Swine flu: preparing for the worst

The prospect of swine flu affecting half a firm’s workforce was, arguably, derisory a few months ago, but, with an autumn increase in cases looming, accountancy firms now have to consider the very real possibility of such a scenario occurring, as the pandemic spreads more rapidly.

Ministers and business advisers have urged employers to ensure they have a contingency plan in place as more deaths mount up, while public health officials say research shows that the virus is more dangerous than seasonal flu.

People are an accountancy firm’s most valued asset, so the pandemic could have disastrous consequences for the sector. All of the largest firms say they have a contingency plan in place, but none will provide details as to how, if needed, they will manage if half of their workforce is forced to stay at home through illness. Almost half of all UK-based staff at the largest firms are located in London where the pandemic is at its worst.

As a rough working guide, the government advises that organisations employing large numbers of people should make sure that their plans are capable of handling staff absence rates of up to 15% over the two to three week peak of a pandemic. The advice is in addition to usual absenteeism levels.

But, larger organisations with small critical teams, a category that the Big Four fall into, should plan for a level of absence rising to 30% at peak, ministers say. Firms will also have to factor in and plan for the impact on their businesses of parent-worker absences in the event of school closures.

Firms are reporting business as usual at present with low numbers of cases of swine flu among staff, although UK cases recently hit 100,000 diagnosed a week. They are also relying on remote working set-ups for staff to steer them through the pandemic.

PwC says it has a plan in place that can be scaled up in response to the breadth of the outbreak. ‘We have contingency plans in place to enable our client teams to work remotely with their laptops from home or other locations and use conference calls to replace face-to-face meetings, for example.’

If, as health professionals predict, the virus is stronger than previously anticipated, staff might not be able to work, even from home.

Dr Alan Hay, director of the London-based World Influenza Centre, said that the outbreak across the UK had not followed expected patterns and warned the Department of Health to be ready for a more deadly form of the disease.

BDO Stoy Hayward are asking staff to stay at home for seven days if they have come into contact with anyone who has the virus.

But firms don’t just have to contend with their own planning to ensure their businesses can operate during the pandemic.

BDO says: ‘We believe that one of the biggest problems could actually be the metropolitan transport system ­ meaning that our staff would not be able to get into work.’

As for the impact on global recovery, in July the World Trade Organisation said: ‘A worsening of the… flu pandemic could also create further downside risk to global economic recovery.’

According to the WHO we are in phase five to six, where, ‘the pandemic phase, is characterised by community level outbreaks in at least one other country in a different WHO region.... Designation of this phase will indicate that a global pandemic is under way.’

Even if the firms manage to avoid largescale absences, employment lawyers warn they will have to consider the legal issues of moving people without notice onto different jobs or offices. Issues around people working for sustained periods covering other job functions or for a senior colleague for a prolonged period, and whether it should involve a pay rise, are all matters that will have to be covered in contingency planning.

As for client work, there are questions over whether firms have a service disruption clause in their client contracts.

James Wilders, partner in the employment team at law firm Dickinson Dees, says: ‘This will vary from firm to firm. There are only so many contingencies which a given contract can contemplate. There may well be service disruption clauses in some contracts, but I would expect that frequently there won’t be. Now is probably the time for professional services firms to review their contracts to incorporate such clauses if they feel that there is a risk going forward.’

With firms already suffering in terms of revenue and profitability due to the economic downturn, any operational downtime could prove catastrophic to future recovery plans.
One thing is clear: those with an open mind and flexible planning will prove to be the most robust should the dire scenario government and health professionals are forecasting does ensue across the UK.