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Compensating workers after a disaster

How do I compensate my employees when either Mother Nature or I decide to close our office because of inclement weather? During the recent hurricane we were closed for a day and a half. Most employees were out for two days because of a lack of power at home. Should employees be using personal or vacation time or do I simply pay them and chalk it up to an act of God?

Thoughts of the day: There is no one right answer to your question. Each business owner has to first assess the health of the business and then decide how much, if anything, can be allocated to helping out employees. Make sure your company is prepared for Black Swans — events that you cannot predict or control.

The first job for every business owner is to preserve the company. If you’re positioned to survive, then employees will have jobs to come back to. Ability to respond and be there for employees may be driven by the health of the company post-storm.

Evaluate the storm’s impact on the business. Is cash flow A-OK? Are reserves sufficient? Are clients still buying? If yes, then go on to consider what else can be done for employees.

If the company was open then it’s up to employees to use personal days to cover outages. If the company was closed it’s up to you to decide what to do. Check your policy manual for direction.

Do salaried employees have paychecks docked because the company was closed or they couldn’t get to work? Certainly hourly workers will lose out because they can’t report hours worked. Keep in mind that hourly workers are generally at the lower end of the wage scale where they can least afford gaps in income.

Do employees have enough personal days to deal with the emergency? What about employees who need to take care of post-storm issues. When an emergency event happens late in the year there’s a greater possibility that personal days have already been used for other activities. That’s the luck of the draw, but it still has a real impact on personal well-being.

If the company can afford it, consider a one-time increase of a few personal days, available the month after the emergency, to help close post-event needs.

If you planned to pay year-end bonuses, consider distributing them early. That may reduce profit sharing, if you have a plan, but the need may be greater for cash now versus putting the money into qualified plans that can’t be accessed.

What if the company has loads of reserves and is positioned to help employees in any way possible? Think about offering low-interest loans to help employees rebuild homes or replace cars, clothing and other possessions. Offer overtime to employees who want extra pay and are willing to work for it. Rent an apartment for people to use to take showers, get a hot meal or take a break from the devastation.

Reach out to federal, state and local emergency contacts. Have talks before and after work with employees and their families about what resources are available to help people recover. Bring in counselors to talk about managing in stressful times. Put someone in charge of helping employees figure out and fill out paperwork for disaster relief.

Lastly, get ready for the next Black Swan. The only thing you can do is be prepared. Set a plan in motion to build reserves, have lists of how to contact employees in emergency, policies on what is and is not the company’s responsibility.

Hold internal workshops on what people can do to recover from this event and get ready for the next one. Education is the first line of defense. Right now, while people are thinking about the topic, get them involved in building their own personal emergency preparedness plan.

Looking for a good book? Try “Leading People Through Disasters: An Action Guide: Preparing for and Dealing With the Human Side of Crises” by Kathryn McGee and Liz Guthridge.

Andi Gray is president of Strategy Leaders Inc., strategyleaders.com, a business-consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at (877) 238-3535. Do you have a question for Andi? Please send it to her, via email at AskAndi@StrategyLeaders.com or by mail to Andi Gray, Strategy Leaders Inc., 5 Crossways, Chappaqua, NY 10514. Visit AskAndi.com for an entire library of articles.

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About The Author

Andi Gray

Andi Gray is president of Strategy Leaders Inc., strategyleaders.com, a business consulting firm that specializes in helping small to midsize, privately held businesses achieve doubled revenues and tripled profits in repetitive growth cycles. Interested in learning how Strategy Leaders can help your business? Call now for a free consultation and diagnostic process: (877) 238-3535. Do you have a question for Andi? Email her: AskAndi@StrategyLeaders.com. Visit AskAndi.com for an entire library of her articles.

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