The current severe weather conditions have again brought home the importance of contingency planning for businesses – with some experts warning that such planning will become increasingly necessary as the UK experiences more extreme weather events as a result of climate change.
“The amount of snowfall has had a huge effect on some businesses, such as preventing people getting to work or stopping essential supplies and produce getting to their destinations,” said Business Link adviser, Mark Barber.
“It is times like these where the importance of contingency planning really comes to light.”
According to the Federation of Small Businesses (FSB), many of the problems small businesses in particular are facing, have been caused by the closure of thousands of schools across the country.
“Parents aren’t able to get to work because they have to stay at home to look after their children,” a spokesperson said.
“We have said that if 10 per cent of the workforce didn’t manage to get to work it would cost the economy £600 million a day – based on the fact that a bank holiday, when everything closes down, costs the economy £6 billion.”
In fact, figures from a snap poll on the British Chambers of Commerce (BCC) website released today show two-thirds of businesses reporting less than 10 per cent of their staff are absent from work.
Three-quarters of businesses said they had suffered some level of disruption as a result of the snow, however, with 65 per cent reporting at least some of their staff working from home.
“The impact of winter weather on businesses has varied around the country – with some areas far worse hit than others. Nationally though, businesses and their employees are responding with characteristic common sense,” said BCC director of policy and external affairs, Adam Marshall.
“Even though three-quarters of businesses say their activities are being disrupted, they are also reporting relatively few absences, and high numbers of staff working from home. Taken together, business flexibility and employee diligence will limit the economic impact of the latest cold snap.”
The FSB is also confident that most small businesses will have put contingency plans in place – having dealt with the prospect of a swine flu pandemic and a similar, though less extreme, cold snap last year.
“As we move through the week we hope that they [small businesses] will be looking at innovative ways they can get their staff working – whether that’s by working from home or finding new ways of getting to work,” said the FSB spokesperson.
The British Insurance Brokers’ Association is (BIBA) less confident about the preparedness of small businesses to deal with major incidents.
Although it didn’t question businesses specifically about dealing with the effects of heavy snow, research published by BIBA at the end of last month found that 45 per cent of businesses have no, or at very best, rough plans to deal with the effects of flood or storm damage.
This is despite the fact that flood claims cost £3 billion 2007 and 80 per cent of businesses affected by a major incident close down within 18 months.
It is BIBA’s belief that small businesses must have adequate plans in place to cover business resilience and it is concerned businesses are putting themselves at risk by failing to make such provision.
“The current weather situation is another case in point for a robust business continuity plan and it’s something businesses should do before events happen,” said technical services manager, Steve Foulsham.
At the very least, he said, businesses should make plans to enable at least some of their staff to work from home. They should also have contact numbers for employees – so they can check who can come into work and who can’t and provide staff with up-to-date weather reports.
Unlike flooding, disruption due to snow is not an insurable event as such (though there will undoubtedly be some business claims for things like burst pipes). But micro businesses and SMEs should still contact their insurance brokers to talk about developing a business continuity plan, said Foulsham.
“It’s all about giving out the right message to customers and suppliers,” he suggested. “Once a customer gets some indication that their preferred supplier is not able to continue to provide as per the contractual agreement, they will be looking to go elsewhere.”
Foulsham is one of those who believes there will be an increased incidence of business disruption as a result of extreme weather events caused by climate change.
“It would be prudent to assume that we are likely to get more extreme events than we have in the past, which makes planning for disaster or unusual events more important,” he said.
“I think it’s something that would worry insurers because, clearly, we have had several serious floods in recent years. We can all recall Boscastle, we can all recall the Hull and Sheffield floods of 2007, Cumbria in 2009. It seems to be happening with more frequency and I think there is a fair indication that that will continue.”
A Met Office spokesperson was a little more equivocal, saying that some extreme weather events (such as heatwaves), will increase in frequency, while others (like the coldness of a cold winter) will, despite the current weather conditions, decrease.
Although there is no current consensus on changes in the number of storms for the UK, the Met Office view is that intense rainfall events are likely to become more frequent as warm air holds more moisture.
Despite such uncertainties, the Met Office spokesperson agreed about the importance of planning, saying:“In terms of weather risk management, there is much that can be done to improve our businesses' and communities' resilience.
“Understanding a business's current vulnerabilities – be it from operations or getting staff to work – is an excellent first step. Risk management tends to be highly specific to individual businesses and locations; but has a wider benefit to local communities as a whole.”
Business Link has urged businesses concerned about the possible impact of the recent snowfall to visit its website (
www.businesslink.gov.uk/crisismanagement) for help and advice on contingency planning.