Most Employers Lack Formal Disaster Recovery Plan

September 29, 2005 ( - Even though many employers responding to a recent Hewitt Associates poll do not have a formal disaster recovery policy, the employers are nevertheless stepping up in substantive ways to help their employees get back on their feet.

A Hewitt news release said the survey found that a scant 8% of companies have a fully developed written plan – a result Hewitt said could be explained by the variety of responses demanded by different kinds of natural disasters.

The key issue for employers – particularly in the post-Katrina period – is to make sure the company can respond without delay when it or its employees are affected by a hurricane or other disaster.

“The question is whether the lack of a formal HR disaster plan is getting in the way of quick response time,” Hewitt researchers wrote. “Clearly now, more than ever, is the time to put in place an HR disaster plan to ensure the organization is ready to quickly respond to employees’ needs in the event of a disaster – even if the plan just focuses on possible responses given certain situations.”

Having a written plan in hand or not, Hewitt found that many companies are offering a variety of resources to help employees deal with the emotional and financial impact of a disaster even though they are not required to do so. According to the survey, which covered 93 companies, employers are also encouraging employees unaffected by the situation to help with the response. Corporate responses have included:

  • continuing pay and benefits
  • relaxing administrative requirements for benefits
  • offering flexible work arrangements
  • coordinating employee donations to company and/or relief efforts.

The Hewitt study also found that the majority of companies continue 100% of pay for 30 days in situations where the business is shut down and employees are unable to get to the worksite. Notably, a significant proportion continue pay for 30 days even when employees decide they cannot get to the worksite for personal reasons (e.g. home badly damaged, family member missing or hurt). Asserted Hewitt: “This reflects employers acknowledgement that in order to be fully productive, employees must be given time to manage their own personal situations.”

While 27% of companies offer outright cash payments to help their affected employees ($2,000 to $2,250) employers are more likely to offer other support recognizing the importance of providing the “basics” in terms of food, shelter, and clothing. In addition to financial support, about 40% of companies recognize the need to help deal with the emotional trauma by providing counseling or other employee assistance above and beyond the existing Employee Assistance Program.

With employee insurance a particularly critical issue in the aftermath of a storm, survey participants reported that they take the necessary steps to make sure their employees receive health, life and disability benefits even when they are not working. To make that happen, Hewitt said employers, along with the insurance industry, have implemented some practices to reduce administrative requirements.

Those steps include:

  • covering all medical services as “in network”
  • relaxing pre-certification requirements
  • instituting grace periods for lack of premium payments
  • granting exceptions for forms with due dates
  • continuing disability benefits without attending physician statements.

However, when it comes to life insurance 56% of companies require additional efforts to determine proper beneficiaries and only 37% offer consideration to approve death benefits without a death certificate.