North America Retail Sector Leader & Senior Client Partner
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Stopping Strikes—Before They Start
It’s been a year of worker unrest: while the summer strikes of Hollywood writers and actors have grabbed the most headlines—closely followed by the walkouts of auto-industry workers—unions in industries ranging from retailers to video-game makers have also gone on strike this year.
Indeed, the numbers are enormous. In all of 2022, 23 major US strikes idled 120,600 workers, according to the Bureau of Labor Statistics; in July 2023, that number rose to 180,000 workers. Strikes are extremely costly to all parties, and can be even more damaging to firms over the long term. “The risk is not just duration and economics, but also that customers go elsewhere,” says John Long, sector leader for North America retail at Korn Ferry. “The company may never get that customer back.”
Strikes tend to be particularly damaging in the US, where they can drag on. In parts of Europe, strikes often occur earlier in the negotiation process, and are seen as a brief signal of discontent rather than a total communications breakdown. The union structure in the US also leads to copycat striking, where one union strikes and successfully negotiates terms like hours and compensation, then is followed by its counterparts in similar industries striking to gain the same terms.
Still, experts insist that strikes can be averted. One simple key, they say, is for business leaders to keep the dialogue going, and to try to deeply understand the issues at hand. “You can’t resolve every issue all the time, but being engaged with them is critical,” says Long.
Companies often model the potential impact of a strike across a variety of metrics, but the goal, says experts, is to be proactive. “Get ahead of it, long before the union starts making noise,” says Dan Kaplan, senior client partner in the CHRO group at Korn Ferry. In this environment, labor concerns are somewhat predictable. Inflation has squeezed workers’ budgets, and many can’t afford or locate childcare. Other global issues should be considered.
Experts also say leaders can anticipate that conflicts and technology debates in other industries will eventually affect their own. Case in point: the issue of AI in the workforce, first raised by writers and actors in Hollywood. “Don’t be surprised if unions start to look for longer-term deals around AI,” says Dave Rossi, president of the Global Industrial practice at Korn Ferry, who encourages companies to build resiliency in their supply chains. That way, if one supplier strikes, firms have other options. The key, he says, is simply staying ahead of the walkouts. “The last thing you want to do is back yourself up against a wall at the 11th hour.”
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