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HR and Management: Coping with Corporate Crisis

HR manager selecting options to deal with corporate crisis

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All business owners and operators, human resources (HR) professionals, and IT experts know that a corporate crisis can occur without warning. Unfortunately, crises are a part of industries everywhere. While some crises can go away within a short period of time, others tend to last longer even when the initial problem is resolved.

That’s why it’s important for you and your company (your in-house employees especially) to be on the roll whenever the inevitable happens. The good news, HR and management can cope with a corporate crisis when effective planning and collaboration are involved.

In this essential overview, we will explain the following:

  • What counts as a corporate crisis
  • The types of crises that a company might encounter, AND
  • A 4-step plan to survive and thrive during a corporate crisis

So, let’s dive in!

Key Characteristics Of A Corporate Crisis

“A corporate crisis refers to anything that is detrimental to the health and future of a company,” says Vernon Troy, an HR blogger at Academicbrits and PhD Kingdom. “A corporate crisis can affect a company’s finances, operations, reputation, and or people in various ways.”

With that said, a corporate crisis can come from any direction. In other words, when it rises is inevitable. You never know how high or low the impact will be, when a crisis strikes. Now, while there’s a low probability that a crisis will occur, it can still happen at any time.

A caution sign that reads "Crisis ahead".
Unfortunately, many crises can occur without warning, such as in the event of a power outage or earthquake.

Types Of Corporate Crises

With the key characteristics in mind, a crisis management plan should address more than one crisis. Chances are, your company might be hit with crises left and right – you never know. Therefore, it’s imperative that your plan addresses many crises. 

Here are some examples of the type of crises that your company might encounter: 

  • Power outages (which may affect operations)
  • Legal action or lawsuits
  • IT or network infrastructure outages (e.g. computer viruses, ransomware, etc.)
  • Damage to company property or infrastructure (e.g. fire, flood, etc.)
  • Natural disasters (e.g. hurricanes, earthquakes, etc.)
  • Violent attacks (or related attacks) against employees and or management
  • Disease outbreaks (like the COVID-19 pandemic)
  • Death or injury of prominent employees, and so on…

The 4-Step Corporate Crisis Management Plan

So, if you have employees who work on-site, then it’s essential that you and the company get together to create a plan for corporate crises. This 4-step plan can help your HR and management get started on tackling potential crises:

Step 1: Develop a Crisis-Readiness Plan.

“Tackling a corporate crisis requires having a crisis-readiness plan,” says Charlene Peterson, a business writer at Thesis Help and Coursework Help. “In other words, make it yours and your management team’s job to prepare for any corporate crisis. First, identify any potential threats that might hurt your company. Whether it’s natural disasters, malware, or so on, your company has to be ready for anything.”

A business person holding their hand out to stop a domino effect.

With that in mind, your crisis-readiness plan should consist of the following areas:

  • An Emergency Response Plan that includes a plan for: 
    • Lockdowns
    • Evacuation, AND
    • Sheltering
  • A Crisis Communications Plan, which describes how to efficiently communicate with the following people, should a crisis occur:
    • Employees
    • Customers
    • Stakeholders, AND 
    • The media
  • A Business Continuity Plan, which lists strategies on how to prevent any disruptions in business; AND,
  • An IT Plan, which includes:
    • How to recover computer hardware
    • How to recover connectivity, AND
    • How to recover data, such as during a vendor outage

Step 2: Build A Crisis Management Team.

Next, assemble a crisis management team that can help the company cope with a crisis. A crisis management team is responsible for creating effective policies that can go into place whenever a crisis happens. Those policies should come with contingency plans that will go into effect, should the first few options fail during a crisis. 

With that said, your team should have the following personnel: 

  • A team leader, who coordinates activities needed during the crisis
  • An HR manager, who works to resolve human issues created by the crisis
  • A security director, who serves as primary information officer whenever there’s a crisis
  • A finance director, who handles the funds during a crisis
  • A lawyer, for any legal needs; AND,
  • A media director, who acts as spokesperson for the press and the media

Step 3: Prioritize Information And Training.

Now, your company will notice that there’s a lot of information that’s involved, even during a crisis. However, it’s important to safeguard sensitive data, or else it’ll fall into the wrong hands, or get lost during the chaos. 

Therefore, make it your job to keep your employees informed about anything and everything that happens in the company. Even when a crisis happens, make sure that you keep your employees in the loop. Information on corporate crisis can be spread in the following ways:

  • Daily bulletins (emails or board postings)
  • Text messages
  • Push notifications for mobile devices, computers, etc.
  • Regular training sessions
  • A password-protected website for employees to learn from modules, etc.

Now, as you train your employees, make sure that they learn how to:

  • Change passwords regularly
  • Find building exits in the event of a fire, an attack, etc.
  • Spot and report phishing attempts
  • Backup data
  • Report suspicious activity
  • Act during an emergency (e.g., injuries, fire, etc.), etc.

(For more tips, see TimeForge’s article on Account Security.)

Step 4: Have A Recovery Plan.

Finally, think about how the company will recover post-crisis. In other words, what needs to be done after a crisis strikes?

Essentially, you’ll need to think about the following questions:

  • How many employees will be affected by a crisis?
  • How many customers (and stakeholders) will be affected by a crisis?
  • What types of computer hardware and software would be vulnerable, should a crisis strike?
  • What kinds of roles would you need for your management team?
  • Who (or whom) would you have in leadership roles for your management team? 

These types of questions will help you prepare a recovery plan for corporate crisis management. 

Conclusion

As you can see, anything can happen in a company, including a crisis. Ultimately, education and prevention are key, when it comes to corporate crises. 

Therefore, HR and management must work together to ensure that the company is in good hands, regardless if there’s a crisis or not. Since crises can happen at any time, it’s important to have a corporate crisis management plan in place. 

Good luck!

George J. Newton is a writer and editor at 1Day2write.com and Writemyx.com. He is also a contributing writer for Britstudent.com. As a content writer, he writes articles about business trends, social media marketing, and coding. 

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