The overall percentage of private sector unionization dipped slightly (by .2%) in 2022, but labor unions made strides in organizing new workers. In 2022, unions won more elections to represent private sector employees than in any year since 2005. They also won a record-high 76% of all elections held, buoyed by numerous victories in the high-profile and nationwide Starbucks campaign. The number of strikes in 2022 also increased over 50% from the previous year. In short, while unions continue to suffer losses in the rust belt and the manufacturing industry, they remain active and, once organizing is underway, very effective in winning elections to represent employees.
Greater Focus on Employee Relations and Incentives
In the last 12–18 months, the high-profile labor activity, especially in “nontraditional” union industries, has caused companies to focus more on employee relations. Many employers seeking to remain union-free are reviewing compensation and benefits packages for competitiveness in the market. They must continue to do so because there’s frequently no substitute for above-market wages or comprehensive benefits. Creative and meaningful measures to incentivize and reward hard work are especially important in 2023 and beyond. However, pay isn’t the only or even the leading issue fueling unionization. Company culture, particularly for younger workers, is increasingly viewed as the number one driver. Employees want to know their work is being appreciated, and they want to understand the organization’s direction.
It’s imperative that companies develop a communication strategy to ensure they’re effectively communicating with their employees and giving them an outlet to provide input. Furthermore, they should be reviewing how the company culture and communication goals developed by HR or the C-suite make their way to frontline managers. Many management initiatives fail without proper rollout. By its nature, union organizing is local. Employees at one physical location are rarely in the same bargaining unit as employees at another. Local managers must be empowered to implement company initiatives designed to improve culture. Otherwise, a single location is more vulnerable to employee discontent and, with it, unionization. Unions that successfully organize one “shop” typically want to build on that success.
Increased Priority of Implementing Employee Satisfaction Efforts
In addition, employees are more focused than ever on noncompensation elements and benefits of the job. Employees in 2023 are expecting flexibility (e.g., remote or hybrid work, time off, etc.) that employees in 2018 would never have envisioned. While this creates challenges for companies adjusting to the post-COVID workplace reality, it also provides opportunity. Some unions can boast to prospective new members about rich contracts or retirement/health benefits. But, employers that recognize these trends and adjust their incentive efforts and benefits packages, to the extent practicable within their industry, can demonstrate to their workers how they’ve made thoughtful change to the 2023 work environment and have successfully listened to their employees’ demands and needs. Employers that take on and enforce these elements will be much more effective in demonstrating to their workforce why unionization isn’t necessary.
While labor unions remain active, companies must look at their communication strategies, benefits packages, and compensation structures. Unions are looking to organize in industries where such efforts have previously been rare. Activity will likely continue, especially for companies that fail to be proactive.
Michael J. Passarella is a partner at Olshan Frome Wolosky LLP in New York and heads its employment practice. He may be reached at mpassarella@olshanlaw.com.