Modjoul Blog

Operating Loss Amid Quarantine

By Josh Turner on June 18, 2020 |

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Having an efficient screening process in place on the front-end is currently of the utmost importance in a company.  Implemented social distancing and contact tracing measures on the back-end work together with screening to prevent and minimize spread.  By now, we all know the risks and dangers that a positive COVID-19 test brings to both an individual and organizational. In addition to the health and wellness concerns and implications that must be addressed and treated, there are the daily operating losses that can significantly damage or even sink a company. Let’s take a look at how a company labeled in the small and mid-size enterprise (SME) category could be impacted.  Use this as a suggested guide and apply it to your own company with size, average hours worked per day and pay rates adjusted accordingly.

The Small Business Administration (SBA) categorizes SMEs by looking at 4 things about that company.  That combination view means that some companies with up to 1,500 employees are a part of this classification. To show the magnitude of operating loss, we will use a 300-employee organization as the base.  The U.S. Bureau of Labor Statistics shows that the average working income for a full-time wage or salary worker in the U.S. is $936 per week, or $23/hour based on a 40-hour work week. We will go conservative again and use that $23 per hour as our mark for total hourly labor cost (wages plus benefits, etc).  Following a positive COVID-19 test, the concerned incubation period is defined as up to 14 days.  With the average workweek 5 days, we will use 10 days as our incubation measure. We will now apply this information in two examples below.  Example A assumes the company has screening, contact tracing and social distancing protocols in place and therefore can contain the spread.  Example B portrays minimal to no procedures in place and therefore the company will need to quarantine up to its entire staff.  Again, please apply and update your company’s specific figures for a more accurate representation.

Example A:  1 employee infected, 30 contacts quarantined.  $23/hr x 8-hour work day x 30 employees = $5,520 in daily labor cost losses,  $5,520 x 10 lost quarantined work days = $55,200 in total quarantined labor cost losses

Example B:  1 employee infected, 300 employees quarantined.  $23/hr x 8-hour work day x 300 employees = $55,200 in daily labor cost losses,  $55,200 x 10 lost quarantined work days = $552,000 in total quarantined labor cost losses

Losses hurt. Most employers are putting processes in place to protect against the critical ones as in Example B.  The examples are relatively low-cost representations.  The total labor costs are likely higher where you work, and this does not even include the loss of products/services provided. Protect your employees and companies, and let’s make sure we are preventing the losses we can as we plan for our successful tomorrows.

We all share the responsibility of keeping ourselves safe. For those of us also accountable for the safety of others, Modjoul has the solution to fit your company’s needs.  If you would like to know more, please send us a message or give us a call and a team member will be in touch within a few business hours. We are happy to work WITH you. 

 

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