COLLEGE STATION, TEXAS — Five years after 9/11 and one year after Hurricane Katrina, most companies have some form of disaster response plan in place; however, one out of four professionals responsible for corporate disaster preparedness efforts report that they have never conducted a disaster response exercise. The finding is part of a survey commissioned by the National Emergency Response & Rescue Training Center (NERRTC), a division of The Texas A&M University System’s Texas Engineering Extension Service, that aimed to uncover trends in disaster preparation efforts at large companies across six key industries — chemical, commercial real estate, energy, entertainment, health care and transportation.
While a majority of the respondents across the industries have updated disaster response and recovery plans within the past year (83 percent), a considerable number of respondents report that they do not train employees on the plans or conduct exercises regularly to assess the effectiveness of their plans. Experts caution that developing a plan without also training and exercising may be cause for concern.
“The survey results suggest that private sector preparedness has improved in recent years, but critical gaps still exist,” said Harrison Lobdell, NERRTC Director. “Having a plan is important, but it’s only part of the equation. Employees need to be trained to implement plans under extreme pressure in an invariably chaotic environment, and those plans need to be tested to make sure they work. According to our survey, those critical preparations are being overlooked at many companies today.”
According to the study, the commercial real estate sector is least prepared of the six industries surveyed. A majority of commercial real estate respondents (53 percent) said that their companies have not conducted exercises on their disaster plans within the past year. Of those that had, 32 percent rated those exercises as “poor” or “fair.”
On the other end of the spectrum, the energy industry appears to be most prepared in terms of response planning, training and exercising. Still, nearly 19 percent of energy respondents said their companies have not conducted exercises on their disaster plans in the past year. Most experts recommend conducting an exercise at least once a quarter, depending on the specific risks identified for the company and site. An exercise that brings all parts of the emergency response plan together at least once a year also should be part of an overall program as it allows companies to assess their plans and training, as well as test equipment in response to a broad range of realistic scenarios.
Survey results indicate that disaster planning and response is assigned to mid- and upper-level managers in more than half of the companies surveyed, and that most have been tasked with disaster recovery responsibilities in addition to their primary roles.
Overall, the largest companies surveyed — those with 10,000 employees or more — seemed to be most satisfied with their plans (44 percent). Experts say that having access to more resources to plan, train, equip and conduct exercises may account for the increased satisfaction.
“Preparing for constantly changing and virtually unlimited threats can be taxing on both human and monetary resources, but it is absolutely critical. Studies show that eight out of 10 companies will experience a crisis in the next five years that results in a decline of market capitalization of between 20 to 30 percent,” said Doug Rapé of NERRTC. “The expense of planning, training and conducting exercises is insignificant compared to the catastrophic cost of a poor response in a crisis. In more than 10 years of helping clients prepare for disasters, we have yet to see a case where proper preparation didn’t prove to be a wise investment.”