A new survey shows that only half of European firms have a crisis plan in place in spite of the significant financial and reputational benefits of crisis preparedness.

The study by public relations and communications consultancy Burson-Marsteller, found that, although 60% of business decision-makers have experienced a crisis – more than half in the past year – only 53 percent currently have a crisis plan in place.

The survey also found widespread agreement among business leaders that the uncontrollable and uncertain nature of a crisis means it poses significant threats to a company’s reputation. A business that is well prepared can save nearly a third of the average cost of overcoming a crisis compared to a business which is not prepared, partly because the average recovery time is two months shorter (an average of seven as opposed to nine months).

“This new study shows that crisis preparedness directly affects a company’s bottom line,” said Jeremy Galbraith, CEO of Burson-Marsteller Europe, Middle East and Africa (EMEA). “In an age of uncertainty, with increasingly complex stakeholder arenas for corporations and the speed of events driven by digitalisation and globalisation, crisis preparedness is more important than ever.”

One of the findings of the survey was that businesses without a crisis plan can expect to be harder hit in terms of loss of revenue and layoffs than companies that are well prepared. Other consequences of crises can include falling share prices, loss of corporate reputation, loss of media and/or public trust and law suits by individuals or groups.