The Pros and Cons of Unions – An Overview for Business Owners and Managers
04/12/11
With recent union-focused events in Minnesota and elsewhere dominating the news, many employees -- and business owners – are looking at the potential impact unionization could have on their workplace.
For employees, the apparent pros to union membership include collective bargaining, higher wages, and better benefits. Points against union membership include the cost of dues and, as wage costs rise, the possible loss of jobs.
But what about from the employer or manager’s point of view?
Are there pros and cons to unions from the business perspective? Surprisingly, yes. Even from a business prospective, unions are not all bad news.
The problem with unions
It’s common knowledge that most business owners would prefer to keep unions out of their businesses. The list of reasons for their anti-union stance is probably familiar to most people, and includes:
- Higher wage costs
- Higher benefit costs
- Loss of flexibility in job assignments
- Greater complexity in hiring and firing employees
- The need for collective bargaining and contracts with employees who would otherwise be “at will”
- The threat of job slowdowns or strikes
And all of those are valid concerns, especially in an economy that is challenging even the most fiscally sound companies.
The benefits of unions
What may not be as familiar to managers and business owners, is that unions can have a positive impact on a company’s bottom line. According to research citied by
Harley Shaiken of University of California at Berkeley, studies have shown that the presence of a labor union actually:
- Improves corporate productivity
- Reduces turnover
- Boosts corporate profitability
- Reduces state and federal spending on healthcare and other programs for uninsured or low income workers
So which way is right for your business?
There is no one right or wrong answer. The pros and cons of labor unions are different for each business and for each industry. Company owners, managers and stockholders need to look carefully at the impact of pro or anti-union stances, in the context of their unique business model and place in the market.
The best of both worlds?
If your company does not have a labor union in place, and your goal is to maintain that status, there are some things you as a manager or business owner can do.
Some of the most successful non-union companies have adopted policies that discourage employee unionization, not with threats or rule-making, but rather with a structure that makes a union unnecessary to its employees.
If your business has decided to adopt a “union avoidance” strategy, there are some ways to get the business benefits of union, without some of the drawbacks. Consider:
- Providing a wage structure that offers employees a livable wage, with reasonable adjustments as the cost of living rises
- Offering benefits that allow all employees to seek the medical care they need without incurring steep debts, or needing to resort to publically-funded programs like Medicaid
- Recognizing and supporting employees’ needs for vacation and other time off, reasonable work schedules and a healthy work/life balance
- Allowing employees to share in company prosperity and growth, and a feeling of ownership, through profit-sharing or employee stock options
- Opening lines of employee & management communication, so employees understand company strategy, goals and results
- Creating a trustworthy employee recognition program to identify and reward outstanding job performance, ideas and contributions
Building a corporate culture that values and cares for its employees as valuable and necessary to company success is a powerful way to take union organizing off the table in your organization.