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HR Lessons From a Strike

November 1, 2000
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August 6, 2000 marked the beginning of a tough two-and-a-half weeks forVerizon, the company formed after the merging of Bell Atlantic and GTE telephonecompanies. More than 80,000 unionized technicians and customer-servicerepresentatives on the East Coast participated in an 18-day strike, and althoughit didn’t shut down Verizon, it gave management something to think about.

Nearly 30,000 managers left their comfortable offices to work as operatorsand technicians, some hastily cross-trained. In the end, workers walked awaywith an agreement that upped salaries and gave them stock options, increasedbenefits, lowered caps on forced overtime and made it easier for the unions toattempt to organize Verizon’s wireless division.

But the deal is deceiving. Although money was an issue, it wasn’t theissue. Margaretta Cullen, senior vice president of global human resources forTMP Worldwide, the parent company of Monster.com, says the pay increases weren’ta big score. "Yes, they got a 12.5 percent pay raise over three years, butthat’s just slightly more than 4 percent a year, what a merit-based increaseis anyway," says Cullen.

What the settlement does show is a move away from collective bargaininglargely for pay hikes, and toward bargaining for quality-of-work/life issues.Unlike the physical working conditions that unions fought to change in the lastcentury, current workplace problems have more to do with stress. In the Verizoncase, that stress was caused by too much forced overtime and too little freedomin handling customer calls.

The agreement that ended the strike reduced weekly required overtime forcustomer service reps from 12 to 15 hours to about 8; technicians will have an8-hour-per-week cap on mandatory overtime starting next year. So what does allthis mean?

"I think we are starting to see all employees, not just management,being able to write their own check. The workforce is getting smaller, and theneed for technical skills, including call-center skills, is getting bigger. Yousee things happening in this New Economy -- things like telecommuting, bringinga pet to work, sabbaticals -- and everyone wants some of that," saysCullen.

Given a labor market that’s essentially at full employment, call-centerstaffers, customer-service reps, and all those back-end workers know they aren’tas replaceable as they once were, and they want to be treated that way. Givethem the ability to balance work-and-life issues, pay them competitively, givethem a pleasant work environment, and they’ll stay, says Kate Bronfenbrenner,director of labor education research at Cornell University.

"The most important thing for human resource managers to learn from thisstrike is that average American workers feel they aren’t getting their shareof the economic boom, which has been created at their expense," she says.At Verizon, call-center operators and technicians put in 12-hour days andwatched as the company’s stock went up, but stock options weren’t a part oftheir benefit package.

"They are frustrated because they sense they are working longer, harder,and faster at jobs they once considered good, with benefits and security. Thenthey see Verizon making millions of dollars and being successful, while they areworn to the bone," says Bronfenbrenner. And that’s where union resurgencecomes in.

Recent surveys of workers in this country indicate a feeling that unions areneeded, says Bronfenbrenner, and her own research shows union support cuttingacross all sectors of the economy. "We see doctors and high-tech workersturning to unions, as well as those in service and maintenance industries."

Tom Casey, a partner at Unifi Network, a division of Pricewaterhouse Coopers,says the Verizon strike and settlement -- viewed as win for the unions --changed the New Economy view that unions were dead.

"In a good economy like ours, the media pretty much suggests that unionshave lost their influence but obviously, they are very much alive," saysCasey.

In fact, unions are angling to be important players in high-tech sectors. Inthe Verizon settlement, the International Brotherhood of Electrical Workers andthe Communications Workers of America won the chance to try to unionize theInternet economy, through Verizon’s wireless division, where job growth willbe fastest. And as employees in high-tech industries take note of the success atVerizon, there’s bound to be a ripple effect.

"Management needs to be concerned that this type of win will emboldentheir unorganized employees to reach out to union representatives foradvice," says Kirby Wilcox, a partner specializing in employment and laborlaw at Paul, Hastings, Janofsky & Walker in San Francisco. "It makesthe unions look effective in an industry where they have not traditionally beenwelcomed."

Yet welcome, experts believe, they will be. That’s not necessarily badnews, either; in many cases, unions actually help companies retain a stable,long-term work force. Jeff Keefe, a professor of labor studies and employmentrelations at Rutgers University, conducted a survey in 1998 oftelecommunications companies throughout the country, looking primarily atmanagers, service reps, and technicians.

He found that large firms like Verizon, AT&T, and Bell South arecharacterized by stability among employees. "There are several advantagesto that unionized workforce," says Keefe. "Because technicians aremore unionized than other groups in the industry, they receive higher thancomparable wages, by about 13 to 14 percent. Technicians are mainly high schoolgraduates with some college, trained on the job, who feel a long-term commitmentto the company."

Wireless companies and Internet service providers tend to rely more oncollege graduates who are not unionized, but they pay 30 to 35 percent more insalaries.

"The survey showed wireless firms and ISPs especially had higherturnover. I think a lot of the things done to take advantage of slack labormarkets years ago, like variable compensation, performance-based pay systems,and downsizing, are coming back to haunt these companies. To their employees, itsays it’s a quid pro quo out there," says Keefe.

But old-line companies loyal to their often-unionized workforces are seeingconsiderable savings because highly trained workers are staying put. This, ofcourse, is at the heart of all the issues associated with the Verizon strike.The problem for human resource managers isn’t necessarily the threat of unionorganizing but the fear of losing employees who are frustrated and unhappy. Justthe suggestion of a walkout by workers now is far more effective than it’sbeen in the past -- where will companies find replacements?

Casey says that rather than wait for the unrest, human resource managersshould be proactive: recognize how important it is to treat all employees welland assess whether certain employee groups are being taken for granted.

"Our research shows to keep people content at their jobs they need,among other things, learning opportunities, competitive compensation, anunderstanding of advancement potential, and a mix of employee benefits,"says Casey.

Those benefits aren’t just medical and disability. Even hourly workers wantthe non-traditional perks of salaried employees.

What workers at Verizon wanted, says Wilcox, was to be appreciated. "It’simportant that employees feel their employer cares about them. One of thehallmarks in collective bargaining is that despite hard fighting, there is agood-faith belief that one side isn’t trying to take unfair advantage of theother."

During the Verizon strike, forced overtime that affected not only workers’stress on the job but also stress at home was portrayed as representative of theemployer’s treatment of all employees. Wilcox says this bargaining tactic willprobably become more common in the future.

"The unions focus on the pressure of one job -- call-center work in thiscase -- and argue it is symptomatic of the pressures inherent in all jobs, whichisn’t true. That’s why companies should look at jobs where there isunderlying stress, such as forced overtime, anything that could be a potentialblistering point," he says.

In many cases, it’s not the job itself that is stressful, but rather theway that the job is structured. Because of the tight labor market, employers areoften trying to squeeze a job meant for one and a half people out of one person.Chere Estrin, head of The Estrin Organization in Los Angeles, an internationalstaffing company, says it makes more sense to create a shared job.

"Instead of paying overtime, which is a tremendous cost to the company,you

hire someone to come in 20 hours a week and teach them how to seamlesslyjob-share with the full-timer. Then you avoid the stress of forced overtime andalso save money," says Estrin.

Another lesson from Verizon, she says, is to avoid operating with a crisismentality. Whether it’s a technician, service rep, or a programmer, having tofrequently use last-minute, forced overtime means something is wrong with theway the work flow is managed.

"Most people need to be able to work with a schedule that they can counton," says Estrin. "Employees usually don’t have access to the mastercalendar of a company, so they don’t know when projects are due, or even whenpart of a project is due. Without the whole picture, they can’t plan, and theperson who winds up with the work can’t see it coming down the pike."

Ultimately, what we take from Verizon’s ordeal is the notion of a breakingpoint; Job-related pressure and stress are more than a work problem; they affectall aspects of an employee’s life.

"Employers need to make the decision that instead of pushing theirexisting people to work harder, they will structure jobs more humanely, hiremore people, and offer better benefits," says Cornell’s Bronfenbrenner."You can only push people so far. It’s an issue that resonates not justfor the workers but for the whole community."

Workforce, November2000, Vol. 79, No. 11, pp. 36-42 -- Subscribenow!

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