Getting Ready for 'Stealth' Unionization

March 3, 2009
In many organizations, HR professionals are so busy fighting fires that they lack the time and resources to think about and prepare for upcoming problems. If you have little time to scan the horizon, it's imperative that you don't get caught by surprise by the next major emerging HR challenge: "stealth’ unionization.

It’s true that as of December 2008, less than 9 percent of the private-sector workforce in the U.S. was unionized, but before you laugh off any fear of unionization based on a recent decline in membership, consider this possible worst-case scenario:

Your industry has virtually no unionization. In spite of tough times and recent layoffs, you still know that your firm will always have sufficient warning and a chance to counter any unionization activity. You've never even seen an organizer on or near your company’s site, so the threat of unionization is No. 467 on your fires-to-fight list. Then suddenly, you get a call from your CEO, who is in a panic because a union negotiator is in his office and saying he now legally represents your employees. The CEO is livid and wants to see you immediately.

Fortunately, this scenario can't happen under existing law because union certification is a slow and relatively visible process. Firms must be notified before there is any scheduled election to unionize, which gives them sufficient time to counter the attempt. Unfortunately, that slow and visible process is about to change dramatically under the pending Employee Free Choice Act. If passed by Congress, you could wake up one day to learn that your workers are now unionized as a result of a stealth organizing campaign. Most pundits believe that the act, which has yet to be reintroduced in the House this year after its defeat in 2007, will succeed in passing this time around, thanks to the Democratic Party dominance in Congress. President Barack Obama is on the record as a supporter.

Recent bankruptcies, layoffs, pay freezes and the devaluation of pensions are all factors that could drive workers to begin seeking the security that unions tout.

If you don't understand why unionization is such a threat, it's important to realize that in a global marketplace, customers doesn't really know or care whether your firm is unionized. They demand a competitively priced product with all the latest features. As a result, the real detriment from unionization isn’t the cost of dealing with the union, but rather the loss of speed, flexibility and innovation that result from more rigid work rules. It's also true that you cannot attract top talent to a slow-moving firm burdened by seniority and a ban on differentiated treatment for top performers. A look at the most unionized sectors (automotive, transportation, government and health care) quickly illustrates how unionization can spur bureaucracy and stifle change and innovation.

Time to ramp up your employee-oriented programs
The key action step for HR professionals isn’t just initiating a lobbying campaign against unions, but also to refocus your efforts on delivering a world-class experience to your employees. Organizations that listen to and meet the needs and expectations of their employees rarely undergo successful unionization attempts. It's also true that any sudden company effort to artificially show that it cares during union-organizing attempts will likely fail. The key to maintaining a union-free environment is for HR to begin identifying and mitigating early the factors that can cause a firm's employees to even consider forming/joining a union.

It’s critical to educate your executives about the true dollar cost (in lost productivity and innovation) as a result of unionization. Next, employees need to be educated about real job security, which can come only from having a performance culture that makes your firm supercompetitive in the marketplace. Third, reinvigorate your "listening" programs and make sure that your employee surveys, complaint processes and feedback mechanisms identify early on any major employee concerns. Next, work with senior managers to increase corporate transparency and the amount of organizational decision-making information that is routinely shared with employees. (Most employee discontent is the result of employees not understanding why certain decisions were made.) Finally, HR needs to rebuild its labor relations capability so that it can train managers to identify organizing efforts early on.

Because the mainstream press loves to focus on bad news regarding corporations, it is likely that the amount of press coverage and buzz given to unionization will increase dramatically in the near future. As a result, all HR leaders need to be prepared when their CEOs ask, "What is our plan to handle this?"