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2 posts from December 2020

09 December 2020

Industrial Relations: The Great Unknown?

by Julia Harrison Senior Consultant

Email +44 (0)7843 371079

Why now, more than ever, Boards and Executive Management need to understand the trade union dynamic

In 2019, just under 25% of the working population of the UK belonged to a trade union, increasing slightly for the third consecutive year. The public sector had 3.77 million union members, and the private sector 2.67 million. Female membership is on the rise, reflecting the changing shape of the UK workforce and perhaps the nature of campaigns and workplace disputes that unions support, concerning discrimination and flexible working.

This year, unionised businesses have had to engage with trade unions to consult on change driven by the unprecedented impact of COVID-19. This has ranged from consultation about the government’s Coronavirus Job Retention Scheme, where furlough arrangements were introduced by collective agreement in many unionised organisations, through talks about home and flexible working, to redundancy consultation. Businesses growing under COVID-19 that need to change their working methods rapidly are as likely to be consulting with unions as those facing contraction or closure.

There is no doubt that trade union influence is sector-specific and can be significant, reflected, for example, by the union pay premium which in 2019 was 10.3%. With some notable exceptions, we are often surprised by the limited engagement at Board and C-suite level, with the impact of industrial relations. Collective relationships govern a wide variety of working arrangements, both formally and informally. The larger the unionised workforce, and the longer the tenure of employees, the more likely it is that these are well established. They may in reality only be known in any detail to very few people. Despite being seasoned veterans in other areas, many executives lack experience in this field. It is typically devolved to operational or functional teams, risking silo-led decision making, or sits in a small specialist team in HR which can detach corporate decision making from the realities of implementation. Both of these approaches can lead to a limited understanding of what arrangements are in place, and the evolution of corporate myths about what is, or is not, possible.

As a Board or Executive in a unionised business, understanding the industrial relations framework of your organisation will enable you to ask relevant questions and reach balanced conclusions about how your workforce operates and the options available to you both legally and industrially. Your industrial relations team needs your input, so they understand your risk appetite and can consider the widest possible range of options to reflect this. How long is it since your business stopped to consider these sorts of issues? As the pandemic causes organisations to look for smart ways to restructure, grow and face into the new normal, now more than ever Boards and Executive Management need to understand the trade union dynamic in their business. If properly understood, the relationship can enable (rather than frustrate) meaningful and rapid change.

Please do not hesitate to contact Tom Williams, Julia Harrison, Laura Nadel or your usual PwC contact if you’d like to discuss any issues relating to the issues raised in this note.

by Julia Harrison Senior Consultant

Email +44 (0)7843 371079

07 December 2020

Negotiating in uncertain times

by Tom Williams Partner

Email +44 (0)7841 103973

Why it’s important to plan effectively and focus on mutually beneficial outcomes

In the shadow of coronavirus (COVID-19), the ways we are learning to adapt at work are much like the ways we are learning about the virus. We watch, learn and respond - then repeat with the benefit of experience. Here we look at how successful approaches being used in unionised organisations can help clients plan effectively during the pandemic.

Focusing on joint goals

A shared understanding of the scale and impact of the pandemic has led to unprecedented levels of cooperation between stakeholders. Management and unions are focusing on outcomes which benefit both employees and employers. Robust consultation is alive, but at present realism and pragmatism have generally replaced adversarial industrial relations. At a macro level, this was exemplified by advice issued jointly by the TUC, CBI and ACAS in September 2020 on how to avoid, or where necessary implement, redundancies. Unions and employers are facing the future with a shared desire to survive, with hard choices being made fairly and openly. Change activity can happen faster, but with more genuine dialogue, if parties focus on minimising negative impacts on employees whilst also delivering effective outcomes that mean businesses survive the pandemic. Employers who have not pursued a cooperative approach have received strongly negative reactions in traditional and social media, in turn opening up political scrutiny.

To take advantage of this approach consider opening up new ways of talking to your unions. Look beyond your existing facilities to create a forum to look at future-proofing your organisation and its people, where participants must commit to focusing on jointly beneficial approaches and day to day talks are off the agenda.

Scalable solutions

Probably the most successful approach to effective planning when the future is uncertain, but one that can easily be missed in a crisis when strategic planning can lack the immediacy of tactical solutions. Finding a path to change once is hard. Having to start from scratch if the environment shifts and the plans you have agreed were not enough will add significant effort, human stress, time and cost. Whilst we may not know what is around the corner, trying to achieve one-time agreements about how and who to engage with, change processes, redundancy selection and flexible working opportunities, will mean that organisations facing difficulties during the pandemic are well set up to react quickly if additional change is needed.

Look outside your organisation to seek ideas from the wider market. Use benchmarking to find out what creative solutions other businesses in your sector and beyond have used to build scalable options for change.

Investment in key relationships

Another point that can be neglected, but which is often the difference between successful and unsuccessful negotiations, is the positive effect of good working relationships. Operating in an uncertain environment every day is exhausting, and this may feel like a nice to have, not an essential point. Putting up a logical business case for change is critical, but in a crisis, a business must connect with its people in a way that engages them to effect change quickly. Achieving this often relies on trust and good faith between key leaders, employees and union negotiators. Those businesses who spend time getting to know and understand these critical constituencies will be a step ahead: and importantly, it’s never too late to start.

Above all, engage directly and regularly with your stakeholders: listen to them. Time and resources are stretched everywhere, so pare back and approach employee engagement using existing data, simple communications tools and channels, and key messages that reflect both business-critical issues and an understanding of what matters to your people.
Please do not hesitate to contact Tom Williams ([email protected]), Julia Harrison ([email protected]), Laura Nadel ([email protected]) or your usual PwC contact if you’d like to discuss any issues relating to the issues raised in this note.

by Tom Williams Partner

Email +44 (0)7841 103973