Businesses are more dependent on their supply chains than ever, with supply chain disruption one of the leading causes of business instability. To thrive, companies need to be resilient, and part of that is their location and the location of suppliers. According to FM Global’s 2015 FM Global Resilience Index, Norway tops the list of resilient countries, with Switzerland in second place.

The study’s purpose is to help companies evaluate and manage their supply chain risk by ranking 130 countries and regions in terms of their business resilience to supply chain disruption. Data is based on: economic strength, risk quality (mostly related to natural hazard exposure and risk management) and supply chain factors (including corruption, infrastructure and local supplier quality).

According to the study:

1. Norway retains its top position in the index from last year, with strong results for economic productivity, control of corruption, political risk and resilience to an oil shock. The country’s management of fire risk offers opportunity to improve still further.

2. Despite its massive oil reserves, Venezuela ranks 130, placing it at the bottom of the index, and reflecting the many challenges South America faces, ranging from economic and political to geological, with its west coast on the Pacific ‘Ring of Fire’.

3. Taiwan has jumped the most in the index – 52 places in the annual ranking to 37; more than any other country. Its rise is due mainly to a substantial improvement in the country’s commitment to risk management, as it relates both to natural hazard risk and fire risk. Given the country’s location at the western edge of the Philippine Sea plate, this is a welcome development.

4. Ukraine, ranked 107, and Kazakhstan, ranked 102, dropped more places this year than any other country; a fall of 31 places each. Unsurprisingly, for Ukraine, the worsening political risk, combined with poorer infrastructure, was to blame. The fall for Kazakhstan this year reflects a poorer commitment to natural hazard risk management in the region.

5. In the European Union (EU), Greece fell from position 54 to 65. The recent victory of the anti-austerity Syriza party almost certainly will usher in a period of greater friction and turbulence with its EU partners.

6. France, ranked 19, trails Germany at 6, the leading EU nation. France has slid down the index in recent years reflecting a rising risk of terrorism – evidenced tragically in Paris – and deteriorating perceptions of both infrastructure and local suppliers. Also exposed to terrorism risk is the United Kingdom, which nevertheless held steady at 20 for the third year running, aided by its relative resistance to oil shocks.

New to the top 10 this year are Qatar, ranked 7, and Finland, ranked 9. Qatar benefits from its macroeconomic stability, efficient goods and labor markets and high degree of security. The country owes its rise of 8 places to a considerable improvement in commitment to fire risk management in the region. Finland’s strengths derive from its innovative capabilities, a product of high public and private investment in research and development, strong links between academia and private sector companies, and an excellent record in education and training, according to the study.

In 10th place is U.S. Region 3, the central region of the United States. While this part of the country is subject to a variety of natural hazards, there is less exposure than states on the east or west coasts of the country. Belgium, ranked 11, and Australia, ranked 14, dropped out of the top 10–barely–and both countries retain high positions in the 2015 index.

 

 

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Starbucks Coffee Race Together Campaign

One aspect of Starbucks Coffee’s recent “Race Together” campaign encouraged employees to engage customers in a discussion about race. This effort—which had employees write #racetogether on customers’ cups to encourage dialogue—was well intentioned. However, the speed at which it was scrapped shows just how difficult it is to incorporate political and social discussions into the workplace.

The term “hostile work environment” often gets thrown around without any thought to what that really means. The greatest misconception is that anything hostile or abusive that happens at the workplace is illegal. Albeit inappropriate, screaming at an employee or calling him stupid is simply not illegal.

The flipside of that coin is that conduct does not necessarily have to be abusive or threatening to create a hostile environment when the subject matter is a protected category under Title VII, which prohibits discrimination by covered employers on the basis of race, color, religion, sex or national origin. Forcing employees to engage in discussions with strangers about race without any control over how the customer will respond opens an opportunity for the work environment to become incredibly uncomfortable for employees.

Employers have a duty to protect their employees from harassment based upon protected categories by customers, not just other employees. So if a customer responds to an offer to start a conversation about race with a mean-spirited joke or simply a racial epithet, the employer will have to take action against that customer. If these types of responses become repetitive, the employer would likely have an obligation to stop the source of the conflict—in other words, cease the practice of having employees start discussions about race.

There are many other pitfalls in having workplace discussions around sensitive topics that fall into protected categories under Title VII. A discussion of this sort, in spite of the best intentions of the participants to be thoughtful and candid, can easily bring to the surface differences in thought among employees, which may result in ill will. Likewise, comments made during these conversations could be used as evidence that a particular manager is prejudiced against certain types of individuals. Individuals certainly have different perceptions of the meanings of different comments and actions, so a manager might feel that comments he makes do not show any sort of prejudice, while the people hearing the conversation can come to a completely different conclusion. Should the manager then take some disciplinary or other job-related action against an employee, the conversation may be used as the basis for a discrimination lawsuit. At that point, what the speaker intended is less relevant than how the comment is perceived by a judge or jury.

Most employers today certainly haven’t taken steps to instigate this sort of discussion in the workplace. But events do arise in the news that relate to these topics and become the fodder for water cooler conversation. Most employers do not want to become the “speech police,” monitoring every communication among employees that might not relate directly to the business. Yet, these conversations can, just as the discussion on race that Starbucks initiated, become problematic. Then, the key is to make sure that employees are aware of their opportunities to report behavior that causes them discomfort. Open door and non-harassment policies attempt to encourage employees to come forward well before any workplace conduct would become a truly actionable illegal hostile environment. Encouraging use of this process can assist employers in nipping problems in the bud.

Handling a complaint related to an uncomfortable discussion can have its own problems. Chances are that the employee being complained of did not understand that talking about what he saw on the news the night before should be grounds for his being called out. Many employees wrongly believe that the First Amendment protects the right to discuss these events at a private employer’s place of work. Thus, when having the conversation with the offending employee, the employer needs to be prepared to educate the employee on the differences of opinions and perceptions that different people have as well as the employer’s right to keep discussions out of the workplace.

While the conversation about the Starbucks “Race Together” campaign will likely die down, employers can continue to expect the occasional need to address misunderstandings and comments as long as the outside world is focused on these issues. In light of that, here are some steps employers can take to be prepared.

  • Train managers that they should not be engaging in conversations on non-work-related controversial topics with their employees.
  • Train employees and managers in the reporting procedures under open-door policies so they know how to raise a problem before it becomes a big issue.
  • Train employees that your nondiscrimination and harassment policy extends not just to their fellow employees, but also to customers and vendors.

Finally, and most importantly, be responsive when employees raise concerns. Not every complaint is a valid one and not every event that makes somebody uncomfortable is inappropriate. Sometimes an employee must be told that their complaint is not going to result in any changes. Failing to follow up with the complaining employee creates an atmosphere of distrust or leads to the belief that the employer does not mean what it says about preventing illegal harassment.

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Last week, Tesla Motors unveiled another first for the auto industry: starting immediately, the company will be delivering upgrades directly to vehicles via the Internet.

“We view it the same away as updating your phone or your laptop,” said CEO Elon Musk, as reported in the Wall Street Journal on March 19.

Remote updates for cars was not the only taste of the future that Tesla announced last week. Talk is buzzing even louder about the new “driverless” capability that Tesla’s cars will get this summer (via wireless download, of course). The New York Times says that once your vehicle gets the upgrade, you will be able to turn on an “autopilot” when on major highways.

Tesla’s move further disrupts the traditional way of business in the automotive industry—the direct-to-consumer updates eliminate yet another reason to buy and service through a dealer. The convenience potential to consumers is obvious, and everyone is excited about driverless technology finally being within reach. What could be the downside?

Enter that fear du jour, cybersecurity. Capitol Hill is considering the unpleasant potential of bad guys being able to hack your car’s sophisticated computer system. Last year, Senator Edward Markey (D-MA) sent a letter to 20 car manufacturers asking them about their vehicles’ reliance on wireless computing technology and, in turn, the vulnerability of their systems. In February, he published the companies’ replies, and they weren’t completely reassuring (the full report is here).

According to Wired, Sen. Markey found that “nearly 100%” of vehicles sold today use wireless connections that could be used to access “sensitive systems or [to] compromise privacy.” Combine these findings with the recent exposé on 60 Minutes—where a DARPA hacker demonstrated the ability to hack into a Toyota Prius and gain control of the vehicle’s braking and acceleration—and you have a pretty good understanding of why Sen. Markey is concerned.

Manufacturers that responded to the Senator’s inquiry gave mostly ambiguous answers about the cybersecurity of their products. Some said they encrypt information such as driving history and physical location, while others admitted that they don’t use encryption. The same is true for third-party testing of vehicle cybersecurity—some do it, but many do not.

Tesla was one of three companies that chose not to respond to Sen. Markey’s questions. Do concerned consumers have cause to worry? After all, last year, Chinese hackers publicized their successful hack of a Tesla, although they limited their efforts to unlocking the doors and opening the sunroof.

The company is generally tight-lipped, but Musk has said that he is committed to security. He recently stated at a tech conference that “one of the key areas of focus for the company is…protecting…self-driving software from malicious attacks.”

Let’s hope so. A breach of self-driving software would, of course, be a much bigger problem than the Chinese hack of the car’s more superficial systems. And the non-response to Sen. Markey’s investigation would then start to resemble a self-inflicted wound.

For more on the risks of computerized vehicles, see “Robots Take the Wheel” in the March issue of Risk Management.

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Advocates for the legalization of medical marijuana have had a busy year. Three states–Maryland, Minnesota and New York–passed legislation this year, while Florida, Ohio and Pennsylvania have pending legislation or ballot proposals. Additionally, in two states, Colorado and Washington, voters have approved recreational marijuana in addition to medical marijuana, with the issue pending in Oregon and Alaska.

These measures have prompted many employers to ask if there is growing societal acceptance of marijuana and other drugs and should they expect a possible increase in employees using drugs on the job.

New data suggests the answer to both of those questions may be yes. An analysis from Quest Diagnostics, which provides workplace drug testing to private and public employers, found that in 2013, the percentage of employees that tested positive for drugs increased for the first time in 10 years, fueled by a rise in marijuana and amphetamines. The analysis involved 8.5 million urine, oral fluid and hair workplace drug tests in the United States.

The cost of substance abuse, including alcohol, on businesses, in terms of employee absenteeism, occupational injury, and impaired reasoning and reaction time, is significant–more than $276 billion annually by some estimates. A survey sponsored by the National Institute on Drug Abuse found that drug-using employees are 2.5 times more likely to have absences of eight days or more, 2.2 times more likely to request early dismissal or time off, 3 times more likely to be late for work, and 5 times more likely to file a workers compensation claim.

As a result, most businesses have comprehensive drug-free workplace programs in place, and 57% of American businesses required all job candidates to pass a drug test in 2011, according to the Society for Human Resource Management. Due in part to these workplace efforts, substance abuse by workers subject to testing declined incrementally over the past decade, giving hope that the epidemic of drug use and misuse was abating.

But the Quest Diagnostics report suggests those gains may be reversing. The positivity rate for 7.6 million urine drug tests in the U.S. workforce increased 5.7% in 2013 over 2012 rates, the first time the positivity rate for combined national workplace urine drug tests has increased since 2003.

As human resources executives work to implement and maintain drug-free workplaces, additional findings in the analysis offer valuable insights into current trends in workforce drug use:

  • Marijuana continues to be the most commonly detected illicit drug, according to the Quest Diagnostics analysis of urine drug tests. Marijuana positivity in the combined U.S. workforce increased 6.2%, to 1.7% in 2013 compared to 1.6% in 2012. These increased positivity rates are consistent with findings from the 2012 National Survey on Drug Use and Health (NSDUH), which showed an increase in self-reported past-month marijuana use between 2007 and 2012–both among those respondents subject to employer drug testing and those not subject to such testing.
  • Amphetamines positivity continues to increase, continuing a multi-year trend. Combined U.S. workforce data in urine showed a 10% year-over-year increase in amphetamines positivity in 2013 compared to 2012. Of note in the U.S. general workforce, methamphetamine positivity in urine drug tests increased 27%; oral fluid methamphetamine positivity increased by 50%, and the positivity rate in hair testing jumped by 55%, suggesting that the higher incidence of methamphetamine identification in drug seizures by law enforcement is starting to be reflected in workplace testing. Amphetamines positivity rates are now at their highest levels on record and methamphetamine positivity rates are at their highest levels since 2007, across all specimen types.
  • Oxycodones positivity declined for the second consecutive year. Although the rate of opioid prescribing–the amount of opioids distributed and the average prescription size–all increased markedly in the United States over the past decade, the Quest Diagnostics Drug Testing Index report showed oxycodones positivity declined 8.3% between 2013 and 2012 and 12.7% between 2012 and 2011 in the combined U.S. workforce. Four states experienced double-digit declines in oxycodones positivity rates in both 2013 and 2012: Florida, Massachusetts, New Jersey and Ohio. Hydrocodone positivity remained at 1.3% between 2012 and 2013.
  • Despite double-digit increases in marijuana positivity in the two states with “recreational” use laws–Colorado and Washington–analysts at Quest Diagnostics cautioned that it is too early to tell whether the new statutes are correlated with increased positivity. Marijuana positivity rates in Colorado and Washington increased 20 and 23%, respectively, in the general workforce between 2012 and 2013, compared to the 5% average increase among the U.S. general workforce in all 50 states. However, both Colorado and Washington experienced dramatic increases and declines in marijuana positivity rates in the years prior to legalization, suggesting that multiple dynamics are affecting testing results in both states.
  • While the Quest Diagnostics Drug Testing Index report indicates that workforce drug use increased last year, HR managers have a variety of tools at their disposal to ensure safe and healthy workplaces, including vigilant oversight, strong zero-tolerance employment policies, employee drug screening, stigma-free mental health counseling and employee assistance programs. Preventing substance abuse in the workplace keeps employees safer and healthier, and leads to higher productivity, lower costs and a healthier bottom line.

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