According to the World Health Organization, “Coronaviruses are a large family of viruses that cause illnesses ranging from the common cold to far more severe diseases such as Middle East Respiratory Syndrome and Severe Acute Respiratory Syndrome.” Unless you’re living under a rock, then you’ve heard about the Coronavirus Disease of 2019 (“COVID-19”) that originated in Wuhan, China and is spreading globally. As of this writing, the U.S. Centers for Disease Control and Prevention (“CDC”) reported that COVID-19 had spread to 60 international locations, including the U.S., and community spread – the spread of an illness for which the source of infection is unknown – is a major concern. Given the level of concern surrounding the transmission of COVID-19, this raises questions on how well prepared a business, specifically collection agencies, is to operate should an outbreak occur and what the role of a business is in minimizing the severity of outbreaks.
Disaster planning comes in a number of forms, but many fail to take into consideration the unlikely event of viral outbreaks since (outside of the flu season) they don’t happen that often. Over the last few years of conducting surveys among collection agencies and the larger accounts receivable management (“ARM”) industry, we found that between 54% and 60% of respondents provide telework capabilities to some, but not all, employees and typically restrict this benefit to managers and above, which suggests the majority of employees lack the ability to telework when sick. Unfortunately, a number of employers still take the “suck it up” and “deal with it” approach that incentivizes employees to go to work when sick – even when telework is an option. On the one hand, telework is a benefit that may not be appropriate for all employees. On the other hand, collection agencies are an industry that specializes in outsourced business services so presence shouldn’t be needed to conduct work efficiently from home.
In February 2020, the CDC issued interim guidance for businesses and employers on how to respond and handle COVID-19. It provides a range of recommendations such as encouraging sick employees to stay home (or telework), separating sick employees from others (see first recommendation), educating on proper hygiene (i.e., hand washing), performing routine office cleaning, and mitigating risks related to travel (i.e., do you need to fly or can you meet virtually). While the CDC statement for businesses provides far more detail than the points listed above, a critical takeaway towards the end is that the CDC could impose international and domestic travel restrictions which could hurt businesses if they aren’t equipped to manage client interactions remotely.
The CDC stops well short of issuing draconian restrictions on businesses and consumers, but is clearly concerned by the prospect of community transmission for COVID-19. While some businesses like restaurants and hotels can’t operate when employees aren’t present, a lot of businesses such as collection agencies and other ARM firms can operate with telework capabilities. There’s a strong argument that businesses with the ability to telework should embrace this capability to reduce the risk of community transmission for COVID-19. That said, does embracing telework really benefit these businesses or are they making a sacrifice to support the greater good?
Interestingly, the development of a more comprehensive telework strategy for disaster planning along with a long-term transition towards an increased percentage of partially-to-fully remote employees has some economic benefits for businesses. Regarding the inclusion of a telework strategy for disaster planning, in the case of COVID-19, it minimizes the potential of business disruptions from a large portion of the workforce falling ill. Taking it a step further, should the CDC issue a city-wide quarantine (see China and Italy) and a telework strategy not be in place, then business disruptions will be even greater. As for the economic benefits of a more comprehensive telework strategy, this provides for greater opportunity to recruit employees from all over that could result in cost savings based on differences in regional pay along with reducing building and rental expense overhead from leasing smaller office spaces.
Based upon our knowledge of collection agencies and ARM firms, some have already taken these steps while others will oppose the practice until the end of time. However, we recommend that owners and operators review their disaster recovery plans and develop a strategy for viral outbreaks. Additionally, we believe it’s prudent to develop some level of telework capabilities to prevent a business from effectively shutting down should disaster strike.
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