Reason and Solution to Staffing Issues at Uber Research Paper

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Staffing Issues at Uber/Reason and Solution to Staffing Issues at Uber

Problem Recognition

Action Plan

Strategic Human Resource Management explains the purpose and strategies that an enterprise leverages, to accomplish objectives through individuals. It incorporates that human capital is a prominent source to have competitive advantage in a market. Besides this, it defines the role of individuals who would execute the strategy by delineating the course of action in a well defined manner (Mello, 2015).

Keeping the above in mind, different statements have come forward regarding the staffing of Uber, which is facing problems in that particular area. According to Gary Chaison, an industrial relations profession at Clark University, a driver at Uber is not an independent contractor but an employee of that company. However, California to Washington regulators is still trying to discern when a person becomes an employee of an organization who relies on temporary hires and contractors. There is an ongoing debate on this matter which affects the companies' financial consequences including new ones like Uber Technologies Incorporation which is based in San Francisco. Companies who rely on temporary hires do not have to provide for Social Security or minimum wages. Jessica Santillo, Uber spokesperson, states that this decision contradicts the rulings of five states where it was concluded that the drivers are contractors and not employees. Uber also faced many lawsuits which stated that the drivers of the company should have legal protection (Synder, 2015).

Problem Recognition

Knowing the root of the issue and making distinct strategies to overcome those issues is highly essential for a firm (Mello, 2010). And, San Francisco-based U.S. transport company, Uber is primarily engaged in all operational aspects. However, drivers hired by the company are not given autonomy enough so as to be regarded as independent contractors, as per a decision announced on the 3rd of June; this came to light when the company appealed at the Superior Court of San Francisco, when a labor representative declared that Barbara Berwick, a driver who was employed for a duration of two months with the company in the year 2014, was owed business expenses worth 4,152.20 dollars by Uber. The company, therefore, is currently being confronted with a number of legal obstacles and difficulties with regard to its contractor-based model of operations, squarely constructed on insistence on Uber's part that it doesn't play the role of a transport service -- it is nothing more than a mere intermediary between drivers and clients requiring transportation. For the drivers who are on independent contract, Uber holds no responsibility and will not pay for the expenses incurred by drivers, in the form of vehicle maintenance and gas, when working for the company, nor will they be eligible for obtaining employee benefits in the form of vacation time and health insurance coverage (Huet, 2015). Apart from the above quandaries, Californian district attorneys are reported to have slammed the company's background checks, claiming that they are incompetent in identifying and rejecting drivers having prior records of criminal activity (Economic Times, 2015).

According to a Los Angeles-based lawyer, Jaia Thomas, if the decision escalates to directly challenge the company's legal capability of grading the drivers working for it as independent contractors rather than Uber employees, this may result in a costly process of policy change. Independent contractors, unlike company employees, have to finance their own medical and other insurance policies, and taxes; they are also not entitled to receiving compensation for overtime. Thomas asserts that, in the state of California, all hours worked beyond the standard 8 hours per day are taken under overtime. At present, if the drivers working for Uber work long shifts, the company is not obliged to give them extra wages. Uber's tactic of not considering these drivers as company employees, altogether leads to great cost- savings for the company. This strategy saves Uber the cost of paying for expensive benefits such as healthcare and Social Security. Uber has about 160,000 drivers across the nation -- if it has to acknowledge such a larger number of individuals as employees, the company's profits may be swiftly gobbled up (CNN Money, 2015). Additionally, supposing it loses its appeal at the Superior Court, Uberwould be coerced into altering terms for existing drivers, making newly hired drivers sign contracts clearly prohibiting them from filing a suit against the organization on grounds of eligibility for benefits and expenditure reimbursement (Entis, 2015). Further, this would force the company to make sure drivers, as employees, are granted no less than the minimum national wage, and ascertain that they are taking sufficient breaks and abiding by legal norms in case the drivers come up with any complaints regarding the company.

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UK organization, GMB asserts that drivers, currently, often find that they are suspended or disengaged from their job if they happen to make any complaints regarding unfair treatment towards them by their organization (Woods, 2015). To put it simply, Uber only bears the cost of some one thousand or so individuals (who are categorized as employees) at headquarters. The company obtains a percentage on all rides. Drivers aren't employed by the firm -- Uber only links demand (drivers, who have consented to partnering with Uber, and who drove the area) to supply (requests by users on Uber's app).If Uber has to change its operational policy, the company will no longer remain a logistical firm or profitable software. There would be a skyrocketing of operational costs, and the firm would be forced to considerably cut back on the amount of partner-drivers, while providing benefits to all who remain (Shontell, 2015).

Flexibility of drivers would be lost if Uber has no option but to reclassify them all as company employees and not independent contractors -- the company recently made this claim in association with a controversial lawsuit currently in progress. This would give rise to challenges with regard to matching demand with supply (ensuring that sufficient drivers are on hand when there is demand for their services). This necessitates increased rigidity in scheduling and so forth. Integral to the problem is whether drivers working for Uber must be categorized as employees or independent contractors. If they are put into the former category, company costs in the form of tax disbursement would rise; Uber would also have to provide them with benefits such as workers' compensation, while covering vehicle-related expenses such as maintenance and gas. This would obviously impede its 51 billion dollars valuation, in addition to establishing an example for other startup companies modeled on the alleged 'on-demand economy', in which workers don't have access to benefits typically accorded by a majority of companies. Santa Clara University's Professor of labor law, DonPoldenstates that, if the people working for a company are employees rather than independent contractors, it needs to have payroll services and a human resource department, whose roles are ascertaining hours worked and ensuring compliance with hours and wage laws. He further asserts that delivery of these services gets complicated if there are people doing only 1-2 hours per week. An additional large cost that has to be borne by the company is health care. After the number of full-time employees of a firm crosses 50, the company must do either of the two- purchase health insurance for employees, or subsidize health insurance purchased themselves. In case a company employee's work hours are 40 hours in one week, followed by only two in the subsequent week, the firm is put in a difficult position of providing the benefit of health insurance, in spite of not receiving any appreciable benefit, in turn, of a full-time employee's services. For offsetting the expenses, the firm, possibly, would go for shift-scheduling, while prohibiting workers from serving other firms. Elimination of flexibility makes absolute business sense, if Uberhas to incur extra costs because of reclassification of workers as employees (Amicis, 2015).

Action Plan

Win Lawsuit

If Uber does not want to face any kind of loss, it is important that it wins the lawsuit that is filed against the company. However proper preparations for lawsuit takes time for which the company has to make itself available for the discussions with the attorney which includes working on preparations, discovery, trial and depositions. A lawsuit consumes a lot of time and energy of the people who are involved in it; so it is important that Uber wins the lawsuit to maintain their position (Find Law, 2015b).

Hire Carefully

Hiring should be done carefully because the employees are different from contractors. The HR department of the company should work on investigating the background of the contractor because proper records are required to be kept by the company. A company with employees carries out all the background checkup and records of their employees, which makes it a safe place to work while an independent contractor might have a criminal background which might cause problems for the company itself (Lewis, 2012).In short, company should make sure it has right employees with right capabilities at right place as well as time (Mello, 2010).

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