Employee Free Choice Act and Projected Impact on Labor Costs
ningcontent“Companies recognize that if the Employee Free Choice Act passes it will have an impact on their business, but few are being proactive and strategically preparing for the increased labor costs,” says Richard Fine, a senior consultant at Hay Group who recently published a survey of companies on the Employee Free Choice Act. “Instead, we’re seeing companies take a wait-and-see approach. It’s as if they see the rain coming, but aren’t getting out their umbrella.”
Corporate Pro-action: EFCA
While the majority of respondents are not projecting labor costs, most (64%) are already taking some actions regarding EFCA.
- 64% of those taking action are planning, considering adding, or increasing supervisor management and training programs
- 47% are planning or considering improvements to unit climate and engagement
Source: Hay Group “Ultimately, whether or not an organization becomes unionized comes down to management,” added Fine. “The most effective way to avoid organized labor is to create and sustain a strong employee value proposition, embodied by trust, open communication and employee engagement. Employers should be taking the time now to ensure their employees are engaged to avoid a dramatic increase in labor costs later.”
Other key survey findings from Hay Group’s Employee Free Choice Act Survey
- More than 80% of respondents said executives at their organization are concerned about EFCA.
- Approximately 90% of respondents indicated the amount of HR time and resources spent on union avoidance would increase if EFCA passes.
- Of those, half thought HR time and resources spent on union avoidance would increase by 10-24%.
- Nearly 35% of respondents expect EFCA to increase employee pay at their organization.
- Approximately 16% of respondents indicated that they have projected the costs associated with a union joining their organization. The majority of those respondents believe total labor costs will increase by more than 10%, and many believe it will increase by more than 25%.
- More than 70% of respondents rated their current work climate with hourly employees as positive or very positive.
- However, only 35% of respondents administer employee opinion surveys to address union avoidance and vulnerability.
Article courtesy of Kennedy Information Recruiting Trends providing leading edge insights and strategies for the recruiting professional
