Human Resource Management Issues in a Newspaper Article

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Identification of Main Human Resource Issues

Emma Goldberg’s article titled ‘Better.com, a mortgage lender and early pandemic winner announces more layoffs’ mentions various human resource issues that will have an effect on stakeholders. Employee downsizing/layoff is a key issue that emerges in the article. Another issue that comes off clearly from the article is treating employees with respect. Severance packages and other forms of support is an issue that arises clearly in the article. Communication is also an issue of interest that arises in the text. Resilience building and future plans assessment is another important issue in the article.

Article Summary

In summary, Emma Goldberg’s article follows Better.com, a leading mortgage lending company in the United States. The article dated March 8th, 2020, mentions that Better.com plans to lay off over one-third of its employees. This comes three months after the company’s Chief Executive Officer fired over 900 employees during a Zoom call, an act that sparked public outcry. Better.com has more than 9000 employees across India and the United States. The company quadrupled in size during the pandemic after hiring aggressively as mortgage rates were low and the online lending market was expanding significantly. However, of late, the company has been struggling because the real estate market has become unstable and the expected increased interest rates that are set to be announced by the Federal Reserve in the course of the month. In an email drafted by the interim president, the company said that it needs to take the difficult step of laying off employees to streamline operations and reduce workforce substantially in India and the United States. The article takes note of the fact that the organization’s layoffs have been turbulent. Some of the staff that was laid off in December were not communicated to in advance. They only found out after they were locked out of their accounts. But this time around, the employees said they noticed severance in their salaries before being communicated to officially. Better.com said that they had not intended for such kind of notification, but the goal was to ensure that all affected workers received timely severance packages. A former senior underwriter who was laid off in December noted that the disorganized layoff approach had contributed to increased anxiety following the termination. She had missed the Zoom call invitation where employees had been laid off. She confirmed being laid off in a subsequent call and following up with her manager. Considering that employee layoffs are emotionally difficult, there is a need to employ an organized approach because an insensitive approach tends to make the process even more difficult.

Explanations of Main HR Issues

As mentioned above, various human resource issues arise from Emma Goldberg’s article. Employee layoffs are often a time-tested way of reducing organizational costs because cutting down on staff has a substantial and immediate impact on the company. This is because the cost of compensation and benefits accounts for up to half of the company’s operating expenses. It is only natural that companies will focus on reducing employees to cut down on expenses. Various conditions such as national recession, natural disaster, technological changes, company failures, mergers and acquisitions, and industry decline necessitate layoffs (Brown, 2018). Additionally, when laying off employees, it is paramount that the employer treats them with respect. We have come across horrifying lay-off stories of employees arriving at work only to find their belongings in a box and security personnel waiting to escort them outside. What is worse, some employers go to the extent of changing locks or terminating employees via email. It is imperative that managers treat all employees with respect and protect their dignity even during layoffs. Each staff member deserves a confidential meeting with their supervisor and an opportunity to ask questions and get information on transition in writing and verbally (Mikkelsen, Jacobsen, & Andersen, 2017). The news should be delivered with compassion and kindness, seeing that layoffs have a compounding outcome on the family on their future. Severance packages and other forms of support are equally important during employee lay-offs. The separation package comes in handy, although the cutbacks are often fiscally based. The financial benefits give employees something to fall back on. Employers can also develop a redeployment plan for the affected workers. Candid communication is also important as it avoids rumors that tend to be more damaging. The status of the organization’s finances and future are important bits of information that all employees should have. If management does not take control, rumor and fear tend to rule them and influence them negatively. Transparency is a key in the layoff process. Employers should make an effort to support those in transition and those that will remain. Resilience building is a critical aspect for layoffs. The company should consider realigning its processes, people, and structure. They should develop a clear plan that will push the business forward. Talent engagement and retention should be a priority. Building company resilience is attained by assisting employees in getting through difficult times and coming up with initiatives that will assist them in developing skills that will profit the individual and the company in the future. Before taking the step to lay off workers, employers should examine the long-term effect of the move for the business. Human resource managers should evaluate the company’s future and ensure that the goals, strategies, and roles align. Organizations must realize that the sooner they speak to the future, the sooner they will recover.

Implications of HR Issues on Stakeholders

The human resource issues ranging from employee layoff, poor communication, treating employees with disrespect, lack of severance packages, and lack of resilience and future plans can have a dire effect on the business itself, the employee, and members of the public. Some of the consequences of employee lay off on the business have to do with employee productivity, low job satisfaction, and even sabotage lawsuits. When employees reduce, the employees that remain tend to suffer increased stress levels linked to stress and burnout (Trevor & Piyanontalee, 2020). They will have to deal with a high workload to compensate for the workers that will have been laid off. This can prove to be difficult because they are not used to dealing with a high workload. This can push them to suffer burnout, which reduces their morale, trust, and job satisfaction. Additionally, the managers are likely to notice perceptual changes pertaining to turnover, including the reduced willingness of staff members to work with one another and poor job and company performance by extension. Layoffs also have an immense effect on the members of the public. The public tends to develop a negative attitude towards companies that cannot retain employees. It appears as if the company is suffering from leadership problems at the board and other managerial problems. Moreover, suppose the company is seen to lay of minority groups such as women and people living with disability. In that case, it may have a negative image on the entire company on the members of the public. Additionally, one effect of treating employees with disrespect is that the same tends to be easily transmitted to the rest of the employees. When employees are treated with disrespect, they will have no problem treating each other in a similar way, creating a toxic workplace (Shin & Alam, 2022). When employees are not granted a severance package during layoffs, the company is likely to find itself at odds with the law. Severance packages tend to soften the blow for employees that are laid off irrespective of whether a termination was voluntary or involuntary. When there is proper communication about the laying off employees, unnecessary conflicts and mistrust arise. It creates room for a broken culture, missed opportunities, and lack of morale for the remaining employees. When a company does not make an effort to build resilience and come up with sturdy future plans during employee layoff, the company is likely setting itself up for failure. Resilience mechanisms ensure that the remaining employees stay the course even after some of their colleagues have been laid off.

In closing, the article teaches various lessons on matters pertaining to employee layoff. One of the most important lessons I that while laying off employees has become a standard business practice, there is a need to follow proper channels and due process while firing workers. Employee lay-off has immediate repercussions for the employees’ families and their future. Employers should always offer severance packages to help ease their burden. Nobody wishes to wake up and get laid off from their work. The employer should also equip the employee with the necessary information about the company finances so that they can understand the decision to fire them. While employee layoffs can help companies get back on their feet, companies should not ignore other cost-reduction solutions that can be explored.

Article Link https://www.nytimes.com/2022/03/08/business/better-mortgage-lender-layoffs.htmlReferences

Brown, G. K. (2018). Severance Benefits: An Overview for Family Law Practitioners. Fam. Advoc., 41, 26.

Mikkelsen, M. F., Jacobsen, C. B., & Andersen, L. B. (2017). Managing employee motivation: Exploring the connections between managers’ enforcement actions, employee perceptions, and employee intrinsic motivation. International Public Management Journal, 20(2), 183-205.

Shin, D., & Alam, M. S. (2022). Lean management strategy and innovation: moderation effects of collective voluntary turnover and layoffs. Total Quality Management & Business Excellence, 33(1-2), 202-217.

Trevor, C. O., & Piyanontalee, R. (2020). Discharges, poor-performer quits, and layoffs as valued exits: Is it really addition by subtraction?. Annual Review of Organizational Psychology and Organizational Behavior, 7, 181-211.