The Southwest Airlines company

Southwest Airlines is fortunately one of the select few large corporations with a successful business model. In actuality, it is the most prosperous commercial airline in the US. With the intention of acquiring additional airlines to broaden the company’s reach into other nations, the business recently bought AirTran Airways, a well-known and successful airline (Southwest.com, 2017). This suggests that Southwest Airlines will be allowed to quickly increase its personnel from the other airlines in a number of different geographic locations.

Although many aspects of the company are projected to be significantly impacted by the change, for the purposes of this study, we will concentrate on human resources. The objective of this study is to consider the ramifications of the merger and acquisitions on the Human Resource and ultimately propose recommendations of how to address the issues. The following is a SWOT analysis of the airline.

Strengths

Strong Organization Culture

The values, principles, and beliefs of the company are incredibly etched in the minds and hearts of the over 46,000 personnel working with Southwest Airlines. Having an aggregate of a warrior spirit, a servant’s heart as well as a fun-loving attitude enables the employees to be entertained, treat every person respectfully without compromising the quality of their service delivery. As Gary Kelly, C.E.O Southwest Airlines reports, this admirable relations with the workforce have made the entity not only severally prized but also earn recognition from many in the zone it provides its services.

A Concrete Employee Base

Southwest Airlines initially had a workforce of approximately 37,000 people. With the recent acquisition of AirTran, the number has gone north to 46,000 and will no doubt surge with the acquisition of other airlines in the future. This increase of employees with different ideologies and work experience as well as skills and knowledge will no doubt continue to make the human resource much more efficient in the day to day activities of the expanded corporation.

Weaknesses

Combining Compensation and Benefits Plans

This proves to be one of the most critical tasks that need to be addressed as a result of the merger. The benefits and compensation plans of AirTran need to be careful, credibly and fairly combined with Southwests in a manner that leaves the staff from both organizations satisfied. Since such plans were collectively bargained with other institutions, it may not be easy to alter the agreements made with the firms without facing legal repercussions. At the same time, the employees may not be fully contented with the changes made (Dowling et al., 2013).

Laying off of workers

Some positions prove to be redundant during the merging of the companies, forcing the Human Resource management to terminate the employment of some competent staff. It needs a lot of skill and discernment to pass the message across in a friendly manner. Such a move usually has a negative effect on their living standards and future incomes.

Dilution of the Organization Culture

People either intentionally or involuntarily take their culture with them wherever they go. AirTran employees plus the additional workers from the different organizations may take a significantly long period to forgo their initial union values and principals and fully adapt the new culture. Coping with the fresh environment may have a tremendous impact on the original workers of Southwest. It can affect their morale, attitude as well as the motivation they initially had. On the other hand, the new employees may feel unwanted, tolerated instead of celebrated, which may lead to turnover. The Human resource department will be faced with an additional critical task of balancing the two.

Opportunities

Diversification

As Southwest broadens its horizons into new regions, it has the opportunity of enjoying the service of workers who are well versed with the cultures of the new markets. Acquisition of airlines while retaining its employees who have a vast experience of not only the region but also the norms, values, and principles of the communities will enhance the acceptability of Southwest in the areas as well as boost its competitive advantage.

Threats

Sudden Increase in Operating Costs

Logically speaking, an expansion of the workforce will have an immediate impact on the costs of running the organization. The Human Resource department will be obliged to cater for the remuneration, benefits, for example, insurance covers costs incurred as a result of the merger and acquisition. Offices may need to be expanded as well. This may in turn force the management to slice some fringe benefits and compensation strategies to break even. The long-time serving personnel may not take the move lightly.

Competition for Labor

The dismissing of competent workers as a ramification of the merger may provide an opportunity for them landing into the hands of competing Airline companies. This gives them the opportunity to use their valuable skills, knowledge, and experience in developing their new organizations into the global standards. This will intensify the competition for Southwest Airlines.

Recommendations

To tackle the above issues successfully, it is recommended that the airline management comes up with a Merger and Acquisition team and choose the most suitable manager to lead it (Lee, 2017). The leader will be solely involved with the merger issues, retaining and motivating key personnel as well as integrating the two organization cultures. Additionally, since employees consider change as upsetting and dislocating, the Human Resource department needs to communicate to them the necessity of the merger, the benefits they will experience without neglecting the need to manage the stress that comes along with the transformation. Decisions also need to be made on the policies and practices to be adopted for union contracts, benefits and compensation plans that will fully satisfy majority of the employees (Unicorn HRO, 2017).

There are some tasks for recruiting and hiring for expansion that Southwest could use. Some of them include Recruitment marketing including online advertisements for the jobs, ensuring job applications fully comply with the local laws, determining a competitive compensation package, conducting the interview process, pre-employment screening and finally recruitment (Silver, 2017).

Some possible metrics to be used in measuring the success of the merger can include a checklist of employee turnover rate, cost per hire, revenue per employee, absence rate, benefit cost, satisfaction, tenure, turnover cost, workers complain per employee and finally the time is taken to fill a vacant position (SHRM, 2017).

Conclusion

Southwest Airlines has been a success for a significant period. With the acquisition of other airlines as well as merging with AirTran, it can only go upwards. By focusing more on the retaining of the culture without compromising the need for managing the effects of the transformation, all employees will feel satisfied, and the workforce will be fully exerted in fulfilling the goals of the organization.

References

Dowling, P. J., Festing, M., & Engle, A. D. (2013). International human resource management. Australia: Cengage Learning.

Lee, R. (2017). 5 Key Challenges HR Faces during a Merger or Acquisition. [online] Blog.careerminds.com. Available at: http://blog.careerminds.com/blog/hr-challenges-mergers-acquisitions [Accessed 11 Oct. 2017].

SHRM. (2017). Scorecard: How can the balanced scorecard be applied to human resources?. [online] Available at: https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/howcanthebalancedscorecardbeappliedtohumanresources.aspx [Accessed 11 Oct. 2017].

Silver, M. (2017). Global Recruiting: Getting Ahead When Hiring Abroad. [online] Recruiting News and Views @ RecruitingDaily. Available at: http://recruitingdaily.com/global-recruiting-hire-job-candidates-abroad/ [Accessed 11 Oct. 2017].

Southwest.com. (2017). What’s New - Southwest Airlines. [online] Available at: https://www.southwest.com/html/about-southwest/whats-new.html?clk=GFOOTER-ABOUT-WHATS-NEW

Unicorn HRO. (2017). Top Ten HR Metrics – Knowing the Numbers and How to Use Them. [online] Available at: http://www.unicornhro.com/articles/top-ten-hr-metrics--knowing-the-numbers-and-how-to-use-them [Accessed 11 Oct. 2017].