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The Importance of Crisis Management in Your Company

There are many possible crises that can affect your organization or the manner in which you conduct your business. Such crises include union organization, wage and hour violations, key business alliance interruptions, computer and IT systems crashes, lawsuits and litigations, succession issues, and loss of a major customer. This issue begins a series of articles based from Doug Staebler’s summer meeting educational lecture in which he presented a system for identifying and dealing with threats and crises.

Crisis management is essentially the process of identifying events or series of events that could threaten the survival of your business, and taking steps to reduce the likelihood or severity of the event. Its an important function in every business, but one that is often neglected. There are always more pressing issues to deal with, or you just assume that “it will always happen to the other guy.” You may realize that it could happen to your business, but still have a hard time with crisis planning because it presents difficult questions and issues that no one wants to discuss.

However, the benefits of crisis management far exceed the obstacles. Planning for a crisis begins with identifying areas where your business is vulnerable, and gives you the opportunity to address those weaknesses in the organization’s infrastructure. Developing the proper plan reduces the chance of an event occurring in your business, or if it does, reduces the severity of the event.

Topic One: Union Organization Efforts

Most foundation contractors are open shop or non-union businesses. The thought of a union organizing effort strikes fear in the heart of most business owners. A union contract often results in higher labor costs, more restrictive work rules, and permanently alters the relationship between management and employees because of the insertion of a union steward into the communication equation. When a union is involved, management is severely restricted in disciplining or terminating employees.

There are also financial implications, such as higher employee wages and benefits costs, which are determined by negotiations with the union. Union mandated benefit plans are an expensive addition because they include the costs of union-performed audits, the potential of lawsuits for premiums, and related litigation costs.

Although pay is usually considered first, most organizing attempts begin because employees do not feel they have adequate communication with management. Accordingly, there are several things that a company can do to prevent a union- organizing attempt. First, an effective human resources person can provide employees with assistance in dealing with company fringe benefit plans and other payroll matters, as well as answer questions or resolve problems that routinely occur. Secondly, competitive pay and benefits is an effective weapon against organizing efforts. Pay and benefits that are well below union levels provide a foothold to a union with your employees. Thirdly, your organization should avoid partiality or favoritism with employees. Inconsistent handling of employees-such as promotions, pay raises, or discipline- can lead to unhappy employees who are more receptive to organizing efforts. Lastly, management should know employees by first name. It is amazing the positive impact created when leaders speak to their employees by first name. Employees gain a sense of belonging and of being valued by the organization. Plus, it can eliminate any communication barriers between leadership and employees.

Once a union-organizing attempt begins, there will be severe restrictions on management. Even routine events, such as awarding a pay increase or promotion to an employee, may be prohibited. In the event of a unionization effort, seek expert legal counsel. It is unlikely that your corporate attorney has the expertise or experience to adequately represent you in this area. The proper legal counsel is experienced in the process of negotiating union contracts, and can advise you on the best actions your company can take. Waging a campaign to defeat the organizing attempt, as well as negotiating the first union contract can be expensive, and will most likely cost your company $50 – 100,000.

The best chance to prevent the unionization of your workforce is effective management and leadership. Competitive pay, good communications, and the fair treatment of employees are the best defense against labor unions. Effective planning can help identify specific things you can do to make your business less vulnerable to the organizing efforts of a labor union. In the end, the cost of providing competitive pay or benefits will be far less expensive than the restrictive work rules and attorney fees typically encountered with a union contract.

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Concrete FACTS, a publication of the Concrete Foundations Association, is THE voice for residential concrete industry news, market intelligence, business strategies, technical solutions, product information, and other resources for professionals in the cast-in-place concrete industry. Subscriptions to Concrete FACTS is available to anyone involved or interested in the residential concrete industry as a service to your industry. Please contact CFA Headquarters to find out more about your free subscription or Email Us