Preparing For Labor Negotiations: An Overview

by Kenneth M. Lynn Supporting Effective Agreement

This article is courtesy of HR.com, a website committed to making the lives of HR professionals and business managers
easier.

As a member of four national negotiating teams for the U.S. Postal Service, I
remember the excitement, apprehension, and activity that preparing for the
negotiations generated. Negotiating with multiple unions at one table creates an
environment where management is required to understand both the individual
union issues and those issues that transcend the entire table, such as jurisdiction
issues.

Our pre-negotiation process generated reams of information and reports from

field operations. This was critical in developing negotiating scenarios and costing
out their outcomes. As a consultant in private practice, I have found that while
HR practitioners often approach negotiations with concern, they often turn over
the responsibility to professionals from outside the organization who may not
fully understand the culture, environment, and the history of the labor contract.

While I feel there is a place for consultants and labor attorneys at the table, I
believe it is working with management after undertaking a pre-negotiation
process that creates a clear vision of potential outcomes based on the
organization's experience with the contract. In my experience, many
organizations do not do the preparation work that will allow them to be
successful in negotiating subsequent contracts.

The First Steps

Preparation for any negotiation should start with a number of steps designed to
develop your negotiating strategy.

Review of Previous Negotiations

Start the process by reviewing union agendas from previous negotiations. The
process of reviewing the notes or minutes of previous negotiations will allow the
HR Professional to study the arguments made by both sides and review the
answers given in respect to the arguments. This is especially useful if the HR
Professional was not present at the last contract negotiation. It is very helpful at
this point to begin developing an indexed contract review and negotiating
strategy book.

Reviewing the plusses and minuses of past negotiations, including the tactics,
timing, concessions and gains often provides the best learning experience and
predictor of future behavior on the part of the union. Any settlement agreements
or any "side agreements" should also be reviewed along with any oral or written
commitments made during the prior negotiations and since the last contract.

One of the priorities for the HR Professional should be to follow up on all of the
agreements and commitments to determine whether or not they were carried out
by management and what operational impact they had on the organization. Often
times side agreements or settlements can be included into the next base
agreement rather than becoming negotiating issues.

A review of the key issues in the last negotiation is critical. Included in the
strategy development should be an assessment of those issues and whether or not
they will surface again. It is far easier to develop strategies to deal with each of
these issues prior to the negotiations than it is to deal with them at the table.

A review of the personalities that were involved in the last negotiations is

important. Who were the dominant personalities and will they be involved in the
next negotiations? A review of those personalities with the negotiating team and
the development of strategies to deal with their absence or presence can make a
big difference in dealing with their influence at the table. It can often times lead
to a strategy that opens doors that were once closed.

Review of Operating Experience During the Life of the Last Contract

The manner in which the contract impacted the efficiency and effectiveness of
the organization is a measurement that is critical to the negotiating team. This is
the place where the HR Professional's relationship with operations management
and line supervision can really pay off. Asking the right questions that drive to
the contracts impact on operations, quality and productivity provides data critical
to the creation of scenarios and outcomes that will enhance the value of the
contract to management. A mistake often made by labor relations specialists is
asking general input from operating management and accepting lack of input as
evidence that the contract may not need modification. A solid approach to
generating useful data is a section-by-section discussion facilitated by the HR
Professional and attended by the operating management staff.

A good cross check for the HR department and a next step is an analysis of the
grievance and arbitration experience during the life of the contract for each
article or section in the contract. This data compared to supervisory input will
create a profile of the operational problems in the contract.

Consideration of the Unit for Bargaining

A key consideration for management is the construction of the bargaining unit.

This is often a choice that management can make in respect to the benefits they
may derive from joining other employer groups for bargaining purposes. This is a
unique consideration for each employer and should be based on the negotiating
track record, composition of the union, cohesiveness of the employer bargaining
unit, and the potential leverage of any employer group being considered. If the
employer has more than one contract with the same union, another
consideration is an evaluation of the pros and cons of a single employer and
multi-facility bargaining group. This often takes an assessment of the union's
interest in bargaining this contract within a multi-employer or multi-facility
framework.

Generating Data
Anyone who has negotiated contracts knows that accurate data in respect to
wages and benefits is critical in developing successful outcomes. At a minimum,
generation of the following analyses will provide the negotiating team with key
baseline comparisons necessary during the economic discussions:

A wage chronology showing base, average, and key wage rates over the last
10-15 years.
A benefit chronology of the most significant benefit changes in the last 10-15
years.
Historical summary of key economic factors of the employer's company such
as productivity rates, prices, production levels, sales or revenue volumes,
and profits.
Chronology of key labor costs such as health insurance, pensions, and
vacation pay costs.
Summary of labor unit costs including labor cost per hour for the last 10 to
15 years.
Recap of labor costs on a gross and hourly basis under the current labor
contract. Show the cost of each element of labor.
Recap of the hours of work for each facility/operation:
Average weekly hours
Entire bargaining unit
Each work unit
Each department
Each job classification
Unworked paid hours on the job
Paid lunch periods
Paid break periods
Paid wash-up time
Paid time off for union business
Overtime hours worked for the same units
Premium hours worked for the same units

The comparison of this data with the estimates made during the negotiation of
the last contract will provide the negotiating team with a test of its costing
techniques. Techniques should be modified if large differences are generated. The
generation and analysis of this data should result in a summary of the economic
provisions of the present contract for quick reference during negotiations. It
should also provide the negotiating team with:

A wage bracket reference chart with numbers of employees at each wage

increment.
A matrix showing the number of employees in the bargaining unit according
to age and service.
A detailed cost breakdown of key labor cost items.
A baseline to estimate the cost of new economic considerations at the next
negotiation.
A baseline to generate employer based economic strategies.

Looking at the Industry

The negotiating team should also look at external factors such as other
employer's compensation packages for similar work, major benefits provided by
comparable employers, and recent contract settlement terms for comparable
employers in the same industry and geographic area. Sometimes looking at
comparable employers in other geographic areas can provide the team with
favorable economic comparisons.

It is often very helpful for the HR Professional to collect data by interviewing

other HR Managers. This can often provide valuable information in respect to the
environment of the negotiations, unpublished practices, concessions, attitudes,
and other key considerations in the negotiation of a successful contract.
Sometimes other employers have implemented innovative measures that can be
used by the negotiating team to facilitate the development of the contract.

Development of the Employers Strategies

The last step in the pre-bargaining process is the development of objectives for
the negotiations. By the time the team has progressed through the internal
assessment, data collection, and external assessment, it is generally ready to
establish ranges for economic settlement, changes in non-economic terms and
contract language, and any special provisions. Drafts should be generated that
address all of the economic and non-economic provisions of the contract.
Whether these are offered as initial or as counteroffers is a part of the strategy of
the chief negotiator for management. At a minimum, changes in contract wording
should be discussed with operating management to insure they capture the
essence of the necessary changes.

Management should prepare the background material, data, and any arguments
to support all of its proposals. Management should also prepare a rough
negotiating timetable to facilitate the completion of the contract. This should
include start date, available dates to meet, ideal frequency of meetings, and the
timing of the offers based on past negotiations.

This article was provided by HR.com.

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