HR Issues in 2023: What’s Keeping HR Up At Night?

2022 was filled with sleepless nights for Human Resources (HR), and 2023 is shaping up to be the same. The past couple of years have seen increased union activity, new forms of unionizing and the use of technologies for union organizing campaigns, a labor shortage, younger workers loudly expressing their feelings of empowerment, a National Labor Relations Board (NLRB) changing policies and labor laws, and on it goes. Now that HR has a seat at the table, you undoubtedly expect the HR leaders to guide your organizational leaders through a disruptive labor market and the active labor movement. The primary challenges for your leaders are strengthening employee engagement, attracting and retaining talent, and creating and maintaining a culture where unions are simply unnecessary. The people issues your organization faces are enormous, and how your leaders respond in 2023 will have consequences for years to come. Though a book could be written on this subject, the following sections offer a summary, based on our deep knowledge of unions and the labor market, of the significant challenges that will cause HR issues in 2023. 

John Barker, Labor Consultant with IRI Consultants explains, “One of the most poignant and repeated comments I’ve heard in C-Suite meetings over the last twenty-four months is ‘No good deed goes unpunished.’ Then there is typically a follow-up comment like, ‘It seems like we can’t do anything right in the eyes of our employees.’ These mishaps lead to what I like to call the 3 R’s: recruitment, retention, and revolution. When companies make these mistakes in the eyes of their employees, the organization sees challenges in acquiring new talent, retaining their talent, avoiding quiet quitting, and mitigating employee actions and labor union activity.”

Barker continues, “To avoid these mishaps, it's more crucial than ever to engage HR in C-Suite decisions. A good HR partner—someone who can keep a good pulse on your employees—can save an organization millions of dollars by being a critical thought partner for the C-Suite, helping them avoid costly mistakes that could have profound workforce implications.” 

What are Unions Planning in 2023? 

Due to a pro-union NLRB and pro-union Biden administration, labor union leaders recognize there is a two-year opportunity to step up their organizing efforts if they expect to increase membership by a significant number. The traditional labor unions are experiencing a change in leadership, and the union representatives seeking top positions as CEOs and on executive boards are promising to be more aggressive about organizing. They plan on increasing the number of organizing drives and the number of strikes and protests. In addition, younger workers forming non-traditional unions are inspiring employees across industries to express their empowerment through union organizing and walkouts. Following are some of the ways labor unions plan to increase membership.

Targeting Younger Workers 

Labor unions have watched and learned that younger workers are their hope for increased membership. Millennials in 2023 are 23-41 years old, and Gen Zers are 11-26. Both generations will continue to account for a higher percentage of the workforce in the future as baby boomers retire. This is one reason labor unions are targeting 20-34 year old employees.   

Another reason is that younger workers are leading union organizing efforts in industries that haven't traditionally been highly organized. Some have organized through traditional labor unions like the SEIU, AFL-CIO, and CWA. But there is a wave of non-traditional labor unions or alt-unions that are not associated with the big labor unions. Gallup found that the approval of labor unions is high, and the appearance of employee-driven and managed alternative unions surely has something to do with it. 

This means the big labor unions see two opportunities to increase their membership. In 2022, younger workers aged 16-24 had the lowest membership rate at 4.4 percent, per the Bureau of Labor Statistics. Yet, these are the people inspiring a new wave of union organizing. 

One labor union opportunity is to get more involved in low-wage industries and non-traditional industries. The BLS statistics said the unionization rate for food services and drinking places was 1.4 percent and for professional and technical services was 1.3 percent, making these the sectors with the lowest unionization rates. Even the highest unionized industries have low representation, like transportation and warehousing, at 14.5 percent.   

Making Unrealistic Promises  

Unrealistic promises become most apparent during or after collective bargaining agreement negotiations when the reality of economics and financial management influence what an employer can agree to and remain financially viable. 

First Collective Bargaining Agreement 

Labor unions often make unrealistic promises to employees. For example, they let employees believe that joining a union will lead to a collective bargaining agreement in a short period of time that will include meeting all employee demands. But workers are discovering it can take months and even years for employers and labor unions to reach an agreement. If your employees vote to unionize, and it takes an average of 465 days to negotiate a final agreement, management is projected to the public as the "bad guys" who don't care about people. The irony is that you follow the law and still have to defend your brand. 

Kate Bronfenbrenner, the director of labor education research at Cornell University's ILR School that tracks union activity, says 35% of overall union elections result in a first contract within a year, and 44 percent still don't have a contract more than three years after an election. Often, the result is that the workforce feels demoralized and has the propensity to hold a protest and walk off the job for a day or longer to get public attention, as Starbucks employees did at 100 stores twice in two months. HR must manage the situation in collaboration with the organization's media to ensure the truth is told.  

HR issues in 2023 hourly pay union

Promises of High Hourly Pay & Job Security

It's common for labor unions to promise workers they can negotiate a high pay increase and the benefits they want. Union organizers at Apple retail stores, Starbucks, and Amazon want workers paid $30 an hour. The Amazon Northern Kentucky Air Hub workers are getting ready to start a union organizing drive. They want $30 an hour, 180 hours of paid time off, and union representation at all disciplinary meetings. Starbucks Workers United wants baristas to earn $30 an hour, but the company has given them two pay increases in 2022 that take the average barista pay to $17 and expanded educational benefits. There is also a lot of misunderstanding about the economics of running a business.  

Job security is a major issue now and will become even more important should the U.S. experience a recession in 2023. Already the tech industry has laid off 77,000 workers in 2023 as of early February. There are also a number of plant closings planned due to economic reasons. For example, Energizer announced in January 2023 that it's closing Wisconsin plants in the next 12-24 months and laying off 600 workers who belong to the Teamsters.  

The U.S. government can't force companies to keep places of business open when it no longer makes sense to do so. Yet, labor unions often tout job security as a top reason to join a union, giving people the impression that they are assured of a job. When an organizational change is implemented, HR in unionized and non-union businesses faces issues like misinformation that hurts workers and the brand and a demoralized workforce.  

How Will Unions Organize in 2023? 

Labor unions are modernizing their approach to communication during union organizing. It's been an ongoing process, but they have learned they must communicate with employees the way people communicate with each other in their private lives and adopt the issues of importance to younger generations of workers, like employee voice and social justice.   

Social Media and Digital Campaigns 

Traditional labor unions and employees interested in forming independent labor unions are using social media and digital communications to organize, making it much easier to keep union organizing a secret from employers as long as possible. Workology, an information-sharing site for HR professionals, discussed data from a LabourStart survey of global trade unions on how unions use social media and technology to connect with employees. The first point made is that HR has been slow to adopt and understand employee and labor union social media usage.  

The survey found that labor unions and employees are aware of the sources of their web traffic and are experimenting with mobile apps, websites, and multimedia content for virtual organizing. Past successful campaigns include REI and Amazon. Union organizers have discovered TikTok is an excellent social media tool for communicating with and organizing Gen Z. Visit any labor union website – traditional or independent - and you will find an online sign-up.  

Continued Mail-In Ballots 

Mail-in ballots during union elections were permitted during the pandemic for health and safety reasons. Post-pandemic, Starbucks requested the NLRB suspend mail-in ballots for union elections at its stores, claiming the workers and the NLRB were acting improperly.   

On September 29, 2022, the NLRB issued a decision and allowed mail-in balloting to continue and the Regional Directors to use their discretion to order a mail-in ballot election based on a set of factors. The factors address mandatory telework status, COVID-19 positivity rate, inability to establish a manual election site that meets health orders or doesn't meet NLRB protocols, and CDC determination that a COVID transmission is high. 

The result is that labor unions will be able to continue mailing in ballots in certain circumstances, creating opportunities for errors and fraud in the election process.  

Continued Focus On Social Justice Issues 

Former NLRB chairman and current Georgetown Law professor Mark Pearce said, "We're seeing social justice combined with worker justice, and it's not only catching fire, but it's getting results." Social justice issues go beyond a group of employees choosing to unionize a workplace. It is also a focus on how employers intersect with communities. A focus on social justice includes the role of employers and labor unions in supporting civil liberties, economic equality, and social justice.  

The Raise Up the South movement IRI Consultant's Director of Business Development, Jennifer Orechwa, discussed is a social justice movement pursuing equity and equality. So too, is the Union of Southern Service Workers (USSW). Both have low-wage, and members are primarily people of color coming together across industries, including retail, food service, and caregiving. This is a type of movement you can expect to see growing stronger in 2023.  

The Art of Labor Relations CTA

What Are the Macro HR Issues in 2023? 

Your business works in a macro environment, so HR must take macro issues into account when developing and implementing HR policies and practices to attract, retain, and engage employees. Following are some big-picture considerations when explaining potential HR issues in 2023.

Rebuilding Trust with Employees and Leaders Post-Pandemic  

We live in an age of turmoil and disruption. The pandemic triggered social change, increased employee unhappiness, and a push for more vigorous unionization efforts. Many employees became disillusioned with the workplace and felt powerless to control their work lives while also worrying about their job security. Organizational leaders experienced high rates of burnout as they attempted to quickly learn how to effectively communicate with and manage a remote or hybrid workforce. Now employees are either quietly quitting or resigning, which puts more stress on your managers and supervisors.  

A recent LinkedIn report in collaboration with CensusWide found that 61 percent of U.S. workers plan on leaving their jobs in 2023. This is due to many reasons, but lower trust is an overriding factor. Despite fears of a 2023 economic downturn, 72 percent of Gen Z workers and 66 percent of millennials think about a career change. The younger workers, says Karin Kimbrough, chief economist at LinkedIn, want more pay, better work-life balance, opportunities for career growth, and flexible work arrangement. Those thinking about leaving their jobs and the quiet quitters don't trust their current employers to meet their needs.  

Are your leaders ready to restore trust in the workforce? Trust is necessary for employee engagement to be high. Employees may feel they were exploited during the pandemic, are exhausted from trying to adapt, and find themselves fighting back when employers want to end pandemic hazard pay or force workers back into the office full-time.  

Continuing Tight Job Market 

So much is happening in the business environment. Employees who don't like their workplace, as just discussed, can usually find a new job without much trouble. A labor market is tight when job vacancies are far more than available workers. For December 2022, the JOLTS report said the number of job openings increased to 11 million, the number of hires was 6.2 million, and the number of quits was 4.1 million. The largest number of job openings were in industries where many low-paying jobs exist and employees are leading unionization efforts. They include hospitality and food services and retail trade.   

Attracting top talent has changed considerably. Job candidates want to work for companies they can share values with, exhibit corporate responsibility, practice DEI, and support a strong employee voice. Your brand strategy should help your reputation as an employer of choice because the organization shares the same values with the talent it wants to attract. 

Changing NLRB Policies and Case Law  

The NLRB is pro-union and backed by a pro-union Biden administration. General Counsel Jennifer Abruzzo has a full agenda and plans on continuing to pursue changes to NLRB policies and case law that make it easier for employees to unionize and for unions to increase membership. For example, she wants changes to the independent contractor definition to force employers to reclassify many independent contractors as employees. Labor unions have two conflicting concerns. One is that reclassifying independent workers to employee status could reduce the number of union jobs. Second, unions are already negotiating contract clauses that are protections against an employer using independent workers over employees. This was the case for a new Teamsters locals contract for employees working for a Washington and Oregon grocery home delivery business.    

Other NLRB focus areas for 2023 include: 

  • Ending captive audience meetings  
  • Expansion of the joint employer standard so that more businesses are included in the unionization effort 
  • Pursuing "full interim relief" when seeking a full case settlement, in effect forcing an employer to concede an action was unlawful before the case was even settled. 
  • Framework for a situation where an employer is found to have presumptively violated the NLRA where its "surveillance and management practices, viewed as a whole, would tend to interfere with or prevent a reasonable employee in engaging in activity protected by the Act." (This addresses the use of management technology and artificial intelligence.)
  • Application of Weingarten rights in a non-unionized workplace 
  • Enforcement of a December 13, 2022, NLRB decision that allows for potential penalties (consequential damages) for unfair labor practices 

This is just a sample of how the NLRB will pursue union-friendly policies and regulations. The fact that the Republicans now control the House of Representatives means the PRO Act is not likely to be revived. But that won't preclude enacting various clauses through federal regulatory agency decisions and state and local laws.   

HR issues in 2023

Leadership Training Gains Even More Importance 

HR helps leaders stay up-to-date on labor relations and managing in a turbulent business environment where positive employee relations are critical to developing high employee engagement, a positive brand for recruiting top talent, and preventing union organizing. Gartner's survey of 800 HR leaders found that priority number one for 60 percent of HR leaders is leader and manager effectiveness.  

John Barker, Labor Consultant, also shares “Operational, communication, marketing, technology, safety, and continuing education decisions—even seemingly insignificant decisions— have the potential to create a large rift with your employees. So, to ensure a stable workforce and to mitigate your union risk, HR partners need to use their seat at the table to ensure that employees’ needs are being fully considered when decisions are being made. A good HR can show employees that they don’t need to look for another employer that will listen to them or seek out a union to be their voice.” 

Today's leaders must be "human leaders" with confidence, courage, and commitment. Your leaders must also be empathetic, adaptive, and authentic. They must put people first.  

HR has a full agenda for 2023 and 2024, and we can help! IRI Consultants to develop a practical HR strategy through our Labor Relations Readiness System that helps your organization prevent union organizing the right way – through leadership labor relations training and developing a high level of employee engagement. 

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