Why every business needs a contingency plan
Most days we expect business to operate as usual, but an unexpected disruption can happen at any time. Anything from equipment malfunctioning to an economic crash can put your company and employees in unprecedented situations. The best way to deal with disaster? Be prepared.
A contingency plan details how employees should respond to specific situations and restore operations. Think of it as the lifeboat that will keep you afloat when you enter rough and unpredictable waters. With a contingency plan in place, you’ll be able to steer back to shore quickly and effectively.
Here’s what a business contingency plan is, why you should have one, and how you can start planning.
What is a business contingency plan?
A contingency plan outlines the actions your organization will take during an unexpected circumstance. This will help you resume production quicker with minimal disruption.
Planning for if or when something happens means you’ll be ready to jump into action. By thoughtfully evaluating potential risks at work, you can anticipate “what if” scenarios, prepare a safety net, and create steps to get back on track.
What types of situations require contingency plans?
When you imagine a crisis, you might first think of a natural disaster or a global pandemic. However, there are plenty of smaller-scale events that can also disrupt or shut down your business. Situations like employee errors, equipment or resource problems, workplace hazards, cybersecurity breaches, and more can affect your organization’s operations, revenue, or reputation.
Contingency planning is about expecting the unexpected and being prepared to deal with worst-case scenarios before they happen. The types of threat each business could face differs, so it’s important to create a contingency plan that is specific to your company’s needs. Think about those “what if” scenarios and identify the biggest potential risks and vulnerabilities within your company. While the situation may not—and hopefully won’t—happen, you want to be prepared if it does.
The benefits of contingency planning
The past few years have shown how essential contingency planning is. From a global pandemic that put the world to a halt to an Internet outage that affected clients and businesses across Canada, companies can face all kinds of emergencies.
Contingency planning isn’t just for large corporations either. Risks are inherent in every business, and disruptions can happen anywhere at any time. While contingency planning can’t stop all problems from occurring in the first place, they can help you:
- Save time and money in restoring production;
- Minimize operational or financial damages;
- Keep employees safe when problems do arise; and
- Identify and evaluate potential risks within your company.
How to create a contingency plan
Change can happen rapidly, so it’s important to proactively think through potential problems and solutions. By planning ahead, communicating effectively, and testing your plan, you can overcome worst-case scenarios and protect your employees’ lives and livelihoods.
Want to learn how to get started with contingency planning? Our HR experts have broken down the process into three steps:
- Identify and prioritize risks;
- Create and communicate the contingency plan; and
- Test the plan for future effectiveness.
To learn more about each of these steps and how a business contingency plan can save the day, download our FREE Guide to Contingency Planning!