Pandemic planning results in savings, says study

Investing in pandemic planning not only benefits worker health, it can positively affect a company’s financial survival as well.

This is according to new research from the Schulich School of Business entitled, Making a Case for Investing in Pandemic Preparedness, which studies the micro-economic impact of an influenza pandemic on individual companies.


Investing in pandemic planning not only benefits worker health, it can positively affect a company’s financial survival as well.


This is according to new research from the Schulich School of Business entitled, Making a Case for Investing in Pandemic Preparedness, which studies the micro-economic impact of an influenza pandemic on individual companies.


Public Health statistics indicate that an influenza pandemic can cause a 30 to 50 per cent employee absenteeism rate, says Amin Mawani, author of the research and associate professor in the health industry management program at the Schulich School of Business in Toronto.
[Watch: Mawani discusses his research]

Health statistics also predict a three to ten per cent per year probability of an influenza pandemic occurring. The Canadian government has antiviral stockpile to serve only 17 per cent of the population, Mawani adds.


“These facts made me realize that someone somewhere else needs to be prepared for the pandemic,” Mawani tells attendees of the World Conference on Disaster Management, held in Toronto recently.

A pandemic that causes large incidents of employee absenteeism can significantly disrupt business operations and ultimately affect a company’s bottom-line, the professor says. And as supply chains become increasingly global, work disruptions because of absenteeism will likely impact even an organization’s economic partners.

A Harvard Business Review report in 2003 shows that less than 25 per cent of Fortune 500 firms are prepared to handle supply chain disruption.

“Supply chains are becoming increasingly global, with lower levels of inventory and higher levels of agility, thereby increasing potential for disruption,” Mawani says.

Citing the SARS outbreak in the early 2000 as an example, Mawani says that health crisis caused 44 deaths in Canada, but absenteeism among employees, customers and suppliers cost the Canadian economy $2 billion.

The Schulich study looks at the potential costs for companies of mitigating the effects of absenteeism in the event of an influenza pandemic and examines them against the potential benefits in the form of revenue preserved.

“Commonly used corporate capital budget metrics indicate that investments in pandemic preparedness can be economically and financially viable,” says Mawani.

Investing in employee health and safety through pandemic planning includes expenses on antiviral stockpiles, personal protective equipment and training.

According to the World Health Organization, antiviral drugs will be key in controlling an influenza pandemic. Since the Canadian government’s antiviral stockpile can only treat 17 per cent of the population, companies should not rely on government to protect its workers against an influenza pandemic, Mawani says.


Mawani's research paper can be downloaded at www.schulich.york.ca/pandemic.