January 1, 2019
At Chessboard, our continued focus is to support clients with resources and services that boost employee engagement, contributing to higher talent retention and lower vulnerability to union organizing. And, as in years past, as we enter 2019 we see a variety of factors that represent opportunities and challenges for employers in the year ahead.
As 2019 begins, a robust U.S. economy has resulted in a record low 3.7% unemployment rate – a long way from the peak of nearly 10% reached in 2010 during the Great Recession. In the current prosperous climate, employees seem to prefer cooperation over conflict – suggested by a record low rate of union membership (total 2017 union membership was 10.7% and only 6.5% in the private sector). And, while these data points imply a climate of workplace prosperity and peace, employers should take heed of potential storm clouds on the horizon:
- Recruitment and retention challenges will continue: Employers in all industries cite recruitment and retention as a top challenge heading into 2019. These issues are especially acute in the healthcare industry, with “recruitment and retention” cited as the top challenge for Chief Nurse Executives in 2019.
- Upward pressure on wages will increase: A tight job market naturally propels wages higher as employers compete for top talent. However, in 2018 and 2019, the evolving political landscape is also exerting upward pressure on wages. As the new year begins, 20 states are implementing increases to starting wages and, in Washington, Democrats are preparing to push for an increase to the federal minimum wage.
- Public approval of labor unions is on the rise and highest among females, college graduates and millennials: In the latest Gallup survey, public approval of labor unions registered another increase (62%, up from 61% in 2017). Significantly, according to the Gallup survey, support for unions is higher among women (64%), college graduates (70%) and those ages 18-34 (65%). Separately, research published in January 2018 by the MIT Worker Voice Project indicates that 48% of workers say they would join a union if they could, significantly higher than previous highs of 32% in 1995 and 33% in 1977.
- The 2018 mid-term election outcomes will boost union influence in 2019: With Democrats in control of the House in 2019, employers should expect an aggressive oversight and legislative agenda regarding labor and employment issues. The newly elected House Democratic majority will likely focus on drafting legislation that supports a progressive narrative. Such efforts will surely include the previously referenced proposal to increase the minimum wage but could also include proposals to expand family/sick leave and increase union rights (i.e., the Workplace Democracy Act). And, while this proposed legislation is unlikely to be signed into law, it will stake out the Dem’s legislative priorities ahead of the 2020 election cycle.
Employers who thrive in this environment will be those who find new and creative ways to engage and involve employees. Although providing competitive total compensation will remain important for attracting and retaining top talent, organizations that emphasize high-quality communication and actively engage employees to participate in shared decision-making are more likely to achieve the coveted “destination employer” status.