Human resource management is a critical and unquestionably necessary part of the operational development of any company, including Southwest Airlines. Ongoing problems associated with internal organizational transformations and increased external pressure from the competition —especially when other companies enter Southwest Airlines’ niche — are inhibiting the corporate value values to which the airline has committed. Reduced social benefits, wage freezes, and a trend toward hiring outsourced workers, combined with the loss of a sense of family business, could lead Southwest Airlines to collapse. The recommended HR strategy proposed to intensify training, ensure full transparency, and re-prioritize management is a great tool to stimulate further economic development even in a squeezed market.
Current HR Strategy
As one of the airline industry’s leading low-cost carriers, Southwest Airlines is under constant pressure from outside competition. In an era of intensified globalization, where travel and business travel are of high importance even despite severe socio-physical constraints relevant to 2020-2021, each of the airlines seeks to gain the trust of as many customers as possible (Baum & Hai, 2020). One of the best strategies to embody this is a price reduction, which is an obvious challenge for companies like Southwest Airlines, whose market advantage is consistently low airfares. The oppression of these pressures, as well as recent organizational transformations, naturally affect current human resource management policies. More specifically, the critical focus of Southwest Airlines’ HR strategy is on employees: recognizing the unconditional value of their contribution to corporate development and ensuring a favorable environment for their social and economic well-being (Southwest Airlines, 2021). The implementation of such strategies is possible through a harmonious combination of effective training technologies, transparent relations between employees and management, and strict adherence to the principles of the firm’s corporate culture. In this regard, it is even appropriate to emphasize that Southwest Airlines has its own Cultural Services Department, which is tasked with taking care of the firm’s corporate values and maintaining and sustaining them through the efforts of employees (Southwest Airlines, 2021). In this regard, it is appropriate to assess Southwest Airlines’ overall HR strategy as being employee-centric.
Nevertheless, the case study shows that the CEO shift that occurred and the increased pressure of external competition were the causes of the current human resource imbalance. More specifically, due to the inability to expand actively, Southwest Airlines has had to tighten patient sick leave management rules and freeze salaries, which are negative manifestations of HR management. In an attempt to maximize financial savings — which is not unethical or shameful for business — Southwest Airlines is even willing to seek outsourcing, according to the study case. However, in such a case, management must understand that hiring outside employees will reduce the integrity of corporate culture and organizational sovereignty in the absence of proper HR policies (Karwacki, 2018). As a consequence, while Southwest Airlines remains employee-centric, it has recently experienced challenging times, leading to a sense of loss of the family unity that previously existed within the company.
The deep focus on employees, combined with maturing problems of an organizational nature, has serious implications for Southwest Airlines, developing in both positive and negative ways. First and foremost, the tendency to maintain employee well-being, strategic relevance and engagement in operational management has a favorable effect on the firm’s overall performance. Since employees find themselves interested in meeting the plan and improving their performance — for which the company has a built-in financial motivation program — this increases the quantity and quality of work performed, and thus the company as a whole becomes more profitable. On the other hand, according to the case study, Southwest Airlines is characterized by some oppression, or possibly temporary, of employees’ financial and personal interests, expressed through a wage freeze and the creation of stricter discipline for dealing with illness cases. The likely consequence of this oppression is a lack of employee interest in achieving meaningful business results and a consequent general decline in productivity. An employee who knows for a fact that their salary will not be higher or lower than the frozen value is hardly willing to volunteer to add value to the company and seek career development. At the same time, not providing sick benefits has a negative consequence for maintaining trust in leadership at the company since it inhibits previously supported values of concern for the socioeconomic well-being of employees. Finally, the third consequence is the choice of outsourcing strategy discussed in the case study. When a company cannot hire new employees for the sake of financial savings, internal corporate sentiment is affected. Delegated employees are not a party to the employer’s corporate values, and the lack of aligned relationships between current employees and delegated employees can create an interpersonal divide.
Business Strategies for Managing the Impact
While employee-centricity should be supported and encouraged as a strategic priority, dealing with negative consequences should be seen as critical. In particular, Southwest Airlines needs to review the current hiring process and take care to maintain a holistic culture in an outsourced contracting environment. This can be done either through a conscious rejection of such practices to allocate funding to find new physical employees or by integrating outsourced workers into Southwest Airlines’ culture through, for example, video calling, virtual conferencing, and Zoom (Sardana, 2019). At the same time, Southwest Airlines must conduct outreach to explain the need for temporary wage freezes and benefit cuts. Transparency, trust, and honesty should be critical parameters in implementing this strategy. Without these leadership traits, Southwest Airlines is guaranteed to lose the trust of its employees and eventually find itself in crisis. In the context of employee-centricity, training and motivation programs for current employees should be supported and actively invested in, as this is a sound human resource retention strategy.
Overall HR Strategy
Based on the above reasoning, it is appropriate to form a unified and formalized vision for a new HR strategy that would be an excellent solution for Southwest Airlines’ current agenda. Thus, it is essential to ensure a complete focus on employee well-being and to eliminate — or explain the need for — current policy weaknesses. This should be accomplished through intensified training programs not only in professional skills but also in soft skills, including a commitment to corporate culture. It is necessary to make sure that each employee understands their contribution to the company and is ready to take personal responsibility for its development: this can be accomplished through soft audits of employees, which will additionally collect their opinions and views regarding corporate development. Plans to cut benefits and freeze salaries should only be considered as a temporary measure, and it should be made clear to all employees that this move is critical to keeping the company going. Moreover, employees will want to know what they will receive in the future for their trust and patience now. Finally, the outsourcing policy should be reviewed to prioritize. It is essential to understand what is more important to the company in the short and long term: saving money or maintaining a cohesive organizational culture.
Baum, T., & Hai, N. T. T. (2020). Hospitality, tourism, human rights and the impact of COVID-19. International Journal of Contemporary Hospitality Management, 32(7), 2397-2407.
Karwacki, L. (2018). How company culture impacts outsourcing partnerships – and what you can do about it. Sunscrapers. Web.
Sardana, A. (2019). Top 5 outsourcing challenges and how to overcome them. Classic Informatics. Web.
Southwest Airlines. (2021, n.d.). Culture. Southwest Careers. Web.