How to Manage Business Risk in Times of the Pandemic?

The COVID-19 pandemic has brought us face-to-face with unprecedented situations in the business scenario. Regardless of how prepared the businesses were in all aspects of short and long-term planning, this was a crisis of epic proportions that no one could have prepared for in advance.

However, the organizations can use the fundamental ideas of risk management to carve a path out of the pandemic and diminish the lasting negative impact. From the USA to UK, Australia, and New Zealand, businesses are opting to get liability insurance online or even hiring risk management consultants, there is a lot you can do to effectively mitigate the business risks in times of pandemic.

Here’s outlining the risk management principles that can help you in moving past this crisis.

Start With an Identification of Your Risks

It is important to identify the risks before creating a strategy to navigate those risks. The pandemic has brought forth many unforeseen risks, along with complicating the pre-existing ones. You can effectively identify the business risks by:

• Considering all types of risks: financial, strategic, and operational
• Gathering information from both the employees and the stakeholders as they might have identified the risks that you couldn’t
• Taking into account the risk mitigation policies of other organizations in your vertical, be it in your country or abroad

Return to this risk identification technique every two to five years to consistently update the risk profile of your business.

Business Continuity Planning In the Pandemic

With the forecasts showing a 5.2% contraction in global GDP this year, business continuity planning has never been more important. It is needed to reduce recovery time and soften the impact.

The planning has to be done both internally and externally, and here’s considering both these aspects individually:

Internal business continuity planning:

It involves the identification of the critical functions, employees, and equipment to determine where, how, and by whom the critical services are offered. You might consider putting a stop to non-essential functions for reducing the risks of exposure, supporting social distancing measures, and reducing cash expenditures.

External business continuity planning:

This involves an assessment and analysis of the supply chain, involving all the probable risks faced by the distributors, suppliers, manufacturers, vendors, and buyers of the organization and the stakeholders that you rely on.

The remote working situation enabled by the present situation has also come with its own risks. Businesses have had to ensure that the employees have the required software, hardware, and internet connectivity to continue their work. The remote working has led to a fivefold increase in the risks for phishing and cyber-attacks. Thus, businesses need to come up with new policies to tighten their security hold, and the employees need to be better trained in this arena.

Bringing Business Advisers into the Picture

It is high time to bring business advisers into the picture as business recovery can only be possible through the combined efforts of the business owners, stakeholders, and advisers. You can consider getting in touch with:

• Risk management consultants to assist in the identification, analysis, evaluation, and treatment of your risks. They will help in creating and implement risk management plans.
• Insurance advisers to help you assess the present insurance policies and advise on whether you have the coverage you need.
• Legal counsel to manage health, security, and financial security of the employees, contractual issues, regulatory issues, and so on

A popular saying goes, ‘history repeats itself.’ So, it’s unlikely that this is going to be the last major hurdle that the businesses will face. Adapting proper risk management techniques during the pandemic will help in long-term mitigation of loss, effective business continuity, and improved recovery.