CrowdStrike Outage Proves HR's Need for Payroll Continuity Planning

Recent news has shown business leaders, and particularly human resources professionals, the importance of a solid business continuity plan. On Friday, July 19th, 2024, CrowdStrike pushed a patch update that went disastrously wrong.  

As HR, you know what Friday is for many people—payday. If your organization went unpaid due to the CrowdStrike outage, you’ve been hearing the complaints already. And not just from unpaid workers, but from your IT and computer technicians who had to reboot and fix machines individually to get the business back up and running.  

So, let’s discuss what happened and how a small HR team (or HR Party of One) can plan for the future to manage business continuity should something similar happen again.    

Understanding the Impact of the Crowdstrike Outage

Crowdstrike, a leading cybersecurity firm, experienced a significant outage that disrupted services for many businesses. Do you know how long the update was live? 

78 minutes.  

Only 78 minutes and millions of businesses worldwide were unable to do anything requiring the use of a screen. I myself was in the airport at 6 A.M. that morning and wondered at the news crews reporting on the lines for Delta, Allegiant, and other airlines (I was Southwest which was unaffected, thankfully!). All the screens in the airport were bluescreened, indicating a loss of function.    

The impact was far-reaching and disastrous: any businesses using Windows 10, ranging from Mom and Pop Shops to Fortune 50, were effectively dead in the water. No bank transactions, flight schedules, dispatch communications, nothing.  

This incident exposed the reliance on digital solutions for everyday operations and highlighted the cascading effects of service disruptions. It will be years before claims against CrowdStrike are managed and businesses can fully recoup major losses. However, federal governments are already in the process of investigating major corporations that failed to recover in a timely manner. 

Delta Airlines is already under investigation by the United States Secretary of Transportation, Pete Buttigieg, and could face major fines and setbacks as hundreds of thousands were left stranded all over the globe for up to a week. Many were left without their luggage, accommodations, food and drink, or a confirmed timeline for when they could get home. 

For HR professionals, the outage posed immediate challenges in accessing critical data, processing payroll, and ensuring compliance with labor laws. People couldn’t receive direct deposits, clock in and out, and more.  

While not all businesses were affected, it’s highly likely a company closely related was affected, and the ripple effects are still spreading. Even though my airline was technically not affected, the massive amount of delays for other airlines set back Southwest by hours as well, not considering the stranded passengers flooding to buy Southwest tickets. The same concept applies in all industries—setbacks to one major carrier will lead to problems for others.  

How Can HR Anticipate CrowdStrike’s Outage to Impact Businesses? 

First and foremost, you can (and may have already) had conversations with overworked and stressed IT professionals that helped you get systems running smoothly again. Lean into the specialists—bring their expertise with you to the big conversation with leadership about business continuity. 

Right now, your best plan to handle any sort of similar system failure (like a meteor strike, sun flare, OS collapse, etc.) is to have a contingency plan for how to keep critical processes going.   

Business continuity planning involves preparing for unexpected disruptions to ensure that critical business functions continue with minimal interruption. For HR professionals, especially those who are an HR Party of One, this means having strategies in place to handle payroll and compliance issues even when systems fail. Let’s look at some basics. 

Key Components of a Business Continuity Plan for HR:

1. Data Backup and Recovery: Regularly back up payroll and employee data. Ensure that backups are stored securely and can be accessed independently of your primary systems.  
   
   
2. Alternative Communication Channels: Maintain up-to-date contact information and establish alternative ways to communicate with employees during outages. It’s not feasible to send everyone a walkie-talkie, but check that employees understand the protocol for accessible lines of communication in case of an emergency or outage.  
   
   
3. Manual Payroll Processing: Develop a manual payroll processing protocol to ensure employees are paid on time, even if digital systems are unavailable. Nurses at hospitals worldwide had to resort to paper charting to ensure their patients had adequate care. In some countries, airport agents wrote boarding passes by hand.  
    
   While the best practice for compliance and accuracy is to have payroll online, a backup is never a bad idea.  
   
   
4. FLSA Compliance: Keep hard copies of essential compliance documents and employee records to ensure adherence to Fair Labor Standards Act (FLSA) regulations during disruptions. You should have workplace posters in visible areas already, but it doesn’t hurt to have printed versions of continuity plans, Culture Guides, and more in a safe place. 

Payroll Continuity: A Critical Concern for SMBs

For HR professionals, payroll is one of the most critical functions. Employees depend on timely and accurate paychecks; any disruption can lead to dissatisfaction and financial difficulties. The Crowdstrike outage serves as a reminder to evaluate and strengthen payroll continuity plans.

Steps to Ensure Payroll Continuity:

1. Redundant Systems: Invest in backup payroll systems that can be activated if your primary system fails. 
   
   
2. Cross-Training: Train multiple employees on payroll processing to ensure continuity if the primary payroll administrator is unavailable. 
   
   
3. Third-Party Payroll Services: Consider partnering with a third-party payroll provider that has robust continuity plans and can take over payroll processing if needed. Utilize cloud-based solutions that offer greater flexibility and accessibility during disruptions. BerniePortal’s team was on top of making sure payroll was run for all our clients. 

The Role of Small HR Teams in Business Continuity

Small HR teams, often consisting of just one or two people, face unique challenges in ensuring business continuity. These professionals juggle multiple roles and responsibilities, making it essential to streamline processes and leverage technology to their advantage.

As an HR Party of One, you are the backbone of your company's HR operations. The Crowdstrike outage illustrates the importance of being prepared for unforeseen events. By developing and implementing a robust business continuity plan, you can ensure that critical HR functions, including payroll, continue uninterrupted.

Additional Resources

You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources:

• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• BerniePortal Blog—a one-stop shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• Resource Library—essential guides covering a comprehensive list of HR topics
• HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics
• Community—the HR Party of One Community forum, a place devoted to HR professionals to ask questions, learn more, and help others