Labour market should unite business, unions

Aging workers, shortages means they’ll have to work together

As the workforce ages and workers become increasingly scarce, labour and management will have to find a way to work together to attract and retain workers, according to a new Conference Board of Canada report.

“Labour needs members and now employers are going to need people. It’s increasingly an employee-driven labour market. People can work where they want to and they’re going to choose the kind of workplaces that are going to be good for them,” said Christopher Hallamore, author of Industrial Relations Outlook 2007: Finding Common Ground Through the War for Workers.

“Employers and unions are going to have to look at the workplaces they share and review how their actions and interactions create a workplace that either brings in the talent they need or drives it away.”

The report predicts this convergence of interests will result in average wage increases of three per cent in collective agreements in 2007 and a relatively inactive year for lockouts and strikes.

Employers’ priorities for 2007 continue to be increasing productivity and workforce flexibility. But retention concerns will make employers more willing to offer job security in return for promises of productivity and flexibility from unions.

“Employers know that they can’t just walk in and make demands without having to give anything up, so they’re saying to unions, in some cases, ‘We’ll give you job security as a quid pro quo.’ That’s something that works to both of their benefits,” said Hallamore.

However, Pradeep Kumar, a professor of industrial relations at Queen’s University’s school of policy studies in Kingston, Ont., disagreed with this assessment.

“I don’t buy that at all. Why would management want to (offer job security)?” he said.

And even if employers wanted to, Kumar’s not sure they’re in a position to do so. Flexibility comes at a price, which includes layoffs, downsizing, lower wages and fewer benefits, he said.

Beyond job security, the aging workforce has realigned labour’s priorities for 2007 to focus more on pensions and benefits for older workers, according to the Conference Board.

Management’s concern about the rising cost of benefits as the workforce ages has the potential to make this a divisive issue. But in order to retain older workers in the face of a labour shortage, management might be willing to make some concessions, said Hallamore.

“You might see in a few years employers re-examining the issue of defined benefit plans. Nothing retains employees better than defined benefit pension plans. Once you reach a certain point, it doesn’t make a lot of sense to leave a certain employer because the pension is simply too good to pass up,” he said.

Hallamore isn’t predicting a major sea change with many employers dropping defined contribution plans in favour of defined benefit plans, but it’s something management might be willing to look at as part of a suite of offerings that help attract and retain employees.

“Insofar as you can sell those benefit plans as something that’s a draw for talent, employers are probably willing to listen to the argument,” he said.

While the aging workforce is definitely driving collective bargaining, labour shortages aren’t as general or unifying an issue as the Conference Board report makes out, said Kumar.

“Shortages are very polarized regionally. You find shortages are quite evident and very significant in the West, especially in Alberta and British Columbia, but they’re not so evident in central Canada or the Atlantic provinces,” he said.

While employers and unions are working well together at the institutional level, to really solve the problem of demographics and labour shortages, there needs to be co-operation at the regional and national levels, said Kumar. Unfortunately, the venues where this kind of co-operation used to take place are becoming scarce.

The now-defunct Canadian Labour and Business Centre, which closed its doors last year after the federal government cut its funding, was one of several national organizations that brought management and labour together to look at the bigger issues facing the marketplace.

“We used to have all kinds of other institutions where labour and management, the people at the national or provincial level, would sit down and look at what their priorities are, what some of the common ground is, what are some of the areas where their priorities differ and how they can work out solutions. Those kinds of organizations are withering away,” he said.

But the government isn’t solely to blame for this problem, he said. If business and labour representatives had been committed to the work they were doing, they would have found a way around the budget cuts, he said.

Despite the effects the aging workforce and labour shortages will have on both unions and management, Kumar isn’t as optimistic about labour and management coming together as the Conference Board report.

“There has to be some kind of a partnership between union and management to deal with these issues. Management has to recognize that unions have as much to contribute to this process as their own people and I don’t think that’s happening. I don’t think there’s any serious attempt being made by management to involve unions in the basic decision making process.”

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