Management Consulting/general management
Company Social Responsibility & AIDS
The AIDS epidemic today is unparalleled in the challenges it poses to the world, and it is clearly an
issue that no one can address alone. Business is an essential partner in the response to AIDS. The
private sector like the other sectors is not immune from AIDS. Involvement of the private sector in the
response to HIV/AIDS is crucial to the success of our country's efforts against the epidemic.
1. What is the impact of AIDS on businesses? Do you agree that businesses in the near future would
be actively interested in addressing the issue of AIDS? Justify your answer
2. ABC Corporation wants to partner with an NGO and address the issue of AIDS around its factory,
discuss what steps should ABC Corporation take to initiate, manage and sustain its partnership
with the NGO .
The impact of HIV/AIDS on business
Increasingly, businesses are becoming aware of the impact HIV/AIDS will have on their profitability; in some cases, it is an awareness that is long overdue.
Initially businesses viewed the HIV/AIDS pandemic as a medical issue that concerned only the so-called "high-risk" groups.
Now, however, it has become a much broader threat to communities, businesses and the economy. Those affected include women, children, agricultural and industrial workers, technicians and civil servants at all levels. What should also not be forgotten is that where a worker might not be HIV-positive, if one of the family is, this will almost certainly impact on the worker. Concerns about the family member, costs to the worker and hence lower morale, pre-occupation with family issues, absenteeism as a result of having to attend to the family member's needs
all of these and more will impact on the worker's productivity.
Businesses, organisations and governments have generally embarked on information or educational campaigns to reduce the amount of risky behaviour by the target audiences, and typically these campaigns include billboards warning against risky behaviour or brochures describing the medical and epidemiological aspects of AIDS.
The trouble is, the messages are often threatening and stigmatizing, and they sometimes fail to include basic information: Go and be tested' people are told - but they are not told where to go for the test. They are also not told what the test involves - so the person seeing the poster doesn't know whether the test will take some time, be painful or not and so on.
In other cases, depending on the social and religious mores of the community, the use of condoms, for instance, might not be mentioned.
The end-result is that these strategies sometimes reinforce the stigma HIV-positive people face in their community and workplace.
It is clear therefore that a "one-size-fits-all" approach is not effective and a far more targeted approach is required.
People fear the disease because often they are ignorant of what exactly it is and what impact it has. Furthermore, since other members of the community are known to be hostile to those with the disease, the ignorance and fear is combined with denial firstly that the individual in question will become infected, and if he or she already suspects they are infected, they will deny their condition and refuse to be tested which will confirm it.
A key to changing how people behave is by creating a far more enabling, tolerant and less threatening situation comprising confidential testing, counselling and care. Where a more sympathetic and empathetic approach is taken, people will tend to make more use of what the programs offer.
It is in the message
In Botswana, for example, the Botswana Network of People Living with HIV and AIDS encouraged people to be public about their HIV status through special events like the 2006 "Mr. Positive Living Pageant", which puts a very different emphasis on the pandemic and those who are HIV-positive.
Business can play a substantial role in such programs; in fact, business must play an active and substantive role in promoting AIDS awareness and associated programs with positive messages that encourage workers to come forward
With 12 to 25% of workers HIV-positive the annual cost can be between half and up to three-and-a-half times the worker's annual salary - and that will have a massive impact on the bottom line,' he said.
Direct costs can include impacts on insurance, retirement funds, health and safety, medical insurance, recruitment costs for new staff advertising and training, for instance, HIV testing for new and existing staff and funeral costs.
Indirect costs include absenteeism, staff churn, loss of skills, loss of tacit knowledge, and a decline in worker morale.
All of these add up to major costs and a loss in productivity.
Typically, a timeline study of how the pandemic will affect a workforce would follow this pattern:
0-7 years workers are outwardly healthy and fully productive: no cost to company
7-9 years illness begins to manifest itself in some workers: company begins to incur costs associated with illness
9-10 years employees leave or begin to die: company incurs end-of-service costs
10+ years company incurs recruitment, training costs, suffers loss of efficiency and productivity, as new workers get up to speed'.
The Effects of HIV/AIDS on Business
HIV/AIDS will have an increasing impact on businesses. One of its first impacts is that it increases operational costs. As employees become sick the cost of providing health care rises. Death benefits increase, and recruiting and training costs grow as the company tries to replace lost personnel. At the same time, it reduces company income by lowering worker productivity and increasing absenteeism.
Uncontrolled, HIV/AIDS will also damage businesses in ways that are harder to quantify. One of the epidemic's most damaging features is its impact on morale. HIV/AIDS usually affects people who are young. Watching increasing numbers of colleagues die before their time is depressing and difficult. Often, workers are afraid of colleagues who are infected, not least because they fear they too might be affected by it. The result is an atmosphere of tension, suspicion, and recrimination within the workforce.
This loss in morale is not, however, inevitable. Even with an increasing number of infected and affected workers, proactive businesses have been able to discuss HIV/AIDS issues, reduce the stigma associated with infection, and ensure that workers remain productive.
AIM-B is an economic and demographic model designed to help companies analyze how HIV/AIDS is affecting their business and how it will affect them in the future. The model can help to develop estimates of prevalence of HIV and AIDS within a workforce, and project how it will develop over the next decades. It can also model how the costs of health care and benefits will be affected over the coming years.
The following interactive on-line questionnaire represents a small part of AIM-B and gives businesses an indication of the financial impact HIV/AIDS is now having on their business each year. A more comprehensive analysis of HIV/AIDS current and future impact is available from Constella Futures, which also advises businesses on how to analyze and manage the risks of HIV/AIDS, and to launch effective, sustainable prevention and care programs.
How To Use AIM-B
This model is designed to help human resource managers and medical personnel assess the effects of HIV/AIDS on particular sections of the workforce.
The model works by calculating averages within particular groups of employees. You may choose to input data for the entire workforce within a particular country. However, wage levels, benefits and recruitment costs often vary greatly between different sections of the workforce so you may prefer to calculate averages within particular sub-sections, such as managers, skilled workers, or unskilled workers.
You may find it necessary to repeat AIM-B several times for different groups of employees until you build up a complete picture of HIV/AIDS impact on your workforce.
How many of your employees may be infected with the HIV virus?
This section asks you to estimate how many people within a particular group of employees are likely to be infected with HIV. As we explained above, the group may be the entire workforce of a particular country, or sub-sections such as 'managers' or 'unskilled workers'.
You may have some indication of prevalence in your workforce from company records or local research. If not, the pull-down list gives the averages within particular countries. These averages are based on UNAIDS estimates from 1999 and apply to the general population aged 15 - 49. It is important to note that prevalence within particular workforces may differ from that found within the population as a whole. In many cases, for example, high-income, urban males have higher-than-average rates of infection with HIV. Thus, these estimates should be seen as a guide only.
You are then asked for the average annual salary of the workers in the chosen group.
How many workers are in the group you wish to analyse?
What is the average annual salary of this group?
Type of currency
What percentage of your workforce do you estimate is infected? Enter percent:
If you can't estimate the prevalence of HIV at your business, please select the country in which your workforce is based.
HIV/AIDS is an unusual chronic disease because its impact is greatest on young adults in the most productive years of their life. Most people who die of AIDS-related illness die in their late 20s and 30s.
As HIV+ workers become sick and die, the costs of finding and recruiting new staff will begin to escalate. This section asks you to think about how much it costs to recruit a new employee. Your estimate should include:
Costs of advertising for new staff
Agency fees (if appropriate)
Staff time spent selecting and interviewing candidates
'Down-time', when the vacancy isn't filled
Administration to fill the post
What is the total cost of recruiting a new worker?
Leave blank or enter numbers only (no spaces, commas, text, etc.)
Once recruited, how much does it cost to train new employees? Your estimate may include some or all of the following:
Fees to external trainers
Associated costs (travel, lodging, hire venue, etc.)
Lost output during training (note: include lost output for trainers/supervisors as well as trainees)
What is the total cost of training a new worker?
Leave blank or enter numbers only (no spaces, commas, text, etc.)
What is the total cost to the employer when an employee dies? Your estimate may include all or some of the following:
Death benefits payable to the deceased's family
Transport to the funeral for workers and their families
Compassionate leave for co-workers
Transport of the body to the family home
Total cost payable?
Leave blank or enter numbers only (no spaces, commas, text, etc.)
A person who becomes infected with HIV can remain productive and healthy for many years. Some people have been living with the virus for as long as 20 years.
When a person develops AIDS, their immune system becomes compromised and they begin to fall sick from opportunistic infections (e.g., TB, herpes, etc.). The length of time a person will live after developing the symptoms of AIDS varies from case to case. However, on average, people live for one year if opportunistic infections go untreated.
What do you estimate is the current additional cost to the company of health care per individual HIV+ worker. You may know this from your existing records. If not, you could develop a broad estimate based on the costs of treating a package of two or three common opportunistic infections, such as TB.
If you do not have this information leave it blank, the model will still make other projections without this information.
Additional cost of health care per AIDS case?
1. Motivation for action
In the mid 1990s, THE company observed the
rapid spread and impact of the HIV/AIDS epidemic in parts
of Asia, and
the company recognised the threat it posed.
Through their approach to business, The company believe that they have a responsibility to the
communities in which they operate. Therefore, they
sought to raise awareness of HIV/AIDS amongst their
customers and to engage them in the response through
inner circle campaigns.
2. Business response to HIV/AIDS
Initially the company has been running
HIV/AIDS campaigns around World AIDS Day, primarily to
raise awareness of the disease and to break down
stigmatisation and discrimination of people living with
HIV/AIDS. The approach has been to make use of their
human resources as a mechanism for providing HIV/AIDS
campaigners with an outlet for information dissemination,
while minimising additional costs. The company
has taken the campaigns into its stores with the aim of
integrating HIV/AIDS into every day environments.
surrounding the issue of HIV/AIDS, such as sex and
Each year the campaigns themselves have focused on
different HIV/AIDS issues and organisations, at an annual
cost of around 1.4 million :
then , The company partnered with a local
NGO, HIV and Human Rights Information Centre, a
local organisation that supports people living with
HIV/AIDS. The company donated 2% of the sales of one
product to the NGO and distributed to customers free
condoms and HIV/AIDS information that was provided
by the NGO.
the campaign focused on drawing attention to
the global pandemic by providing global information
from UNAIDS to its customers. In addition, they
collaborated with Levi Strauss to create and sell
T-shirts with an HIV/AIDS message, donating profits to
an NGO .
supported an NGO
working with people living with HIV/AIDS by trading
the NGOs teddy bears which had information tags
attached to assist in raising awareness about
discrimination. In addition they sold T-shirts and red
ribbon badges, donating profits to the HIV and Human
Rights Information Centre.
3. Results and lessons
The cause-related marketing activities (T-shirts, red
ribbons, Japan-specific products) were highly successful in
generating public awareness for the campaigns. There
were also reputation gains for the company on a topic
that is now being legitimised as an important issue,
especially amongst the young.
The company also identified benefits to their
employees, through observed improvement in staff
morale and productivity through involvement in the instore
campaigns. They also held workshops for all store
managers to raise the level of understanding of HIV/AIDS,
which had the effect of convincing many of them of the
importance of such close involvement. In addition,
The company recognised from experience that the
use of simplified and concise HIV/AIDS information is
important if both customers and staff are to be engag ed.