Works Councils and Unions: Friend or Foe of HRO?

How to turn cynics into believers by engaging these organizations before executing on HRO decisions.

by Jemima Fitzgerald

HRO was dealt another blow towards the end of 2005. As Unilever neared the final stages of what is likely to be one of Europe’s—if not the world’s—largest and most complex HRO deals this year, we heard news of what had become increasingly prevalent in Europe in 2005: industrial action.

Everybody would agree that employers do not go out of their way to deliberately antagonize and disillusion their workforce, and we would probably all agree that no worker really wants to go on strike. Why then,  do we still find these two parties at loggerheads when it comes to HRO?

Employers do not engage nearly early enough with employees, unions, and works councils. They often “tell” people what is going to happen in a haphazard and incomplete manner and then unsurprisingly receive a negative reaction. On the other hand, unions do not really understand the sourcing agenda and will often hide behind the law and a poorly delivered message rather than engage in a real debate. Many organizations (unions and employers) build their relationships at the local office or plant level, investing no time in building relationships at the regional, national, or international level.

The secret that must be understood by all is that timely constructive engagement, at all levels and before decisions are taken, is a prerequisite to the successful implementation of any sourcing strategy. So what can you do to minimize the likelihood of industrial action when it comes to outsourcing?

  • Step One: Engage Now. Instead of waiting for an issue to arise, engage your workforce to help everyone understand what all of the issues facing your business are. Take time to ask the works councils what they see as threats to their organizations. Work together to solve both sets of challenges. Use each other’s skills, learning, and experiences to understand how you both work. When difficult or contentious issues arise, you have a platform for resolving, or at least understanding, each other’s positions.
  • Step Two: Health-check on Sourcing Solutions. When considering what options may be available to your organization, it is important to test the receptiveness of your employees to different options. This can be done through formal or informal methods and can be as simple as consulting your employees on their views of their current service and whether it can be improved through employee satisfaction surveys.
  • Step Three: Testing of Internal Business Case. You’ve decided that something needs to be done and have developed an internal business case for a future state, which you now need to test with your key stakeholders. This is an excellent time to involve your unions and works councils. In doing so, you put them at the heart of developing solutions with your organization, and this helps encourage buy-in for the final solution delivered.
  • Step Four: Engagement in Outsourcing Program. Assuming you decide to outsource, you will now be establishing the program that will manage you through the process and move your communications from an informative, high-level view to consultative and detailed involvement. You need to have a dedicated work stream that focuses on communication with everyone, and you should be working with them to understand what level of involvement is desired. If you have established a good relationship with your unions and works councils, it is an excellent opportunity to use their representatives as part of your evaluation team.
  • Step Five: Continue All Communication During Negotiations. At the negotiations stage, you enter into formal consultation. It is imperative that while you are holding detailed discussions, you continue to supplement this with informal discussions, keeping an open and honest relationship that has been developed.
  • Step Six: Transition Involvement. Finally, just because the contract has been signed, it does not mean the unions’ or works councils’ involvement is no longer required. This is a critical step, and it is important to have these bodies on board to help deal with any queries, concerns, or issues during the transition.


Managing the relationship with your unions or works councils is not an easy task. There will always be times when your views differ, particularly when going through large-scale programs such as outsourcing. However, by acknowledging your respective differences and through practice, an honest endeavor, and the will of both partners to work together, you have a far greater shot at ensuring success.

Tags: Consultants & Advisors, HRO Today Global, Professional Contribution

Recent Articles