Following the recent departure of several large unions from the AFL/CIO, it appears that the labor movement is at a crossroads. This coalition of member organizations, called “Change to Win,” includes three of the country’s largest unions: the Service Employees International Union (SEIU), the Teamsters, and the United Food and Commercial Workers Union. Taken together, the alliance represents 6 million workers. While it is unclear what this split will mean for the long-term future of the labor movement, it is safe to say that the institution lacks the clout it once had. Today, only about 8 percent of private-sector workers belong to a union, compared to almost three times that number in 1980. Union employees now make up only 12 percent of the total workforce.
One could argue, and many pundits and business leaders have, that unions simply don’t serve the best interests of employees anymore, that they are unnecessary, bloated bureaucracies that slow progress and often cost people jobs. According to the critics, the labor movement’s decline was inevitable. And yet, according to a recent Peter Hart poll, more than 57 million Americans would prefer to be in a union. What’s more, businesses, most visibly Wal-Mart, invest considerable sums of money in union busting. As David Bonior, Chairman of American Rights at Work, wrote in a recent USA Today letter to the editor, “Instead of investing in workers and contributing toward harmony at the workplace, employers put millions of dollars – money that could bolster wages and benefits – into campaigns designed to divide and conquer the workforce as it considers whether to form a union.”
Regardless of what becomes of the labor movement, an adversarial labor-management relationship is impractical. As study after study has shown, great workplaces outperform poor workplaces. In fact, the research strongly supports Bonior’s point that businesses would be better served investing money in employees as opposed to busting unions. A 1997 study by three Harvard Business School professors found that over a 10-year period, the stock price of companies that made substantial investments in employee loyalty and satisfaction increased over 147 percent, almost double the increase in stock prices of their nearest competitor.
We also know from talking with small to midsize organizations that management can have a healthy and productive relationship with labor representatives, one that benefits both sides. For example, 2004 Best Bosses winner Georgia Berner’s efforts to create a cooperative work environment at Berner International Corp. was rewarded by her employees’ union when they signed a 10-year contract in which wages and assignments were to be determined at her discretion. More importantly, she benefited from a workforce that saw themselves as partners in the company’s success.
Similarly, a number of large organizations have benefited from fostering a positive relationship with labor. In 1997, Kaiser Permanente negotiated Labor Management Partnership (LMP) with 26 unions. The LMP provided employees with greater job security, good wages, profit-sharing, and more involvement in decision-making. More importantly, Kaiser agreed not to interfere with its employees’ decisions to form unions. The 26 unions involved in the agreement, responded by making Kaiser their “HMO of Choice.” As a result, the organization considerably expanded its market share.
Harley Davidson partners with their personnel and the unions representing them to improve work processes as part of a program called High Performance Work Organization or HPWO. Thus far, HPWO has helped the company lower costs and expand their operations, creating a win-win situation as it has lead to job creation and, therefore, greater union membership.
In fact, I would argue that cooperation is not only a competitive advantage but absolutely essential to survival in today’s global economy. Taking a hard-line stance with unions is akin to cutting off your nose to spite your face. After all, is requiring unpaid overtime worth it if it means more accidents on the job and increased absenteeism? Is controlling your employees’ time down to their bathroom breaks worth it, if it means they become disengaged and unwilling to voice opinions that could improve your operation? Is it worth being known as a bad employer by the public at large just to have the upper hand in salary and benefit negotiations?
There is one surefire way to ensure your company is both union and strife-free: treat your employees fairly. Listen to them, help them grow as professionals and people, and recognize their accomplishments. I say this speaking from personal experience. My family’s business, Fel-Pro, was a non-union shop and we did not achieve this through illegal or draconian methods. We did this by fostering a non-adversarial relationship with our people. Satisfied employees have no interest in organizing. They appreciate that their employers value and respect their contributions. And workers tend to repay all the respect, generosity and honesty they receive with loyalty, hard work and goodwill. The goal of every business should be to create a mutually beneficial relationship between labor and management, because at the end of the day they need each other and always will.