The role of human resources professionals in crisis management planning has evolved from a purely administrative function to a strategic and indispensable component of an organization’s resilience and ability to recover. HR professionals play a vital role in strategic workforce planning, crisis communication, business continuity, talent management, legal compliance, training, data analysis, ethical leadership and more.
For business owners, managers or leaders, it’s imperative to recognize the significance of HR’s role in the crisis management process and invest in human resources capabilities accordingly. A well-prepared HR department can help an organization navigate the unexpected and maintain continuity and stability in even the most challenging times.
Crises are Inevitable
Crises are inevitable, but with effective HR leadership, the organization can emerge stronger and more resilient than ever. In this article, we will consider the types of crises that can impact any organization, why the involvement of HR is essential to successful crisis management training and how HR professionals can prepare a resilient workforce that’s capable of guiding the business through a crisis.
The Importance of HR in the Crisis Management Process
Crisis management efforts have transformed from being solely reactive to becoming a proactive and strategic discipline. Gone are the days when companies could afford to wait for a crisis to occur before taking action. In today’s interconnected world, where information travels at the speed of light, organizations must be prepared to respond swiftly and effectively to crises that can damage their reputation, disrupt operations and affect their bottom line.
This shift in crisis management planning has given HR professionals a central role in the crisis management process. They are responsible for ensuring that an organization’s most valuable assets—its people—are prepared to respond to the unexpected, adapt to changing circumstances, contribute to response and recovery and maintain business continuity.
Strategic Workforce Planning
Strategic workforce planning is a critical aspect of effective crisis management. HR professionals collaborate with other departments to develop and test continuity plans that address various scenarios. This includes identifying alternative work arrangements, evaluating remote work capabilities and implementing measures to ensure the organization’s core functions will continue despite disruptions.
The role of HR in strategic workforce planning also includes ensuring that employees are trained to know their jobs and how to use alternate tools and technology as necessary for remote work. This preparedness ensures that the organization can maintain its operations even when physical offices are inaccessible.
Now, let’s explore some of the unexpected events which can cause a business crisis. We will define the role of HR in the development of a crisis management plan and consider how the crisis management process is complementary with less immediate goals of business continuity.
The Origin of a Business Crisis
Although businesses can insure against known risks such as fires or storms, an existential business crisis can arrive from a totally unexpected direction. Who could have foreseen the COVID-19 pandemic and its global impact? A business crisis can be precipitated by a natural disaster, an industrial accident, a management shakeup or a wide variety of other disruptive events, none of which were foreseen before the crisis occurred.
Here are some examples of events that could result in an existential business crisis.
- Bankruptcy – Insolvency has many causes; a common result is a business crisis.
- Cyberattack – Hackers can cause millions in losses and can even shut down businesses that aren’t protected.
- Confrontation – A takeover, merger or a struggle for management control can bring a crisis.
- Disgruntled Employee – Many acts of theft or data breach happen after a termination.
- Employee Misconduct – Money, property or reputation can be lost by accident or intent.
- Environmental Issues – Deepwater Horizon cost BP $1.7 billion, along with the damage to its brand reputation.
- Financial Crisis – The stock market crash in 1929, the 1973 oil crisis and the global recession of 2008 are just a few examples of financial crises that impacted businesses.
- Lost Sales – Multiple episodes of food poisoning in 2018 caused Chipotle’s sales to collapse.
- Natural Disaster – Widespread forest fires, earthquakes, hurricanes, tornadoes and floods all have the potential to create a business crisis.
- Product Recall – The 1982 Chicago Tylenol murders nearly destroyed a brand that had been trusted by the general public.
- Production Accident – The Bhopal disaster, a chemical accident at the Union Carbide pesticide plant in Bhopal, India, injured over 550,000 people and killed an estimated 15,000.
- Supply Chain Disruption – COVID-19 caused prolonged shortages across global markets.
- Technology – Digital photography quickly rendered film and film development obsolete.
- Conflict – Russia’s invasion of Ukraine has caused a global crisis in oil and grain markets.
The Role of HR in Crisis Management: Before, During and After a Crisis
Before a crisis occurs, HR can work with senior management to develop and maintain the strategic workforce planning element of an effective crisis management plan. HR is also responsible for crisis management training, which includes standard operating procedures, quality control, worker safety and risk management.
HR can help the organization envision the human resource actions required to withstand and recover from various crisis scenarios. For example, how would HR help senior management align the workforce to survive earthquake damage, a data breach or another pandemic? How can the talent acquisition and succession plan ensure the continuity of the business through workforce strategy?
During a crisis, HR is the primary communication conduit between the workforce and senior management. When procedures change, HR is the focus of employee training and the development of new policies. When the workforce must be increased or downsized, HR is the guide for legal compliance in hiring and termination.
During and after a crisis, HR is responsible for employee relations, including mental health support and employee well-being. As the business recovers, HR is essential to workforce planning and adaptation to the new conditions following the crisis.
Crisis Management and Strategic Workforce Planning
Effective crisis management begins with strategic workforce planning. HR professionals must work closely with top management to identify potential risks and develop plans to mitigate them. This includes assessing the impact of various crises on the workforce, such as natural disasters, cyberattacks, economic downturns or public health emergencies.
A crucial aspect of strategic workforce planning is identifying critical roles within the organization and ensuring that they are adequately staffed and trained for an actual crisis. Cross-training employees for key positions can mitigate disruptions and enable the organization to respond more effectively to crises.
Developing Team Resilience to Navigate a Crisis
Organizations that have taken the time to develop the quality of resilience as a characteristic of their workforce are more likely to successfully navigate a crisis than those organizations that have made no effort to train their employees to be flexible, tenacious and creative problem-solvers.
Resilience is fostered by open communication and transparency, which empower employees with clear performance goals and the freedom to make some decisions on their own. Companies that encourage innovation and creativity are training their employees to be more flexible and more agile, qualities that might save the organization in a time of crisis.
Crisis Management Employee Training and Development
Preparation is the key to resilience in times of crisis. HR plays a crucial role in developing and delivering training programs that can equip employees with the skills and knowledge needed to respond effectively to various crises. This may include training on emergency evacuation procedures, first aid, firefighting, crisis communication, and remote work best practices.
Furthermore, HR should foster a culture of continuous learning and adaptability. Encouraging employees to upskill and cross-train can enhance their resilience and make the organization more adaptable in the face of unexpected challenges.
The Role of HR in Crisis Management Communication
In times of crisis, effective communication is paramount. HR plays a central role in developing and implementing crisis communication plans that ensure employees are well-informed and feel supported. Clear and transparent communication can help reduce anxiety and confusion among employees.
HR must also provide secure avenues for employees to voice their concerns and seek assistance. This could include setting up helplines, establishing employee assistance programs (EAPs) and offering mental health support during and after a crisis. Ensuring the well-being of employees is not only ethically sound but also essential for maintaining high productivity and morale.
Crisis Management, Employee Engagement and Talent Retention
During and after a crisis, organizations may experience dynamic workforce fluctuations. HR must be ready to pivot and adapt to changing talent needs. This may involve reevaluating recruitment strategies, conducting layoffs or furloughs and planning for the eventual rehiring of employees when conditions improve.
Moreover, HR should have a well-developed strategy for retaining and engaging valuable talent. Employees who feel supported during difficult times are more likely to remain loyal to the organization. HR can implement retention and engagement strategies such as flexible work arrangements, professional development opportunities and recognition programs to keep employees engaged and motivated.
Remote Work Management During a Crisis
When a crisis causes damage or disruption at the main offices of an organization, the crisis management plan often includes a shift to remote work. While many companies employ or even prefer remote work, others have decided to reverse this trend and bring employees back together in the main office.
Whether or not a company prefers remote work under normal conditions, the ability to resume the flow of productive work from employee homes is a valuable form of crisis management. The HR team is uniquely well-positioned to plan and execute a remote work plan, as they manage all information regarding employee locations, contact details and job descriptions.
Remote workers could be at risk of developing depression and may struggle to retain their sense of belonging and commitment to a team. HR can support these workers with group activities, buddy check-ins, mental health counseling and other services to support employee engagement and well-being in times of crisis.
The Role of HR in Protecting the Workforce
In an existential business crisis, senior management must focus on protecting and preserving the life of the business, starting with the buildings, equipment, inventory and other physical assets. The responsibility of HR is to protect and preserve human assets until normal business operations can be resumed.
Prior to a crisis event, HR needs to take proactive steps to develop the appropriate workforce response to various crisis scenarios. HR should also train employees to be ready for a crisis, with procedures for safety, first aid and other important components of a crisis response. HR will prepare crisis response plans that recommend which employees should be furloughed and which key players should remain, along with a crisis response playbook that allows all employees to quickly access standard operating procedures, emergency numbers and contact details of key personnel.
During a crisis, HR will stay in communication with active and furloughed employees, providing news and updates from senior management, as well as the outlook for recovery and rehiring. Although the company cannot commence operations and pay employees for work hours, the HR team can stay in contact, supporting the team with counseling, company resources and contact with social services.
Data-Driven Decision-Making in Crisis Management
Data-driven decision-making is essential for effective crisis management. HR professionals can leverage HR analytics and data to identify trends, assess the impact of crises on the workforce and make informed decisions. For example, data can help HR predict employee turnover, monitor absenteeism rates during a crisis and assess the effectiveness of remote work arrangements.
Using data to inform crisis management strategies allows HR to allocate resources effectively, identify areas for improvement and measure the success of crisis response initiatives.
HR Analytics in Crisis Management
HR analytics can support crisis management by anticipating potential issues, optimizing processes and reducing costs. When senior management needs to make decisions affecting the workforce, HR analytics can provide the data needed to make the right choices.
HR analytics can also identify skill gaps, redesign job roles and manage upskilling programs to support the recovery of the business.
HR Technology for Crisis Management
As a business crisis is revealed in its full dimensions, one of the company’s most valuable crisis management tools is the human resources information system (HRIS). The human resource information system is a software application that, generally, is used to organize employee information and support various HR functions, such as payroll, timekeeping, benefits administration, recruiting and training.
The HRIS may also be the repository of company standards, policies and procedures, including crisis management plans, which can be accessed by all employees. In a business crisis, the HRIS may provide the backbone on which the company can communicate and collaborate with its workforce. The HRIS can also support critical functions during and after a crisis, such as recruitment, talent management, onboarding and compensation.
Crisis Management Software Tools
Large enterprises, mid-market companies and small businesses can get crisis management support with software packages designed to power emergency communication, team goals and collaboration. To qualify as emergency management software, these packages must create and store emergency plans for a variety of scenarios, gather data from inputs like weather systems, enable communication with first responders and provide post-emergency response analysis to improve future responses.
Here are a few examples of crisis management software tools and their functions, which are often industry-specific:
- D4H is a cloud-based application that supports emergency response management in government, public safety, oil and gas, aviation and health care organizations. Features are suitable for mid-market to small business users.
- Navigate360 specializes in crisis management for educational institutions, including school safety and student wellness programs. It helps handle compliance and staff communication, track required drills and training sessions, enable collaboration with first responders and identify gaps in emergency operations.
- Crises Control is a crisis communication tool that makes it easy to send emergency mass notifications to any number of recipients, allowing for quick response messaging with an audit trail.
- DisasterLAN is a web-based, mobile-friendly emergency management system that is designed for local government users. It provides tools for situational awareness, workflow-based information management and real-time communication.
- Konexus integrates emergency notification and crisis management in an easy-to-use mobile app, allowing organizations to securely send alerts, share text messages, send emails or make voice calls in real time.
Communication Strategies in Crisis Management
A recent article in the Harvard Business Review outlined five strategies for communicating with employees during a crisis. Here is a summary of their recommendations:
- Communicate frequently. A strong workforce can take a truthful dose of bad news, but silence from the leadership is likely to be taken as a signal to head for the exits. Nothing is more disconcerting than an information vacuum. HR should be the beacon of valid information.
- Provide safe channels for giving feedback. Crisis recovery requires facing the truth and working with a two-way flow of trusted information. HR is the best place to create a secure channel to blow a whistle, criticize management or otherwise speak truth to power.
- Help employees work at home effectively. When an on-site workforce is pushed out of the office, remote work procedures must sometimes be built from scratch. Consider the family situation of each worker. Provide usable technology. Help workers alleviate Zoom fatigue.
- Address concerns about job security. This is likely to be the number one concern for most employees, from team leaders to line workers. The crisis management plan should cover procedures for clearly and transparently advising all workers of the outlook for their positions.
- Provide a plan for the future. During the worst moments in a crisis, employees can remain resilient if they are able to commit to a solid recovery plan. Sharing the strategy, milestones and progress reports with all employees will pull the team together and strengthen their resolve.
The Role of HR in Maintaining Employee Morale
A crisis can become a disaster when furloughed employees depart the company in anger. Some may join the company’s toughest competitor. A few may feel justified in stealing customers or taking intellectual property. Others may take out their anger in the form of vandalism or theft of assets. The best way to avoid these outcomes is attention by the HR team to employee morale.
When it comes to boosting employee morale, the HR team can be the company’s most effective resource. Here are some of the strategies HR can recommend to boost morale in a crisis:
- Connect more often. A weekly status email to the entire workforce and weekly check-ins with remote workers is the absolute minimum. Consider a daily video meeting where the leadership team reports the previous day’s results and lays out the goals for the day or online group events designed to help employees connect with each other. This can provide proof that a worker belongs.
- Keep the paychecks coming. If the company can afford it, continuing paychecks even in the face of a crisis sends the most powerful message possible: the company is here for you and we need you to be here for us – now and when this is over.
- Keep the benefits in place. The financial impact of losing income can be made much worse by taking needed treatments or medications away at the worst possible moment. If pay cannot be continued during the crisis, consider keeping furloughed workers on health insurance and other benefits.
- Encourage work-life balance. This must happen before the arrival of a crisis. A healthy work-life balance fosters employee well-being and loyalty to the organization. It conveys to employees that the company values their contributions at work, but also understands that family and personal time are important.
- Enhance recognition programs. There are many ways to recognize efforts or accomplishments that are above and beyond what is required. A simple thank-you letter from the company president, a gift for the employee of the month or posting a worker’s name on a board of company heroes can all be effective ways to recognize employees. Recognition is a powerful morale booster, and in many cases, costs next to nothing. HR can administer recognition programs to ensure that rewards are effective and free of bias.
The Role of HR in Crisis Management Legal Compliance
In times of crisis, HR must navigate complex legal and regulatory landscapes. This includes ensuring that the organization complies with labor laws, safety regulations and employment contracts, even when faced with extraordinary circumstances.
Additionally, HR professionals should collaborate with legal counsel to assess and mitigate legal risks associated with crisis response, including potential liability issues. Staying informed about changing legal requirements and seeking expert guidance is essential to protect the organization from legal challenges. As previously noted, the primary focus of senior management in a crisis is protecting the business and restoring its operations. The organization must entrust to HR its duty of care to comply with local, state and federal laws and regulations regarding the conduct of the business toward its employees.
The first responsibility of the HR team is to protect the safety of all employees in dealing with the effects of a crisis. If a workforce reduction is necessary, HR must take care to ensure that layoffs are according to the necessity of job functions, without regard to gender, race, disability or other unlawful criteria.
Furloughed workers must receive their accrued pay and any amounts due from PTO credit. In some states, penalties for violating workers’ rights to accrued pay are severe, and company officers could even be held personally liable for violations. Workers leaving the company will need transitional help with their health insurance and other benefits, as well as any outsourcing or job referral services the company may provide.
In the case of a particularly traumatic crisis, such as those involving workplace violence or employee deaths, the HR team may support impacted workers with mental health or grief counseling services.
Looking forward, HR must meet the needs of workers whose skills are necessary to overcome the crisis, as well as those who must be furloughed until the crisis is over. In both cases, HR must observe applicable employment laws as they strive to retain and rebuild a workforce capable of restoring the operations of the business.
The Role of HR in Government Investigations
If there are workplace deaths in a crisis event, the company may be required to work with the Occupational Safety and Health Administration (OSHA) to investigate the event. The local police may have to investigate any incident involving violence.
In the event of an industrial accident, it may be necessary to work with the Environmental Protection Agency (EPA) or other federal, state and local authorities. Compliance is critical, as some agencies have the authority to impose heavy fines for non-compliance or, in more extreme cases, to bring criminal charges.
Ethical Leadership in Crisis Management
During times of crisis, employees look to leadership for guidance and reassurance. HR professionals should work closely with senior management to foster ethical leadership practices that build trust and credibility within the organization. This includes transparent decision-making, empathy and a commitment to employee well-being.
Building trust among employees is essential for their willingness to adapt to changes and follow organizational directives during a crisis. HR can facilitate leadership training and coaching to develop these crucial skills.
Creating a Crisis Management Team
The Society for Human Resource Management (SHRM) envisions the ideal crisis management team as having seven key roles:
- A team leader with the authority to make decisions for the organization;
- A security director with overall responsibility for the crisis management plan;
- A finance director to assess the financial implications of potential disaster scenarios and to arrange for the funds required to meet an emergency, oversee expenditures and control costs;
- A legal counselor to advise the team on the legal implications of team responses to the crisis;
- A media spokesperson so that the company speaks with one voice while maintaining legal confidentiality and brand considerations;
- A security specialist, usually from outside the organization, to advise the team on options for handling different types of crises; and
- The HR director to manage the many human issues that will arise before, during and after a business crisis.
Developing a Crisis Management Plan
If an organization does not have a crisis management plan, and if there are no industry-comparable plans to use as an example, a good first step in the development of a crisis management plan is the FEMA Emergency Planning Process.
Step 1: Form a Collaborative Planning Team
A crisis management planning team can be formed as recommended above by the Society for Human Resources Management (SHRM). The planning team can be expanded upon as needed with subject matter experts from operations, engineering, the workers’ union, community leaders and other stakeholder groups.
Step 2: Understand the Situation
Identify all potential threats and hazards and assess the level of risk. The question is not, “Do we think there will be a hurricane in this area?” but rather, “Has there ever been a hurricane in this area?”
Step 3: Determine Goals and Objectives
Determine operational priorities and use them to set goals and objectives. Senior leaders will understand that the first priority is not simply preserving revenue or profit, but rather preserving the life of the company.
Step 4: Developing the Crisis Management Plan
Develop and analyze practical courses of action for emergency events. Identify resources, such as crisis management software, existing published plans and collaboration with other local businesses.
Step 5: Plan Preparation, Review & Approval
Write the plan. The human resources department is likely the best team to author the plan. Review the plan with the cross-functional team. Approve the plan with senior management. Disseminate the plan.
Step 6: Plan Implementation and Maintenance
Exercise the plan for continuous improvement. Review, revise and maintain the plan each year.
Crisis Management and the Business Continuity Plan
While the crisis management plan is focused on effective response during a crisis event, an organization must also have a plan in place to sustain operations until the crisis is in the rearview mirror. The goal of business continuity planning is to identify the impact of potential risks and mitigate those risks through financial, operational and personnel planning.
As with the crisis management plan, the continuity plan is based on risk assessment. The objective is to envision potential risks and foresee the impact on business assets, operations, finances and reputation, as well as legal and contractual obligations. When the company is exposed to an unacceptable level of risk, the business continuity plan specifies the ways in which risks are to be managed, prevented or mitigated.
Continuous Improvement of the Crisis Management Plan
Neither a crisis management (CM) plan nor a business continuity (BC) plan can remain static. Elements of each plan must be practiced, tested and, as necessary, revised. For continuous improvement of the CM and BC plans, the crisis management team should regularly review the plan, update it with a current risk analysis, add contributions from outside advisors, including all employees in mock exercises and other training, and document plan improvements.
The Role of HR in Talent Management and Succession
In a crisis that causes a loss of team leaders or that requires the organization to dramatically downsize, HR will hold the keys to building a bridge back to the full capability of the organization, based on their knowledge of the top management, team leaders, key players and rank-and-file workers.
HR has access to the resumes, performance evaluations and work histories, all of which will provide the insights needed to determine which employees have the necessary skills or talent to switch roles in a crisis or to assume dual functions.
HR knows which junior workers have the potential to be prepared for future leadership, and they also know which workers have little interest in climbing the company ladder. In a situation where only the organization’s core capabilities can be retained, human resources management has the data to indicate which workers represent investments that should be kept close.
Crisis Management Plans for Strength and Resilience
The role of human resources in the crisis management process has evolved from a purely administrative function to a strategic and indispensable component of an organization’s resilience. HR professionals play a vital role in strategic workforce planning, crisis communication, business continuity, talent management, legal compliance, training, data analysis, ethical leadership and more. Crises are inevitable, but with effective HR leadership and a strong crisis management plan, an organization can emerge stronger and more resilient than ever.
Ready to navigate through crises with confidence? Take the first step towards a more resilient and prepared future for your organization. Learn more about Higginbotham’s HR Services and discover how our HR solutions can transform your crisis management approach and help safeguard your organization’s success.