Harnessing Union Power for Business Success

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. 

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."

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.