This week has been tough on several of the largest companies in the world because of strikes and labour court cases citing serious labour violations.
To recap:
· US East and Gulf Coast Dockworkers Strike (International Longshoremen’s Association): 45 000 dockworkers on strike over wage demands, seeking a USD5-per-hour raise. The strike has halted shipments at key ports, including New York, Baltimore and Houston, affecting industries from food to automobiles.
· Boeing (US): 33 000 workers, represented by the International Association of Machinists (IAM) are striking for a 40% wage increase and the reinstatement of a defined-benefit pension. The company had also cut off healthcare benefits for strikers.
· Samsung Electronics (India): Over 1000 workers at Samsung’s Tamil Nadu plant are striking, demanding higher wages and union recognition. Workers seek an increase from 25,000 rupees to 36,000 rupees per month over 3 years.
· Apple (US): the National Labour Relations Board filed a complaint against Apple accusing the company of illegal workplace rules, including non-complete agreements and overly restrictive social media policies that violate employee’s rights to organise.
Workforce management is a very complex issue, especially if we are looking at the largest companies managing tens of thousands of people globally. The recent strikes in the US and India, affecting sectors from shipping to manufacturing serve as a timely reminder of the importance of aligning workforce management practices with established international standards such as the IFC PS 2 focusing on labour and working conditions. Disclaimer is needed to clarify that legislation is often quite stringent – especially in the developed west, but even this is no guarantee that the workforce is managed well. I asked my very own myESRA to provide some overview on international best practice for the most critical issues highlighted by the news articles. Link to the video here: https://www.youtube.com/watch?v=s-M51Ii7S3o
Navigating Strikes and Unionisation
Most legislation protects workers’ rights to unionise and prohibits employers from sabotaging this – or discriminate against workers who are union members. The news of widespread strikes, like the 45 000 dockworkers in the US, demonstrates the power that unions hold in pushing for better wages and working conditions. When negotiations stall or management practices are seen as unfair, employees will not hesitate to organise and take actions. This is often a very sobering moment for businesses.
The strikes in the news serve as a prime example of how failure to manage labour disputes effectively can lead to severe economic consequences. With billions of dollars at stake and industries from food to automotive affected, businesses must find way to mitigate disruptions by engaging proactively with workers.
How?
I’m glad you asked. IFC PS 2 provides some suggestions:
1. Early engagement and negotiation: Employers should foster open communication channels and engage with worker representatives before issues escalate. PS 2 emphasises a collaborative approach to resolving disputes.
2. Respect for collective bargaining: Recognising and supporting the rights of works to organise and negotiate is not just a legal obligation but also a foundation for building long-term trust.
Fair Wages and Working Conditions
Another recurring theme in the strikes is the demand for fair wages. Samsung workers in India, earning an average of 25 000 rupees per month, are pushing for a wage increase to 36 000 a month within three years. To put this into context they want to go from the GBP 226 per month to 326 incrementally over a three-year period. Taking away benefits and pension is also bad form.
What to do:
1. Competitive compensation: Align wages with industry standards and cost-of-living adjustments, ensuring employees can maintain a decent standard of living.
2. Equitable benefits: Benefits such as pensions, healthcare and paid time off play a crucial role in maintaining workforce satisfaction.
3. Clear communication on wage policies: Transparency in how wage increases or decreases are decided fosters a sense of trust between employees and management.
Grievance Mechanisms and Worker Well-being
Effective workforce management also includes hearing some hard truths from your workers. Having an accessible and transparent grievance mechanism, though not a legal requirement, but a good business decisions to help you avoid misunderstandings, foster trust and accountability. The strikes at Boeing and Samsung highlight the importance of providing employees with formal channels to raise concerns and resolve disputes. Whether it is about unfair treatment, poor working conditions or wage disputes, businesses that lack such mechanisms are more likely to face unrest.
What to do:
1. Implement a grievance mechanism: Provide employees with anonymous, secure and straightforward processes to report issues without fear of retaliation.
2. Continuous dialogue: Grievance systems should not be limited to reactive measures. Ongoing dialogue between management and employees fosters a culture of transparency and responsiveness.
Creating a Positive Workplace Culture
What is hard to quantify but very easy to notice if not present? Positive workplace culture! One that is rooted in respect, fairness and transparency to prevent many issues that might lead to strikes or other, less extreme form of industrial action. Employees who feel valued and heard are less likely to resort to strikes or walkouts.
How to do this:
1. Inclusive leadership: Ensure that managers at all levels are trained in inclusive leadership practices which promote a sense of belonging among employees.
2. Well-being programs (or at least not taking away healthcare like Boeing): Address not only the financial needs of employees but also their overall well-being though health, safety, and mental health initiatives.
These are of course generic recommendations. For more tailored advice, engage a social performance practitioner!
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