Can You Run Payroll in the Eye of a Hurricane?

Today’s post comes to us from board member Bob Clements. One of our predictions this year was that organizations will be putting more emphasis on disaster preparedness as part of a holistic human capital management strategy. Here Bob relates how Hurricane Sandy impacted one of his clients. Can you run payroll in the eye of a hurricane?

Lower Manhattan was plunged into darkness at about 9:00 PM on October 29, 2012. Hurricane Sandy was at its peak, and the superstorm was hammering New York City and the northeastern seaboard with torrential winds and driving rains. A power substation on the Lower East Side exploded due to flooding and the subsequent power outage would last for days. Data centers throughout the city went down, and for those that had power, voice and data communication was spotty at best.

One of my clients at the time was a not-for-profit, home-healthcare provider based in New York City. This client’s employees included nurses, therapists and social workers that would spend their days in the community, visiting patients and providing treatment in their homes throughout the five boroughs.

As Sandy headed towards the coast, New York declared a state of emergency, shutting down most transportation, evacuating coastal residents and deploying the National Guard. Like most businesses and agencies in the city, my client closed their offices, ensuring patients were as well off as they could be, and asking their employees to stay home through the storm. 

Once the storm passed, these healthcare workers would need to get back into the community, navigate the flooding and damage left behind by the hurricane, and provide much-needed care to their patients that may not have had a visit for several days. To do all of this, their employees would need money. Like many people, many of these employees lived paycheck-to-paycheck, and payday was only a couple of days away when the storm hit. My client knew that, in order for its employees to be ready to git the ground running, payroll had to be run on-time despite the superstorm.

From a technology perspective, this organization had moved its workforce management and payroll systems out of New York and into to the cloud a few years before. So, there was no risk of downtime. The challenge became communications.  How do you run payroll when your payroll administrators do not have power or access to the internet?

Desperate, the client’s payroll manager called our support desk. After what seemed like a hundred attempts to get a line out of New York, he was finally able to get through to our support manager. Our support manager then contacted one of our consultants in Toronto that had regularly worked with this client over the last few years and was familiar with the client’s policies, processes and systems. Over the next couple of hours, our consultant was able to access the client’s servers and run payroll, ensuring funds would be available on time, giving our client’s employees both peace of mind during a natural disaster and the ability to take care of their patients in the days that followed.

There are two important take-ways to this story. First, it is critical that an organization take care of its workforce, even if they are not at work when disaster strikes. Not only is this the right thing to do, it will allow for faster recovery once the critical hour passes. Second, ensure disaster recovery plans include a business continuity element. Having backups and even keeping systems online does no good if no one can access them. Nobody wants to think about a tragedy affecting them, but organizations that plan with these two things in mind will be better prepared should disaster strike.

Can your workers depend on you to pay them during emergencies?

One thought on “Can You Run Payroll in the Eye of a Hurricane?

  1. Great article Bob! Our organization, which is based in southern California and mainly concerned about earthquake outages, truly understands the scenario you described in your impactful example. About 5 years ago we moved our HR/Payroll platform to the cloud as a core DR strategy. In 2017 while our entire payroll staff was attending an out of state conference, they ran the full payroll cycle – from the conference in their hotel room 300 miles away from work. Of course, they had the luxury of good preparation and planning for this DR test. And, they invited several of their colleagues attending the conference to their room just to prove running payroll offsite could be done. This was a win-win DR test, and it also exposed at least one minor weakness in our DR plan. The key advice I offer others is to be sure to test your DR plan regularly (even if it means mixing business with pleasure). You truly owe it to your employees, and your customers, to be prepared for such a disaster, especially since no one can predict when the next disaster will happen.

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