Human resources departments are invaluable assets when it comes to protecting companies from potentially devastating losses or game-changing mistakes. All too often, career-ending mishaps could have been avoided with a quick trip to HR, but even the department has occasionally had to learn on-the-job, as it were. After 100 years of HR, you’d think that we’ve learned all there is to know about what companies can, can’t, and really shouldn’t do. Still, here are five lessons that always seem to be a surprise whenever the ball gets dropped.
The Trap of Ignoring Morale
Morale is crucial to working environments. Happy employees are productive employees, after all. When markets move against companies, however, the metrics-based focus of “crunch times” can cause severe loss of focus on this important consideration. As HR, it falls to us to remember to keep the “human” part of human resources in mind at all times. Amazon.com recently found itself under fire for warehouse and worker conditions after metrics-based performance incentives cut the legs out from under the company’s morale. Amazon’s perception in the media and public at large also shifted negatively when word got out about the conditions many workers face in the organization.
The Risks of a Politicizing Company Culture
Company culture can, and often should, change over time. Dramatic shifts, however, should be democratic and involve workers at all levels. When a company decides to make a move that brings it into the political spotlight, it can have repercussions well beyond its own halls. Dan Price, CEO of Gravity Payments, learned this the hard way when he announced a $70,000 minimum salary for his employees. The move thrust him into the spotlight surrounding minimum wage arguments in the nation, clients cancelled their work because of differing political views and lawsuits were filed against the company. This came on the heels of the decision to raise wages for employees by slashing his own.
The Snare of Insider Trading
One of the great cautionary tales of HR comes at the expense of financier Ivan Boesky, who in 1986 made over $200 million investing in corporate takeovers. Unfortunately, his seemingly smart predictions landed him in jail as they turned out to be based on insider trading. HR departments around the world send regular updates to stockholders who may have insider knowledge to help them avoid this type of disaster. Boesky also paid over $100 million in fines for his illegal actions.
The Dangers of Old Buildings
When the real risks of asbestos and its link to mesothelioma were exposed to the public sector, companies poured millions into removing the material from walls, ceilings and other key infrastructure. Unfortunately, removal of the material often freed it into the air, causing workers to inhale the substance and suffer effects years, potentially even decades, down the line. It falls on human-resources personnel to make sure that the right persons are responsible for all disaster and cleanup operations, lest the company be found responsible for damages due to its well-intentioned policies of replacement and repair of worn-down structures.
The Pitfalls of Miscommunication
In the BYOD business world, communication moves at about the speed of light (over optical networks). This means that it’s nearly impossible to bury bad news, especially using press releases of good news. HR and PR departments must work shoulder-to-shoulder to make sure that the press doesn’t feel hoodwinked by a show of good news when bad is developing, as happened when Walmart made its grand announcement about its new $11 an hour minimum wage. Unfortunately, the same day, the closure of over 50 stores became public knowledge. The news about the closure spread quickly, as employees are rarely slow to share such information, and bad press followed closely on the heels of the closure news, offsetting any gains from the minimum wage announcement.
As companies strive to keep top talent and protect themselves against lawsuits and game-changing errors, HR departments are more critical than ever. Savvy human-resources professionals aren’t afraid to speak up against bad policy or advise on important matters, and the best are more than willing to go to bat for the future of their companies. With 100 years on the job, HR pros understand what is at risk and have the tools to keep businesses going strong in the decades to come.