Reflecting on 2023

The year 2023 witnessed significant developments in labor relations, with both successes and challenges for businesses and unions alike. From high-profile strikes to groundbreaking negotiations, the landscape of labor relations experienced notable shifts. 

Unions realized success in many aspects. The year witnessed a notable increase in public support for labor unions. According to a 2023 Gallup poll, 67% of Americans now approve of labor unions, which is the highest level of approval in nearly two decades. The COVID-19 pandemic created fertile ground for unions, as it highlighted the harsh realities of the absence of labor power and exposed long-standing inequalities. Millions of workers experienced layoffs without safety nets, while others risked their lives as essential workers for little permanent reward. These shared material crises led to a massive increase in public attention and support for organized labor.

Unions achieved significant organizing victories, particularly in the retail and service sectors. Notable successes included the unionization of Amazon warehouse workers in Staten Island, NY and a multitude of Starbucks stores across the country. These victories showcased the potential for collective action and worker empowerment. 

In 2023, a remarkable surge in strikes swept across multiple industries, leaving an indelible mark on the labor landscape. According to the ILR Labor Action tracker over 428 labor actions in over 700 locations in 2023. Over half a million dedicated workers from diverse sectors, ranging from skilled machinists and passionate teachers to dedicated baristas, compassionate nurses, meticulous hotel housekeepers, talented entertainment industry professionals and diligent auto workers, boldly went on strike or threatened to do so. This powerful display of unity and determination serves as a resounding testament to the growing movement for improved working conditions and enhanced benefits.

Unions encountered significant hurdles that demanded their resilience and determination in 2023. Legal obstacles impeded organizing efforts, as anti-union legislation and state court decisions created barriers to unionization campaigns and restricted unions’ ability to advocate for workers effectively. Additionally, certain employers resorted to aggressive union avoidance tactics, employing anti-union campaigns, intimidation and retaliatory measures against pro-union employees, all aimed at discouraging workers from joining unions. Despite these challenges, the unions’ unwavering commitment to workers’ rights remained steadfast, underscoring the imperative for a fair and supportive working environment. 

The evolving nature of work, including the rise of the gig economy and remote work, presented challenges for traditional union organizing models. Mercer’s 2023-2024 Inside Employees’ Minds survey found that office utilization remains at 50% even with the increased demand from organizations to “return to work”6. Unions faced the task of adapting their strategies to effectively represent and organize workers in non-traditional employment arrangements. 

While often overlooked by the media, it is important to acknowledge the notable achievements in labor relations that businesses experienced in 2023. Several businesses successfully navigated negotiations with unions, resulting in mutually beneficial agreements. These negotiations addressed crucial aspects such as wages, benefits and working conditions, fostering improved relationships between employers and employees. 

Forward-thinking businesses recognized the significance of employee engagement and satisfaction, prioritizing the creation of a positive work environment. By implementing initiatives like flexible work arrangements, wellness programs and career development opportunities, these businesses cultivated a sense of loyalty among their workforce and reduced the likelihood of further unionization. Mercer’s 2023-2024 Inside Employees’ Minds Study indicates improvement in several areas of employee satisfaction. 
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Overall union membership has steadily declined to only 6.4% of public sector workforce, showing businesses have an opportunity to reattract talent. Businesses that placed a high priority on employee engagement and effectively navigated negotiations reaped positive outcomes, while those that failed to address worker concerns faced reputational damage.
As we progress into the future, the lessons learned from the events in 2023 will profoundly influence the trajectory of labor relations. These lessons underscore the significance of equitable treatment, open and effective communication, and collaborative efforts between businesses and unions. Both businesses and unions will encounter a diverse array of challenges and issues that will significantly impact the dynamics of labor relations. 

What to expect in 2024

In 2024 businesses are facing the challenge of negotiating with unions to reach mutually beneficial agreements. Balancing the interests of the company with the demands of the union can be a delicate process, requiring effective communication, compromise, and a focus on maintaining positive labor relations. The ongoing labor shortages in certain industries will continue to pose challenges for businesses. With a shortage of workers in certain industries, employers may be more willing to make concessions with a union to retain and attract talent. 

Overall costs related to labor relations will continue to impact the achievement of business targets and objectives. In his book, “Union Proof — Creating Your Successful Union Free Strategy,” author Peter J. Bergeron notes that the cost of operating a unionized organization is estimated to be 25 to 35 percent higher than a union-free organization. Unionized organizations by necessity employ more extensive human resources staff, require increased legal expenditures, find themselves with increased involvement with regulatory agencies, lose flexibility and lose increased labor costs. The Bureau of Labor Statistics has determined that union compensation is 22% higher than non-union compensation on average. 
25%-30%

The cost of operating a unionized organization is estimated to be 25 to 35 percent higher than a union-free organization

22%

The Bureau of Labor Statistics has determined that union compensation is 22% higher than non-union compensation on average. 

Actions for businesses to take

Business that are currently not unionized should foster a positive work environment by offering competitive compensation and benefits. Create a work environment free from discrimination, harassment, and unfair labor practices. Invest in training for managers and employees to ensure respectful and consistent treatment.

Invest in employee engagement and development by providing opportunities for growth and development. Offer training programs, mentorship opportunities, and career development paths to help employees feel valued and engaged in their work. Give employees ownership over their tasks and decision-making processes to foster a greater sense of responsibility and engagement. Implement effective performance evaluation systems and celebrate employee successes to boost morale and motivation.

Maintain clear and consistent communication channels with employees, regularly address their concerns and involve them in decision-making processes. Encourage employees to voice their concerns and suggestions directly to managers or through anonymous feedback channels. Conduct regular employee listening surveys to gauge employee satisfaction, identify areas for improvement and address any potential issues before they escalate. Establish employee committees or councils to provide a platform for employee voice and collaboration with management on workplace issues.

Stay informed about union activity and implement a pro-employee culture. Be aware of potential unionization drives in your industry and region and understand the factors that typically motivate workers to unionize. Keep up to date on changes in labor laws and regulations that might impact your company’s approach to employee relations.

Business that are currently unionized should embrace the partnership by viewing the union as a collaborator, not an adversary. 

Businesses should recognize the union as a legitimate representative of your employees and work together to address workplace issues and achieve mutually beneficial outcomes. They should engage in open and honest communication with union representatives and cultivate a respectful relationship based on mutual understanding and cooperation. Work collaboratively with the union to identify and address workplace problems before they escalate, fostering a proactive approach to improving working conditions and resolving concerns.

  • Strengthen

    Strengthen communication and engagement by maintaining consistent communication channels, holding regular meetings and discussions to ensure both sides are informed and involved in decision-making processes. Share relevant information with the union and employees to increase transparency and build trust. This could include financial data, operational plans, employee survey results, market trends and decisions affecting the workforce.

  • Enhance

    Enhance employee involvement and empowerment by establishing joint committees or task forces where management and union representatives can work together on specific issues like safety, training, or workplace policies. Provide union representatives with access to relevant information and resources to effectively represent their members and address their concerns. Facilitate employee involvement in union activities and encourage open communication between union members and representatives.

  • Invest

    Invest in continuous improvement of your labor relations practices and procedures. Actively seek feedback from both management and union members on labor relations practices and continuously work to address identified issues and improve communication channels. Establish repeatable labor relations processes and provide training to managers and HR members to ensure consistency. Align company goals with the needs and aspirations of employees represented by the union, encouraging a shared vision for success and mutual benefit.
As we look ahead to 2024, labor relations will continue to evolve, presenting both challenges and opportunities for businesses and unions. Adapting to changing workforce dynamics, navigating legal and legislative hurdles, and addressing labor shortages will be key challenges for both parties. By fostering open communication, prioritizing worker well-being, and embracing innovative approaches, businesses and unions can work towards constructive labor relations that benefit both employees and employers. 

Speak with a consultant

The year ahead will undoubtedly shape the future of labor relations, emphasizing the importance of collaboration, fairness and adaptability in an ever-changing work environment. Contact us today to learn how Mercer can help your business.