Benefits to a well negotiated enterprise agreement
A well-negotiated enterprise agreement can provide terms and conditions that support rather than obstruct business strategies and, as a result, make it easier to do business.
There is little doubt that enterprise negotiations, when done well, can improve engagement, trust and communication with employees.
What can go wrong with an enterprise agreement negotiation?
However, an enterprise agreement negotiation can also be resource hungry and time consuming. The agreement itself will have an impact on the organisation and its people for years beyond the actual negotiation.
And that’s before we even get into situations where negotiations go wrong and there’s industrial action or disputation as part of the process.
Why does it go wrong?
It is often a process for which organisations are not well prepared, and where organisations view the process as something to get through or be tolerated, rather than as an opportunity to maximised.
Planning to Achieve the Best Possible Outcome
Given the high proportion of wages and conditions as part of the overall cost of running an organisation, it makes sense to get the absolute best possible terms and conditions – the best bang for your buck.
This doesn’t necessarily mean the lowest wages or stripped back conditions, but rather wages and conditions that enable the organisation to meet its strategic objectives and financial performance rather than inhibit it. If your organisation is covered by one or more enterprise agreements, at their best they can be a very useful vehicle for just that; an enabler of business performance and a negotiation process that creates trust and engagement.
How to maximise benefit of an enterprise agreement
To maximise the benefit of an agreement, it needs to be considered as part of an organisation’s people plan or workplace relations strategy. Ideally, it is part of an ongoing workplace relations strategy, not just a one off event.
- Treating a negotiation like any other key project within the business is key to the success of a negotiation.
- This means resourcing it accordingly in terms of appropriately skilled people who have the available capacity to devote appropriate time to the process, rather than have it as an additional job for a reluctant participant to do on top of their already full load.
- It means doing robust research prior to the negotiations commencing.
- For example: what is the current state of play industrially, internally and externally?
- What are your competitors doing?
- What are the unions looking for (locally and more broadly)?
- What’s the current political environment?
- What works about the current agreement? What doesn’t?
- What’s on the horizon for the business over the coming five years, and how does this agreement need to meet those challenges and enable those changes?
- What is the risk profile of the negotiation compared with the risk appetite of the organisation?
Critically, it means engaging with the senior leadership team from the beginning and having senior sponsorship of the process, the desired outcomes, any risk and contingency planning.
It means creating a communication and engagement plan that ideally dovetails with other people strategies so that it’s a seamless and consistent approach to communication and consultation,
rather than an afterthought in response to employee discontent or grumblings.
And importantly, much of this planning is done well before any face- to-face negotiations commence.
Until next time, happy negotiating,
This article first appeared in this edition of the Squire Patton Boggs newsletter.