In spite of best intentions, protective measures, vigilance and forward planning, organisations are always at risk of losing their workplace because of fires, floods, extreme weather or structural collapse. Even if the fabric of the buildings remains intact, you can lose access because of contamination, lack of power or water or being within a police cordon following a terrorist incident.
Regardless of what caused the issue, the result is the same – the loss of a normal place of work. It may be for just a few hours in the case of a utility outage, or it may be for many months (even indefinitely) for more severe incidents. So, what does “losing your workplace” actually mean for an organisation, and what can businesses do about it?
The cost of workplace office loss
The true cost of losing a workplace office is always greater than the physical loss. It not only means that you can’t meet the physiological and security needs of your workers to enable them to do the work that you pay them, causing immediate operational disruption, but you can also no longer coordinate and manage their activity or meet their higher level needs, such as belonging, contributing and growing, and this can lead to lower morale and engagement.
Modern technology has, in most cases, allowed information to be disconnected from place and time, which means, with a little forward planning and investment, it is fairly straightforward to get the office occupants up and running at alternative locations, such as their own homes, a hotel, rented office or a purpose-built disaster-recovery facility.
However, research shows that if you fragment the workplace without paying attention to the management and coordination activity or the social and recognition needs of workers following an office disaster, the costs can be very high indeed.
When it comes to the costs of business disruption, the 2018 Allianz Global Claims Review reports that the average insurance claim for business interruption is more than $3m, almost 40 per cent higher than the average cost claimed for property damage. The same research also shows that the losses are now being driven by indirect impacts, such as loss of confidence in the organisation, loss of customers, fines, penalties and lawsuits – impacts that can only be mitigated by people in the disrupted organisation pulling together as a team.
Therefore, the threats that could prevent a workplace operating as it should can be physical, virtual or reputational – but all of these have financial implications. However, the largest losses are driven by the indirect impacts rather than the direct damage to property and operational disruption. Businesses need to re-think how they accommodate the workforce if they can’t access their office.
How to reduce the impact of a workplace office loss
The best option is to pick up the whole thing – people, information, management, personal knick-knacks, support structure etc – and transplant it somewhere else that is equally easy to get to and has the same feel and culture as the original. But we are operating in the real world and things are rarely that easy.
Good physical security and building resilience policies (such as ensuring you are not located on a flood plain and have more than one source of power and communications links to the building) are a good starting point.
The Business Continuity Institute’s Good Practice Guidelines offer four basic recommendations to help mitigate the immediate operational disruption of losing your workplace, which are worth every business considering:
There are a number of pitfalls to negotiate to get the most out of any of these strategies. For example, many organisations have a plan that includes relying on people being able to carry out their normal activities remotely from their homes. However, unless the organisation issues users with a second laptop that lives at their home, you cannot be sure they will be available when the incident happens. Many people are not at their desks when a crisis occurs, and most people do not take their laptops home each night. Also, do all users have sufficient and suitable space for working from home? Is it safe? The employer is still responsible for ensuring a safe working environment for staff even when they work from home.
Alternative workplaces can also be troublesome. Do they have the right connectivity? Is it secure? Who are you sharing the space with? Is it somewhere you would be happy holding client meetings?
Addressing more than just the immediate losses
Workplace offices are not simply warehouses that provide shelter and warmth to individuals who carry out their tasks autonomously. They provide a rich environment for interaction and innovation and enable efficiency by specialisation. They are designed so that the output of the whole is greater than the sum of the parts, and the mitigation of losses requires more than just providing alternative accommodation.
The risk environment that organisations operate in is now characterised by uncertainty and complexity. The magnitude and frequency of potential losses is therefore driven primarily by how they respond as a whole, rather than how they mitigate the immediate operational disruption of losing their premises.
Organisations that adopt a holistic stance and incorporate point business continuity solutions, such as workplace and IT disaster recovery, into a larger resilience strategy suffer fewer losses because they can address all aspects of the corporate culture. This can help to make the loss of a workplace a minor operational blip, as opposed to a full-blown disaster.
Dr Sandra Bell is head of resilience consulting, Sungard Availability Services
This article was first published in September 2019.