Organizations Step Up Pandemic Plans, Fear Disruptions

10/22/2009 By Steve Bates




U.S.-based and multinational organizations are taking steps to prepare for an H1N1 pandemic amid increasing fears that the virus will hurt their operations, according to a new Society for Human Resource Management (SHRM) poll.

The poll report, The H1N1 Virus—How Prepared Is Your Workplace, compares the status of preparations among organizations in September 2009 with May 2009. Companies continue to be concerned about the virus, also known as swine flu, but their plans have shifted since the spring.

In May 2009, only 40 percent of organizations polled said they expected that the illness would have a moderate negative impact on them, while 57 percent said it would have no negative impact. In September 2009, however, 64 percent of respondents said the pandemic will have a moderate negative impact on their operations, while only 33 percent predicted that they will be spared negative impact. In each survey period, 3 percent expected a large negative impact on operations.

Small organizations (47 percent of those polled) are more likely than mid-sized (27 percent) and large ones (31 percent) to report that a pandemic will have no negative impact on their overall business operations. Mid-sized firms (71 percent of respondents) are more likely than small companies (52 percent) to forecast a moderate negative impact on operations.



From May to September 2009, the percentage of organizations reporting that they had a disaster preparedness plan for a major H1N1 virus outbreak declined slightly. Publicly owned for-profit and nonprofit organizations are more likely than privately owned for-profit organizations to have such a plan. Large companies are more likely than small ones to have a flu disaster plan.

The latest SHRM H1N1 poll, released Oct. 19, 2009, was fielded Sept. 15-28, 2009, building on similar questions asked of a randomly selected sample of SHRM members in May 2009.

Most companies that SHRM polled in September 2009 are not changing their paid leave policies during the flu season. Thirty-nine percent have modified their policies or plan to modify their policies to require a medical statement that an employee who has been sick can return to work. Twenty-seven percent of respondents have changed or plan to change their leave policies to accommodate persons in high-risk groups for H1N1 complications, such as pregnant women.

The new poll found that many organizations are planning to offer H1N1 vaccine to their employees, though the details vary significantly:

39 percent will offer it free to employees.
18 percent will offer it but will charge employees.
15 percent will offer vaccine to family members of employees, but employees will have to pay for it.
7 percent will offer it free to family members of employees.
7 percent will offer vaccine free only to at-risk employees.
6 percent will provide vaccine only to at-risk employees, and employees will have to pay for it.
Educating employees on flu prevention measures is the top strategy HR professionals are using to reduce the spread of the H1N1 virus in the workplace, with 89 percent of organizations providing such education. The next most common strategy is monitoring the situation by following guidance from governmental agencies and other organizations, used by 84 percent of SHRM poll respondents. An equal number are making available hand sanitizer, other disinfectants, masks and other flu prevention tools.

Three-fourths of companies say they have developed an employee communication strategy related to the virus. Almost that many organizations say they have informed employees not to come to work if they have flu and cold-like symptoms. More than 70 percent are disinfecting common areas of the workplace frequently.

Strategies that have not yet been implemented but are planned by organizations include:

Sending home those employees who come to work with flu and cold-like symptoms, planned by half of organizations polled.
Setting up telecommuting options for employees if there is an H1N1 virus outbreak in the employer’s area or region; 32 percent.
Informing employees not to come to work if they have flu and cold-like symptoms; 23 percent.
Securing anti-viral flu medication (e.g., Tamiflu) for employees (e.g., working with health care providers to ensure adequate medication supplies for employees); 16 percent.
-----------------------------------------------------------------------
Most companies are not changing
their paid leave policies
during the flu season.
-----------------------------------------------------------------------

Organizations responding to the SHRM poll have made a variety of changes regarding employee travel since May 2009. More have implemented alternatives to business travel, such as use of video or audio conferencing. And more are restricting nonessential business travel in general. However, fewer companies say they are restricting employee business travel to and from regions where the H1N1 virus is confirmed; fewer are limiting business visitors from virus-affected regions; and fewer are curtailing product shipments to or from affected regions in the United States or elsewhere.

The proportion of organizations securing antiviral flu medication such as Tamiflu for employees dropped significantly from May 2009 to September 2009, from 52 percent of those polled to 25 percent.

Modest Hiring Gains for Manufacturing, Services Expected in October

The U.S. job market should offer increased opportunities for workers in the manufacturing and service sectors in October 2009, according to the Society for Human Resource Management’s (SHRM) Leading Indicators of National Employment (LINE) survey report for October 2009.

Though hiring was down in September 2009 compared with September 2008, the latest LINE report marks the fourth straight month that job additions will outpace layoffs in both the manufacturing and service sectors. September 2009 vacancies increased from September 2008 in three out of four job categories for manufacturing and services.

“Though the labor market remains weak, the pace of layoffs does appear to have slowed, and job seekers may find increased opportunities in both the manufacturing and service sectors in October,” said Jennifer Schramm, manager, SHRM workplace trends and forecasting. “Exempt job vacancies rose in both sectors and in nonexempt service-sector jobs, another indication that labor market conditions might be improving slightly.”

Employment Expectations	Manufacturing	Service
Hiring will surpass layoffs in October 2009 in both the manufacturing and service sectors.	-2.5	-6.4
Recruiting Difficulty
Both sectors reported little difficulty in finding top-level talent in September 2009.	-9.9	-10.1
New-Hire Compensation
Wages and benefits packages in both sectors rose at the slowest rate in five years during September 2009.	-6.9	-4.9

Source: SHRM Leading Indicators of National Employment (LINE), www.shrm.org/line.

The LINE employment report examines four key areas: employers’ hiring expectations, new-hire compensation, difficulty in recruiting top-level talent and job vacancies. It is based on a monthly survey of private-sector human resource professionals at more than 500 manufacturing and 500 service-sector companies. These sectors employ more than 90 percent of the nation’s private-sector workers.

Employment, Vacancy Expectations

The LINE employment expectations index provides an early indication of the U.S. Bureau of Labor Statistics (BLS) numbers. The index has tracked in lockstep with national economic patterns since the recession began in December 2007. The last time the year-over-year change in this index was positive was November 2007. That will not change in October 2009, but for the fourth month in a row, more employers in the manufacturing and service sectors will add jobs rather than conduct layoffs.

In the manufacturing sector, a net total of 17.9 percent of respondents reported they will add jobs in October 2009 (33.3 percent will add jobs, 15.4 percent will eliminate jobs). That represents the highest net gain in hiring for manufacturing since October 2008. In the service sector, a net total of 13.4 percent of companies will add jobs in October 2009, the sixth straight month that the hiring rate will surpass the layoff rate in that sector.

LINE data cover exempt vacancies, or primarily salaried positions, and nonexempt vacancies, which are mostly hourly employees. Changes in the number of job vacancies can be one of the earliest indicators of a shift in the balance between labor supply and demand.

Vacancies, or open positions that employers are trying to fill, for salaried jobs inched up in both sectors in September 2009, according to the LINE report. In the manufacturing sector, a net total of 10.7 percent of respondents reported increases in exempt vacancies in September 2009 (19.3 percent reported increases, 8.6 percent reported decreases). This is an increase of 2.8 percent from September 2008, and the second consecutive month that exempt vacancies have increased from the previous year.

In the service sector, a net total of 0.4 percent of respondents reported increases in exempt vacancies in September 2009 (10.9 percent reported increases, 10.5 percent reported decreases). For the service sector, this is the second consecutive month that exempt vacancies have risen from the previous year.

-----------------------------------------------------------------------
‘Many organizations may hold off on adding
to overall head count while they try
to gauge the strength of the economy.’

Jennifer Schramm, manager, SHRM workplace trends and forecasting
-----------------------------------------------------------------------

Vacancies for nonexempt positions—or hourly jobs—also increased in the service sector in September 2009; however, they decreased in the manufacturing sector.

For nonexempt service positions, a net total of 6.9 percent reported increased vacancies in September 2009 (24.3 percent increased, 17.4 percent decreased). This marked a small jump from September 2008, when a net total of 0.8 percent of service companies reported increases in nonexempt vacancies.

A net total of 8.7 percent of manufacturing respondents reported that nonexempt vacancies increased in September (20.5 percent increased, 11.8 percent decreased). This is a net decline from September 2008, but the fact that more manufacturers had increased vacancies during the month suggests that work is being ramped up slowly at some companies.

In addition, the Federal Reserve reported that industrial production increased for the second straight month in August 2009.

“It is too soon to tell when demand might pick up,” said Schramm. “Many organizations may hold off on adding to overall head count while they try to gauge the strength of the economy. Instead they may try to make up for lost revenue by boosting the productivity of their existing staff or by taking on temporary workers.”

Recruiting Difficulty, New-Hire Compensation

Should companies choose to hire, however, there is skilled talent to be had. Both sectors reported little difficulty in landing top-level talent in September 2009, although the rate of increase in new-hire compensation falls behind the previous year for the 12th straight month.

LINE’s recruiting difficulty index measures how difficult it is for firms to recruit candidates to fill the positions of greatest strategic importance to their companies. For the seventh consecutive month, LINE recorded single-digit response levels for those reporting increased difficulty with recruiting in September 2009. The low response totals can likely be attributed to fewer HR professionals engaged in recruiting during the economic downturn. And with an increased number of people looking for work, HR professionals can afford to be selective.

In the manufacturing sector, a net of 10.8 percent of companies reported less difficulty with recruiting in September 2009 (3.2 percent had more difficulty, 14.0 percent had less). In the service sector, a net of 7.3 percent of companies had less difficulty recruiting (9.8 percent had more difficulty, 17.1 percent had less).

With millions of people already seeking work and many others expected to resume their job searches as the economy improves, this trend in the LINE recruiting difficulty index is not likely to reverse soon.

The rate of increase for new-hire compensation has been falling for a year as some companies have been reducing the wages and benefits they are offering new hires in an effort to control costs. For the 12th straight month, increases in wages and benefits packages in September 2009 will fall behind totals from the previous year.

In the manufacturing sector, a net total of 0.3 percent of respondents said they would decrease new-hire compensation in September 2009 (3.2 percent increased, 3.5 percent decreased). That is the lowest September response total in five years for manufacturers reporting increases to new-hire compensation.

But in the service sector, more companies raised new-hire compensation rather than reduced it in September 2009. A net total of 5.6 percent of companies increased wages and benefits packages for new hires (6.9 percent increased, 1.3 percent decreased).

Still, this was a drop of 4.9 percent from September 2008, when a net total of 10.5 percent of service companies increased new-hire compensation.

“Recruiting difficulty and new-hire compensation rates remain down, indicating that this is still a very tough market for job seekers,” said Schramm.