Fear of swine flu may be almost as costly as pandemic

Apr 29 2009 by Nic Paton Print This Article

Sorry, what was that we said about green shoots? Amid reports of the first death from swine flu outside Mexico, it looks as if managers may now have to cope with the fall-out from a major public health crisis as well as a global economic recession, whether or not the emerging outbreak turns into a pandemic.

While medical experts by and large are urging caution, suggesting there is so far no guarantee that the world will experience a pandemic and that some of the virulence of the virus might have been lost as it mutated, it is clear that even the fear and worry of a looming pandemic could have a significant effect on many businesses around the world.

Already, Dr Richard Besser, acting director of the Centers for Disease Control and Prevention (CDC) in the U.S, has warned businesses that they need to be reviewing their plans to "think about what would I do if some of my workers couldn't come to work? How would my business function?"

Food safety expert Nancy Childs, professor of food marketing at Saint Joseph's University in Philadelphia, has warned that shoppers could be deterred from venturing out to malls and other public areas for fears of contracting the flu. With retailers already suffering from reduced consumer spending this could be a severe issue.

"Any potential for further slowdown in global economic activity is a concern," she said.

"Pandemic flu concerns, as occurred early in the decade with SARS and mid-decade in Europe and Asia with isolated Avian flu outbreaks in bird populations, generate an uneven impact on commerce," she added.

The 2003 Sars outbreak, for example, caused a $515 million blow to just the economy of Toronto, she pointed out.

More indirectly, shares in airlines and hotel firms have already been hit, as have U.S soy and corn futures because of worries over the outbreak's potential to harm global meat consumption and hit demand for grain to feed animals.

Shares in many pharmaceutical companies, who may stand to benefit from sales of vaccines and other protective equipment, such as flu vaccine Tamiflu maker Roche, have conversely been boosted.

In the UK, the HR body the Chartered Institute of Personnel and Development has echoed the CDC in urging employers to ensure they have contingency plans in place in case of an epidemic.

Senior public policy advisor Ben Willmott stressed it was important not to overstate the risk from swine flu, but that it was equally important for businesses to be planning ahead.

"Many employers will already have a policy on how to respond to a potential flu pandemic outbreak as a result of the heightened risk of bird flu over the last few years," he said.

"Employers should have in place strategies to allow them to run on skeleton staff levels. Service/customer-facing organisations should consider the possibilities for increasing the amount of online transactions, as well as self-service options for customers," he added.

More home working and use of video-links and teleconferencing technology could come into play if a full-blown pandemic began to rage.

"Organisations should also identify key roles that must be carried out and those individuals who have a wide range of skills who can fulfil more than one function," he continued.

"In case of a pandemic, employers should also formulate clear advice for staff on the symptoms of the virus and the importance of staying at home and seeking medical advice at the soonest opportunity," Willmott added.

The CDC's Besser, meanwhile, poured cold water on calls for employers to recommend that workers wear masks to or from, or even at, work.

"The evidence of (masks') value outside of health-care settings and outside of settings where you are coming directly face-to-face with someone who has an infectious disease, the evidence there is not very strong," he told reporters at a press briefing.

But communication around the importance of hand washing or not kissing when greeting people was probably a good idea.

Should a full-blown pandemic take hold, the impact on a world economy already reeling from the deepest recession since the 1930s could be devastating.

The World Bank, for example, estimated last year that a full flu pandemic could cost the global economy more than £2 trillion worldwide and result in a nearly five per cent drop in world output. Similarly, some in the City and on Wall Street have estimated that a pandemic could lead to between 15-20 per cent being could be wiped off the value of world shares.

In the UK alone, the Department of Health has calculated that as managers should expect to find as many as one in four workers off work during a pandemic, either because they are ill themselves or because they are looking after family members or because schools and childcare facilities have been shut.

According to the Federation of Small Businesses absence on this scale this could cost the economy as much as £1.5 billion a day in lost business.

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