: investing in employees’ health and safety through diligent emergency planning results first in resiliency, agility, and business continuity – and later in better business outcomes. But more holistically, contingency planning is key to the survival of any business, local or global, in the short and long terms.
Perception as much as preparation
While there are countless other contingency plan examples beyond Bersano’s, the full definition of a business continuity plan in terms of the HR function is being ready to shift and align people and resources in response to any unfortunate event so the company can resume operations in part or in full as quickly as possible.
That begs the following question: as news of the COVID-19 pandemic began to spread in Q4 of 2019, how could better contingency plans have helped companies and countries alike back then, and how can such plans help them now? To answer the second part of the question, companies have more to gain the sooner they create a contingency plan focused on preserving business continuity. In fact, it’s something that HR organizations should be doing all the time as part of the job, no matter the macroeconomic or business-specific conditions.
Hindsight 2020: How contingency plans might have helped at the start of COVID-19
E-commerce companies that had plans in place to hire quickly for sourcing and fulfillment roles were well prepared. And service organizations that had already armed employees with laptops and up-to-date collaboration software were able to transition quickly and smoothly to a remote way of working. Generally speaking, the more future-ready and tech-enabled the business, the better equipped it was – either intentionally or by accident – to hold business steady as the pandemic set in.
But contingency planning is about much more than making sure every employee has a laptop and a fast internet connection. It’s about shifting resources or even entire departments to focus on immediate business needs, managing the external perception of the company, and truly addressing what employees want and need to be successful. If you think those sound like three things that need to be managed in normal times, you are correct. How effectively HR has prepared will make all the difference in just how much business is impacted, if it is at all.
That’s why, even after the COVID-19 pandemic subsides, constant and consistent contingency planning should be the new norm for HR professionals. If contingency planning is an always-on aspect of the HR function, it has the power to drive the business for the better.
Walk the talk
As much as a workplace emergency action plan is about strategizing on scales large and small, the depth and efficacy of any contingency plan is, at its core, a reflection of the company’s values. Sure, every company Website has roughly the same set of ideals expressing a customer-first mindset and placing employee health and safety above all else. But actions speak much louder than copy-pasted words.
That’s where contingency planning aligns with business objectives. HR professionals must consider both business-specific scenarios as well as macroeconomic factors that impact everyone in the organization, and then approach these in light of the different types of emergencies and priorities that can arise. A company’s most valuable asset is its employees, and taking care of them is a moral and legal obligation. If the CEO and CHRO agree that workers’ health and safety are of paramount importance in good and challenging times alike, customer satisfaction and financial success are sure to follow – even in the thick of a crisis that threatens to upend every aspect of the business.
Contingency planning strategies must be comprehensive in nature and take into account a wide array of responsive actions that, even under normal circumstances, would be challenging to implement all at once. But that’s also why emergency preparedness and contingency planning are so important – response time is of the essence in any crisis. The right plan won’t matter if it comes too late.
Given what the world has experienced in 2020 and how many organizations and entire industries have been impacted, HR professionals should be asking themselves now: how can we be prepared in the best possible manner for tomorrow, next month, and next year alike?
Explore SAP SuccessFactors HXM Suite
Access resources to help you manage your business in times of crisis.
More in this series
SAP Insights Newsletter
Gain key insights by subscribing to our newsletter.