S02E17 - Insights from the 2024 HR Policy Global Employee Relations Survey
This episode of the Wild Side podcast reveals the findings of the recent global survey conducted by HR Policy Global among employee relations leaders. It explores how the role of global employee relations has evolved into a pivotal executive function and examines the alignment of current skills with future success. It offers ten actionable insights to ensure your employee relations function remains adaptable and effective in the evolving global landscape.
Transcript
Hello. I’m Alan Wild and welcome to the Wild side podcast Managing employee relations in global and millennial times … 10 minutes at a time. Today’s episode looks at the results of a survey of employee relations leaders conducted in 2024. It examines the evolution of the role over 30 years and asks the question whether the skills that have been honed over a quarter of a century will be sufficient to address the challenges companies will face in the future. We conclude that the global employee relations role has established itself as an essential one … guiding companies through the complex challenges of offshoring, restructuring and dealing with organized labor and representatives of employees in the various ways they present themselves across the world … from recognition battles in the United States to managing works councils in Germany. We suggest however that excellence in the role of international fire fighter will not be enough to face a future where AI will shape where and how jobs are done across the world: Where new supply chain laws and activist shareholder activities expose vulnerabilities that can be exploited by international NGOs and trade unions: Where laws on pay equity and transparency open new doors for those seeking to criticize companies: And finally where collective employee voice is not limited to that exercised by organized labor. Finally, in a world where new problems emerge and resources are limited, ER leaders must be better at setting priorities and predicting the future. At the end of the pod we will offer ten pointers to make the function “fit for future”.More of all that in a moment … … as you know, I’m Alan Wild, senior adviser on global employee relations for the HR policy Association … the leading voice of CHRO’s today.
In the summer of 2024, HR Policy Global conducted a member survey examining the evolving role of the Global Employee Relations leader. The survey population of 87 major international companies represents a return rate of 70% of HR Policy Global member companies. The responses are predominantly from U.S. headquartered companies so be aware of that bias. The survey offers a unique insight into the role of the global ER/LR leader today; how it has developed over recent years; and suggests where it should go in the future. The challenge I’ve given myself today is to talk you through a story that is best told in pictures … in the survey report itself. I’ll do my best … and if I only whet your appetite for more … ask me for a copy of the complete findings by dropping me a note on [email protected] and I’ll get one to you.
The history of the global ER/LR leader role suggests it was born out of necessity rather than strategy. From the mid 1990’s companies engaged in substantial internal business restructuring and the relocation of manufacturing and services to offshore
locations like China, India and Central and Eastern Europe. At the same time, new international legal pressures like the European Works Council Directive and stakeholder campaigns based on international labor standards made the external environment more challenging. In the face of these challenges, three quarters of companies surveyed say their influence on business decisions has increased in recent years. More than 80% of responders say their influence on people decisions has increased.
If we turn to how the function is structured, there is no single or simple formula for how different companies organize or spend their time. We asked responders to explain their priorities in three areas; Labor relations; Employee Relations; and Case Management. ER leaders’ responses varied by company depending on the extent of engagement with organized labor. At the aggregate level, the focus for companies is around broader employee relations management, and with employee experience at the top (67%). Conflict management in both individual and collective forms plays an important role (56%), with engagement in pure labour relations activities just behind (38%). At the more detailed level, the management of labour relations dominates the agenda for companies with high levels of trade union and works council influence. In these businesses, managing the relationship with trade unions, the conduct of collective bargaining and works council management rate highest. Leader roles today tend to be either LR or ER focussed, depending on the company and the industry. They also vary by geography. In the United States priorities more focused on employee experience with the end of influencing employee choice in trade union representation. In Europe bargaining and works council management skills are to the fore. Indeed, many companies separate US and Canada activity from that in the rest of the world.
That said, the direction of travel is to convergence. Interviews of survey participants suggest that the current divide between ER and LR dominated functions is starting to close. Labor dominated organizations are spending more time on employee experience initiatives. Conversely companies with a history of little or no organized labour are seeing collective employee voice increasing and engage actively in defending employee choice in workforce representation. In Europe, for example, post COVID initiatives involving restructuring amongst salaried staff, recent pay awards below employee expectations and “return to office” policies have led to the establishment of new works councils. In the United States, trade union organizing has made the media headlines and alternative social media driven forums for employee voice have increased.
ER/LR leaders have become experts in intervention on priority issues across the globe … if you like “global fire fighters”. Their work has involved driving international restructuring initiatives; bringing rigor to the bargaining tables the company is involved in; the management of relationships with organized labour around the world; defending employee choice in workforce representation; and resolving bottom-up escalations.
Turning to the future pay equity, supply chain, AI, dealing with crises and the gig economy rank much lower on the agenda of ER leaders today. But these are the pressing issues for the future. Artificial Intelligence will underpin future productivity improvements in many businesses, and this is countered by new legislative proposals and trade union campaigns against so-called algorithmic management. New legislation and increased stakeholder activity on human rights in the supply chain offer new tools for labor and human rights activists - if you doubt this listen to Podcast 17. All these issues will demand significantly more attention going forward.
The survey suggests that many ER leaders believe they are stretched for resources. In a world with new challenges and the requirement to continue fixing immediate issues, the answer is to set priorities based on future based risk. For many companies the establishments of an ER strategy based on future based risk assessment remains in its infancy as does the use of analytics to facilitate the placement of resources in the operations, sites and countries most at risk.
Finally, ER leaders recognise that minimising employee relations risk rests in increasing the competence of the line managers and HR partners closest to the interface with employees.
In summary, the ER/LR function has evolved in a relatively short period of time and has become an essential part of business management. The most successful ER/LR leaders today are those who have the knowledge and experience to drive top-down corporate initiatives in different geographies at speed or to intervene in bottom-up local conflicts as “expert of last resource”. This “firefighting” role will always be important and is the ticket to a seat at the top, and strategic, table. Going forward, respondents acknowledge that future success will be based on more strategic leadership in new areas based on forward looking risk; more organizational clarity; cross functional cooperation; and the building of people management capability in line managers.
So, what are the 10 top actions for CHROs and Global Employee Relations Leaders that will make the function “fit for future”?
- Develop a forward-looking global employee relations risk map for your business;
- Build a specific ER chapter into your business Human Resources Strategy;
- Map your current ER capability against the risk map;
- Build a monthly employee relations and employee voice health dashboard using HR and business performance indicators for medium and high-risk countries and sites;
- Develop an ER events calendar including dates of company and sectoral bargaining processes and a works council election timetable;
- Establish a formal ER presence in teams responsible for sustainability reporting, application of AI tools in the workplace, pay equity, contract and gig workers, DE&I, and crisis management;
- Establish a routine for ER major issue reporting and rapid response actions;
- Assure an understanding of Global employee relations risk for all policy makers with international scope;
- Build ER capability for HR and line managers associated with the risk map;
- Monitor what is happening in your geographies and industry around the world.
I’m Alan Wild, and you’ve been listening to a walk on the wild side.