Harnessing Union Power for Business Success
As organized labor gains clout in U.S. workplaces, business leaders can partner with unions to harness the potential of the workforce.
When John Fenton, CEO of Patriot Rail Co., first looked at his railroad's stevedoring business, it was ugly: Productivity was weak. Safety was sketchy. Freight damage claims were high.
He headed to the port in Jacksonville, Fla., where 158 stevedores worked per shift, unloading cargo. Fenton found that they were ferried about the jobsite in a jalopy of a van and had no place to escape the sun to eat lunch. "I got an earful," he says.
Next stop was Houston, to meet with union leaders about improving conditions for employees. Fenton followed up by providing air-conditioned buses and an indoor lunchroom with a microwave and refrigerator, along with better training programs, personal protective gear and work boots for employees.
The workers responded. Freight damage claims dropped 70 percent, the turnaround time for getting freight onto trucks and out of port decreased by more than 50 percent, and the operation went 18 months without an injury.
"All of a sudden, we were one of the best operators," Fenton says.
"When you create a culture of commitment and care," he adds, "that's where the magic happens." He calls this philosophy "employee-first leadership."
Patriot Rail in Jacksonville has since sold its port business, but it currently operates 15 short-line railroads. Three unions represent about 40 percent of the company's employees.
As unions have made a comeback in recent years and the pandemic has reset workers' priorities, some companies have fought organizing efforts. But Fenton and other business leaders say organized labor can offer benefits in safety, training, productivity and more.
"When you approach labor with a willingness to work with them, listen to their ideas, listen to how you can work together, it changes the dynamic," Fenton says. "It's a partnership, not us versus them."
The Rise of Unions: A New Era for Businesses
Some of the nation's highest-profile companies have faced organizing efforts recently. Amazon workers at a Staten Island, N.Y., warehouse, for instance, won a surprise victory last spring to unionize in the face of intense anti-union pressure from the company. "If workers can win at Amazon, they can win anywhere," says Benjamin I. Sachs, a Harvard University law professor.
In December 2021, Starbucks employees in Buffalo, N.Y., set off an ongoing wave of unionization efforts at nearly 250 stores across the U.S. In June of this year, workers at an Apple store in Towson, Md., became the first in the nation to unionize.
During the first six months of fiscal 2022 (Oct. 1, 2021, to March 31, 2022), petitions for union representation jumped 57 percent compared with the same period the year before, the National Labor Relations Board (NLRB) reported. And public approval of labor unions was at 71 percent in an August 2022 Gallup poll—up from 64 percent before the pandemic and the highest level since 1965.
The trend toward unionization isn't expected to slow anytime soon, experts say, because employees view organizing as a critical way to be heard more clearly at work—without fearing retaliation—on issues such as pay, benefits and working conditions.
The growing clout of organized labor is due to multiple factors: President Joe Biden's pro-union bent, a tight job market that has increased workers' bargaining power and a broad realization brought on by the pandemic that working conditions can be life-or-death. Among many younger workers, there's also a demand to be treated better, says Jason Greer, head of labor and employee relations firm Greer Consulting Inc. in St. Louis.
"From an HR management perspective, the question is, 'How do you construct an environment where you have a productive relationship with your union?' " says Sachs, formerly an attorney with the Service Employees International Union (SEIU).
Setting the Stage for Union Partnerships
When employees vote to form a union, company leaders should take early steps to prepare to work together effectively. Some experts say the key to a successful relationship begins even before the employee vote. That's because a company that fights organizing efforts can poison the well long before the two sides get to the bargaining table.
"There's an unfortunate history in recent U.S. labor relations of adversarial relationships," Sachs says. "The mode is, 'Let's fight tooth and nail to prevent them from getting anything.' That's not the best way to do this."
It's clear that under the Biden administration, the NLRB will avidly sanction employers for violations, such as for discriminating against union supporters or not bargaining in good faith, says Sachs, who expects to soon see the most robust enforcement from the board in decades—and possibly ever.
"I would hope we'd be entering a phase where enlightened management is not trying to get away with violating the law but is trying to harness the potential of the workforce," Sachs says.
Manufacturing has a long—and not always peaceful—history of unionization. But Greer says the decline of U.S. manufacturing has given both labor and management incentives to work together to help companies survive and thrive. And now, he adds, more organizing efforts are taking place in the tech industry, which is heavily dependent on scarce talent.
Workers who unionize are choosing to stay and improve a company instead of walking away at a time when job opportunities are plentiful, says Pam Egan, director of the labor management program at the Center for Labor Research and Education at the University of California, Berkeley. In a tight labor market, that's no small benefit to employers. Egan expects more organizing in a range of industries. "It's really sort of a gift," she says.
But it may not feel that way to business leaders. For management, it's important to put aside the resentment of feeling like you've been dealt a major blow. "It probably feels like you got smacked in the head with a bag of nickels," Greer says. "Your ego wants to get the better of you. But whether you like it or not, the union is here."
The Role of Communication in Union Relations
Management and the union don't have to be best friends, Greer says, but they can work together to make sure employees don't quit.
One key is to communicate regularly with the union, including in between contract negotiations, says Curtis Germany, HR director for Clark County, Nev., which includes the city of Las Vegas. The county has 10,000 employees and works with nine unions. For example, Germany says, even if management has a right to change a certain working condition, giving the union a heads-up first helps build trust.
"You have your bargaining times of the year, but the relationship is built every day of the year based on interactions with the members, the stewards and the leadership team," he says. "If they don't trust you on a normal basis, they won't trust you at the [bargaining] table." He recommends that management meet at least quarterly with each union.
Fenton conducts "listening sessions" with groups of rail workers every month. He finds out what they need—such as foam seats in locomotives and repaired air conditioning in cranes. "When you're working through the daily irritants to the workforce, they're much more willing to listen to us," he says.
Earlier in his career, Fenton inherited a contentious situation when he became CEO of Metrolink Commuter Rail in Southern California after a fatal collision. Workers didn't like a new requirement for cameras that recorded them to monitor safety procedures. Someone was regularly turning the cameras off. Fenton asked the union to resolve the issue instead of having managers start disciplinary procedures. Then he and the union worked together on a privacy policy.
"I didn't force anything down their throats," Fenton says. "I listened to their concerns. We came up with a policy that protected their privacy and made sure the things that happened in the cabin were the right things."
Prioritizing Safety: A Joint Effort with Unions
Unions open up a new line of communication between management and workers, Sachs says, because employees may feel freer to be honest about safety, work processes, productivity and their views about supervisors.
This allows employees to highlight problems—and suggest solutions. "A lot of employees have good ideas," says Michael Ellement, a partner with law firm James & Hoffman in Washington, D.C., and a former NLRB attorney. "Sometimes, HR can benefit from hearing from employees doing the work."
For instance, during the pandemic, management didn't always understand how workers were impacted. In the first months of the outbreak, Ellement represented employees at a fast-food restaurant who wanted more personal protective equipment and signs to remind customers to practice social distancing.
Unions can also help improve companies' safety practices and records, says Fenton, who notes that "it's not the management that gets hurt, it's the people doing the work."
Employees know where the real safety hazards are, Egan adds, and "have great wisdom in how to mitigate that."
Accordingly, nursing home staff with unions had an outlet to give managers feedback about what they needed as the pandemic developed. Nursing homes with unions had better health outcomes than those without, Egan says.
And better safety not only prevents injuries but also helps the bottom line, says John Magisano, learning and training lead at the New York City Office of Technology and Innovation. He trains managers in city government and also is a member of a civil servants union.
"It adds a layer of accountability to management, which is advantageous," Magisano says of organized workforces. "When you're compliant [with safety protocols], you're less likely to be sued or incur expenses from people being hurt at work."
Greer adds, "If you can agree with the union on anything, agree on safety."
Strategies for Employers in Union Engagement
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Enhancing Skills and Efficiency through Union Collaboration
Many unions can provide expertise in training because they have represented workers in many different companies and industries and have a historical perspective, Greer says.
The construction trades have a long history of working with companies to design apprenticeship programs that provide skilled workers to companies and a lifelong career to employees, Egan notes. For example, a hospitality training program from labor union Unite Here has been successful, she says, in creating a pathway to the middle class for Las Vegas workers.
Under federal law, unions and businesses can set up trusts to fund training programs. One example is the Los Angeles-area Education Fund, a joint effort of the SEIU and health care employers. It has a great track record of workers moving up in their careers through training programs, Egan says.
Another big upside of unionization, Magisano says, is increased productivity and employee engagement. "If I feel like I have a say in how the place is run," he says, "I'm going to work harder."
Magisano says he previously worked at nonprofits where employees were frustrated by their inability to have input and by capricious decisions by leadership, which led to widespread disengagement. A better approach, he says, is one in which unions agree with management on realistic productivity targets, preventing companies from setting goals so high that they lead to injury and burnout.
Joanne Lee, SHRM-SCP, chief people officer with Leavitt Group Enterprises, part of a national insurance company, says engagement is especially important today with talent being as scarce as it is. When she was with a previous employer, a beer distributor, she put giant photos of her most senior union drivers on the backs of trucks as a reward for their service. Company leaders also organized periodic breakfasts with third-shift workers they wouldn't otherwise see.
It's important that union members feel heard and that employers continue to build working relationships with all of the team members, Lee says.
More-engaged workers help the company not only reduce expensive turnover but also mine workers' knowledge and keep up with global competition.
"If workers feel it's a truly engaged partnership, you're adding value to the capacity to innovate in your business," Egan says.
Managers need to make sure company incentive systems reward cooperation with labor instead of just keeping labor costs low, she adds.
Union and Management Collaboration
Human resource professionals have an important role as a conduit between unions and management, Lee says, and they should listen carefully to all sides in a dispute.
Working with a union can present a steep learning curve for HR and managers. "It's not something they've experienced," Greer says. "All they've heard are the negatives about unions." He recommends hiring a consultant to help with the transition and having the HR team take courses in collective bargaining.
Hiring HR staff with union experience is tough. Germany says seven of his 36 staff members specialize in labor issues, and when he can't find fully trained labor relations talent, he looks for people with similar skills, such as employee relations.
Greer has found that solo HR practitioners also tend to have some relevant experience, and he trains them on specific labor laws and contracts.
Human resource professionals need to understand that the presence of unions can mean less flexibility in the labor-management relationship, Greer says, especially as both sides sort out a new contract. For example, he says, a manager who used to let workers leave to pick up their sick kids now must follow the union contract. "But you can't stop treating people like they're human beings," Greer cautions.
Management should try to use mediation instead of arbitration when possible, Germany advises. A mediator can help labor and management find their own solutions to grievances, differing contract interpretations and discipline disputes, rather than an outside arbitrator imposing a course of action. It's also much cheaper, Germany points out.
Finally, whether company leaders are working out conflicts or dealing with a new union, they need to build relationships with unions that encourage peace, Magisano advises.
"Labor peace is better than labor conflict," he says. "Conflict may not always be obvious, but it's always going to have a cost."
And even if companies are unhappy with a vote to unionize, they need to think about their relationship with their workers. "Employees have the right to make the decision," Germany says, "and employers need to respect that choice."
Tamara Lytle is a Washington, D.C.-based freelance writer who covers business, government, politics and other issues.
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