The Rebirth of Labor Relations

A convergence of forces will make labor relations expertise—and HR professionals who have it—more valuable.

By Eric Krell Feb 1, 2009
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February 2009 Cover

Among the surge of political, economic and demographic factors elevating the importance of labor relations skills, the most important motivation for HR professionals to strengthen their labor relations expertise might be personal.

Negotiating a collective bargaining agreement (CBA) with a single union representing 300 to 400 employees financially commits a company to millions of dollars during the course of the agreement, notes Andrea Terrillion, director of labor relations programs at Cornell University’s Industrial and Labor Relations School. "Nobody, not even the CEO, has the discretion to write that check on his or her own," she adds. "When HR folks talk about a seat at the table, there is nothing more ‘seat at the table’ than being intimately involved in these negotiations. … It’s a high-risk, high-stakes role."

Bernard Ruesgen, SPHR, corporate group HR manager, logistics and distribution centers, for Englewood, Colo.-based retailer Sports Authority, has worked on both sides of the bargaining table, and he agrees with Terrillion. "If you’re trying to get a seat at the big table without [labor relations expertise]," he asserts, "it’s not going to happen."

The coming months should present ample opportunity for HR professionals to punch their tickets to strategic decision-making tables. U.S. union membership, having declined annually for almost 50 years, posted its first increase in a generation during 2007.

Although the country’s 15.7 million union members account for only 12.1 percent of the country’s wage and salary workers, working with unions represents only part of the labor relations job description; the other part involves preventing unions from entering the company. Union activity is likely to increase, thanks to changes to the National Labor Relations Act, strenuous economic conditions, increasing globalization—and the retirement of veteran labor relations experts.

These drivers make labor relations expertise more important—and more valuable. Unfortunately, labor relations skills have never been in shorter supply among HR professionals.

Succession Planning Gap

Most labor relations experts and practitioners would agree with Ruesgen’s assessment that the concept of labor relations among many HR professionals is "mostly theoretical and limited to the practice of union avoidance."

The steady decrease in union membership since labor’s heyday in the late 1950s and early 1960s allowed company leaders to decrease the number of labor relations experts on staff. "In the past 15 years, labor relations has not been a core competency that HR professionals need to get ahead," Terrillion says.

Although about 75 universities—most notably Cornell and the University of Michigan—still offer some form of labor relations program, most human resources university curricula now emphasize general HR education and skills to a much greater degree, notes Theodore Raftas, SPHR, manager, workforce performance and employee relations for commercial vehicle maker AB Volvo in Allentown, Pa.

Raftas is currently working toward a master’s degree in human resource management. The program focuses on general HR topics, and "there is nowhere near as much labor relations content as I’d like to see," says Raftas, who spends about 90 percent of his work time on labor relations issues.

Many current labor relations experts have been on the job for close to two decades and are nearing retirement. Additionally, many labor relations departments sit by themselves and their employees interact relatively rarely with professionals in other HR functions.

"There’s not a lot of overlap," says Raftas, who, like Terrillion, notes that many labor relations departments are "segregated" either formally or informally. "That’s how it’s been throughout my career, and it continues today."

Terrillion notes that the expertise has traditionally been concentrated in the hands of very few people. "The knowledge has not been shared," she insists, "and, generally, there has been inadequate succession planning."

Card Check and Beyond

The importance of labor relations experience may soon soar, if all or part of the Employee Free Choice Act (EFCA) is signed into law. In its current form, the legislation was co-sponsored by then-Sen. Barack Obama of Illinois. During his campaign, the new president said he would sign the EFCA if and when it is passed by Congress.

The EFCA would amend the National Labor Relations Act to make it easier to form a union by replacing secret balloting with the signing of cards. Even if the legislation fails to pass, several other factors appear poised to boost union activity, including the recent economic crisis and an increasingly global and diverse workplace.

"When economic times are tough and people don’t think their employers are taking care of them, they reach out to a third party for help," notes Terrillion.

Some experts note that globalization has increased the need for HR professionals to learn more about labor relations. Labor relations practices differ around the world. As companies enter new overseas markets, they need to assess and understand those practices.

Kenyetta Haywood, SPHR, GPHR, director of compliance in the quality assurance department for the School District of Palm Beach County, Fla., believes there are increasing opportunities to glean best practices for labor relations from around the world.

"Global labor relations is a vital and evolving area of our profession," says Haywood, an employment law and labor law attorney who serves with Terrillion and Ruesgen on the Society for Human Resource Management’s (SHRM) Labor Relations Special Expertise Panel.

Transferable Skills

Labor relations veterans say that nothing provides more learning value than on-the-job experience; however, not all HR professionals are in a position to learn under the guidance of a mentor—or, in some cases, to gain exposure to labor relations before real-life opportunities arise.

Bernard Ruesgen, SPHR, corporate group HR manager, logistics and distribution centers, for Sports Authority, cut his teeth as a union business agent before being hired by a manager who had been his negotiating opponent. Ruesgen points out several "parallel" learning opportunities that can strengthen labor relations skills before the heat of battle:

Peer reviews. Union grievance procedures share several similarities with most peer review processes.

Grant writing. Volunteering for an agency that administers or applies for grants forces HR professionals to practice reading thick documents to gain an understanding of numerous boundaries and specifications. Labor contracts are bursting with boundaries and specifications.

Local board work. Ruesgen has served on the county planning commission, the city human relations commission and the county development board, among other civic volunteer commitments. The board work, he says, "teaches you to look at both sides and understand where these competing interests are." The frequently contentious nature of the interactions, he notes, helped him sharpen his labor relations skills while weighing competing interests against specific legal language.

Building Skills

Haywood recently drafted a report identifying the specific labor relations competencies HR professionals need as "essential and strategic business partners." She organizes the competencies into four broad categories:

Knowledge—background labor relations knowledge related to the private sector and the public sector at federal, state and local levels; and global issues.

Skills—specific skills such asleadership, negotiation, mediation, arbitration, the planning and developing of the CBA, interpreting and executing the CBA, analyzing and researching, interpersonal communications, and verbal and written communications.

Expertise—understanding of specific labor relations needs and challenges at an individual company given its special policies, CBA and business strategy.

Personal traits and values—competencies such as emotional intelligence, strategic thinking and planning, situational leadership and ethics, problem-solving and cultural competency.

When HR professionals develop these competencies, they "really become a strategic business partner," Haywood explains.

Other HR professionals with labor relations expertise cite similar competencies. "The HR practitioner’s role in labor relations is an exercise in advanced strategy," Ruesgen says, pointing to two "foundational competencies": the ability to research and interpret written material and the ability to provide informed advice and counsel to management on labor relations issues.

For his part, Raftas simplifies the necessary skills into three areas: understanding the business, preparing and negotiating. "You cannot have too much knowledge about U.S. labor law," he says. "And one of the key elements of bargaining starts with cultivating an understanding of the economics of how a business runs."

Lorraine Patterson, SPHR, another SHRM panel member and assistant division director of King County, Wash., distills the competencies into two qualities. "From the first time I sat down to work with a union, credibility and integrity were the two biggest things I needed to display," says Patterson, a former labor relations lawyer who manages a staff of 600 employees (including the county’s HR function), more than 90 percent of whom are union members. "What they’re really looking for is whether they can trust what you say."

Learning and Doing

Experts emphasize the importance of education and training in developing labor relations expertise. Patterson is a graduate of Cornell’s labor relations school. Ruesgen attended the George Meany Center for Labor Studies on a union scholarship earlier in his career. They studied for and earned certification as a Senior Professional in Human Resources, as did Raftas and Haywood.

Twenty-two percent of the questions on the SPHR test are about labor relations, compared with 18 percent of the PHR test. A greater portion of the SPHR test addresses labor relations because that test covers strategic HR issues, points out Debra Cohen, SPHR, chief knowledge officer for SHRM.

Labor relations practitioners also emphasize the value of on-the-job experience. Haywood got her start when she was named the No. 2 person on collective bargaining negotiations. "You learn very quickly," she recalls. "It gave me hands-on experience and knowledge in a quick and effective manner."

Not every organization can afford to groom future labor relations experts by assigning them a mentor. "It takes time and costs money to have someone sit next to your lead negotiator or your head of labor relations," says Ruesgen. "But that’s really where you should spot some of your junior people so that they can build those relationships [with veteran negotiators]."

If on-the-job experience is not an option, HR professionals can seek other opportunities to help prepare them for some—but not all—of the challenges that labor relations poses. If HR professionals are thrown into the heat of negotiations, they can seek training and educational resources from organizations and universities, advice from HR networks, or insights from folks like Patterson, who asserts that book learning only takes one so far.

"When the union [leaders] saw me—I don’t want to say ‘challenging’ because that’s too strong of a word—exploring different options with supervisors and managers sitting at the table to try to get some of what they wanted, I became less of an adversary and more of somebody who was reasonable and somebody they might be able to work with," she recalls of her first experience at the King County bargaining table. "At the same time, it is a tricky dance because you don’t want management to think that you’re not there for them."

Patterson sought to establish credibility with her management colleagues prior to the negotiations. "Those conversations you have [with management] before you get to the table really make a difference," she says. "You explain, ‘We’re going to explore a lot of options, so try to be open to it. What do you really want to get? OK, let’s make sure we get that. But understand—we may have to give on some of these other things, so be open.’ "

Given the rising importance and value of labor relations, more HR professionals should be open to exploring ways to develop these competencies. If they are not, some of their colleagues appear eager to take their places.

"A lot of companies are moving responsibility for negotiations away from HR and to the business unit," warns Terrillion, who provides on-site labor relations education programs to large companies. "I see that as a huge loss for HR."

The author is a business writer based in Austin, Texas, who covers human resource and finance issues.

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