A recent Bloomberg article claims that WeWork employees have complained about being mistreated. This is not news to us.
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“The company has been beset by a growing number of allegations over unfair pay, miscategorization of workers and other forms of employee mistreatment. Some of these have resulted in legal disputes, and now the company is under scrutiny by state and federal authorities.”
And although “company executives say they’ve since raised pay and clarified job roles”, it seems that WeWork is still unable to get community right. At least as it pertains to its internal, staff community.
Bloomberg reported that it spoke with more than a dozen former WeWork staff members, and although WeWork has revised its employee handbook** and started giving out non-monetary incentives to its ‘community managers’, employee and management issues continue to haunt the coworking giant.
A Pattern of Continued Negligence
Although some of WeWork’s legal battles with former employees have been settled, a third former employee told Bloomberg recently that “she’s planning to file one (lawsuit) soon”.
WeWork is not doing this on purpose. Quite the contrary, it seems to be that it simply cannot control its own rapid growth, and that’s leading to employee dissatisfaction.
“They (WeWork) acknowledged that rapid expansion left community staff working hard without much guidance or proper training…”. But the issue wasn’t just lack of guidance or training; neither was it the fact that employees were expected to work overtime.
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“Former community staffers said they gave office tours and hosted events at the space.” (We can all agree these are regular community manager tasks.) But they also spent much of their time brewing coffee, arranging catering and fixing printers. (These are also acceptable community manager tasks.) Sometimes the job involved catching mice and dealing with office party detritus, including used condoms in the meditation room and vomit in the phone booths.” (This last bit, however, stretches community manager responsibilities quite far.)
But the underlying issue here is also the type of culture and community WeWork appears to be ‘nurturing’. Many flexible workspace operators will agree that used condoms and vomit are not issues they have to deal with after parties or events.
Ironically, Jen Berrent, WeWork’s chief legal officer and chief culture officer, told Bloomberg “We believe our secret sauce is in our staff and in our employees and especially on the community front. Our people are our soul.”
We are not convinced. A high employee churn rate and three former employee lawsuits do not align well, or at all, with a company who claims its ‘secret sauce’ to success is their staff.
Though WeWork’s success appears to be yet untouched by this, the backlash of mistreating employees can hit the coworking brand at any time, and the time might come soon.
“When WeWork started getting bad reviews on Glassdoor, Chris Hill, the chief community officer, asked community employees to submit positive reviews, according to three former employees.”
Though this might have hindered the backlash, it can’t contain it forever, and investors should look into these types of patterns, especially as WeWork continues to grow and expand aggressively across the globe.
Skepticism has long haunted WeWork’s financial model. And from the looks of it, skepticism is about to haunt its management and community claims.