Is Your Company Ready for War?

by Dennis Jacobe, PhD
Chief Economist, The Gallup Organization

While meeting with some colleagues in New York City last week, I mentioned the preliminary results of a new Gallup/UBS Employee Outlook Index poll* concerning the security enhancements that have been made by private-sector companies since Sept. 11, 2001. The results show an overall lack of effort to improve corporate security in this country. These findings surprised the New Yorkers with whom I was meeting, particularly given the increased terrorist threat in light of an impending attack on Iraq.

My New York friends reminded me that unlike most of the nation, the city remains under an orange terror alert. It was easy to see the increased level of building security as you entered their offices. Further, they noted that all of the companies around them had created escape plans as a precaution against another terrorist attack.

In sharp contrast, only a third of employees working at for-profit, private sector firms nationwide say that the companies they work for have established a special evacuation plan in case of a terrorist attack. This is surprising even for companies that feel their chances of being affected by a terrorist event are slim, given that developing such a plan is a very low-cost precaution.

Similarly, only one in five employees say their companies did something in response to the recent upgrade in the terrorist alert status. This is no big surprise, since there were no specific instructions about what companies should do in response to the government's announcement, and buying duct tape makes even less sense for most companies than it does for the average American.

No Effort to Improve Employee Security

Fifty-seven percent of employees say their companies have not upgraded security for their employees since Sept. 11, 2001. Another 27% say their companies have made only minor changes to improve employee security. Just 16% say their companies have upgraded their employee security a great deal over the past year. In spite of the increased threat of terrorist attacks as the United States goes to war, these percentages are similar to those Gallup obtained last August**.

Little Effort to Improve Data Security

Thirty-eight percent of employees say that their companies have not upgraded security for their business records and other data since Sept. 11, 2001. Another 20% say their companies have made only minor efforts to improve data security, while 27% don't know if any changes have been made. Just 15% of employees say their companies have upgraded their business record/data security a great deal over the past 12 months. Again, these percentages are just about the same as those obtained last August.

Bottom Line

Over the next few weeks, the nation's attention will focus on events in the Middle East. All of us hope that the war with Iraq will be quick and low-cost in terms of lives and resources. And although many public officials keep saying another major terrorist attack is almost inevitable, most of us don't think we'll be impacted directly. Only 4% of employees say they are very worried that their companies will be victims of a terrorist attack, while another 16% are somewhat worried. Half are not at all worried and 29% are not too worried.

There have been no terrorist attacks on the U.S. business community over the past year and a half, nor did we experience attacks on U.S. soil following the first war with Iraq or the incursions in Afghanistan. Therefore, it's not hard to understand why most business leaders may assume that the chances that their companies will be impacted directly by terrorism are small, particularly if they don't have facilities in the nation's most prominent cities. In other words, the risk-reward ratio for most U.S. companies may not financially support a major effort to increase security; doing nothing may be a very logical financial decision.

Still, I can't help but think that these are the same kinds of calculations that the nation's airlines made regarding airport security prior to Sept. 11; most of these airlines are now going broke. Terrorists are known to like "soft" targets. Sometimes a little contingency planning pays off big.

*Results for March 2003 are based on telephone interviews with 354 adults who are employed with non-governmental, for-profit companies having five or more employees, aged 18and older, conducted March 5-8, 2003. For results based on the total sample, one can say with 95% confidence that the maximum margin of sampling error is ±6%.

**Results for August 2002 are based on telephone interviews with 559 adults who are employed with non-governmental, for-profit companies having five or more employees, aged 18 and older, conducted Aug. 5-8, 2002, and Aug. 19-21, 2002. For results based on the total sample, one can say with 95% confidence that the maximum margin of sampling error is ±5%.

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