ORG Blog

Involving Union Leaders in the Budget Cycle Reaps Bottom-line and Relational Impact

Of all the management rights, budgetary responsibility is perhaps the one most tightly held. At the same time, some of the loudest laments we hear from management leaders are that employees do not understand the business, or the budgetary realities and financial constraints under which they must operate. Therein lies the root of a vicious cycle: in the spirit of protecting a coveted management right, leaders may inadvertently perpetuate an informational vacuum, which gets filled with misinformation, rumor and hearsay.

In our experience working with management and labor leaders as a “joint” client, we have seen many examples where sharing budgetary information became the basis for increasing employees’ business understanding. Removing the budget mystique stopped the vicious cycle in its tracks, and in fact, converted it to a virtuous cycle with innumerable benefits that included higher levels of employee commitment, more productive labor-management relationships and greater levels of trust between management leaders, union officials and employees.

Here are several approaches that can enable any organization to expand awareness of and involvement in the budgetary process, without sacrificing one iota of management’s fiduciary responsibility. In fact, these approaches have routinely resulted in improved budget performance.

1.     Form a Joint Leadership Business Team

The work Overland Resource Group does with clients very often involves establishing a cross-functional business leadership team comprised of the leaders from the major functions and unions that represent employees in the organization.  These teams don’t usurp management’s rights or responsibilities; rather, they create a forum for increasing business understanding, improving cross-functional relationships, and inviting involvement. Learning to manage within the budget together is one of the first tasks that helps this team get their collective heads around the operation and become an effective and credible group, capable of heading off issues before they fully develop, and seizing game-changing opportunities.

2.     Involve Union and/or Workgroup Leaders in the Budget Setting Cycle

Most facilities are accountable to a higher power, be it a corporate headquarters, a board or in the case of government agencies, Congress. In those cases, the budget cycle is an even more painful process of negotiation, tinkering and addressing unfunded mandates.  When that process is only undertaken by the top manager of the facility he or she leads, the employees are left not knowing about the nature and substance of the give and take involved in setting the year’s budget. This leaves them doubting decisions that stem from the murky budget process, questioning management’s competence and/or wondering whether their leaders are deserving of their trust.

Witness an alternative: at one of the world’s largest airlines, managers began taking one or two union and non-management leaders with them to the budget negotiation meetings at headquarters. What the process observers saw first-hand was not the back-room machinations among management conspirators they had imagined. Instead, they saw their leaders fighting for the resources needed to balance productivity and quality of work life; they saw the unavoidable constraints that are created when looking across an entire system instead of just locally; and perhaps most importantly, they saw their leaders emphasizing the dedication of the employees. Seeing this strengthened the confidence local leaders had in their partnership back home. And it often altered fundamental perceptions of senior management, organized Labor, and the workforce. When the attendees communicated back to their members and co-workers what they had witnessed and learned, it created a stronger sense of team, and added a level of credibility to the efforts to engage everyone in collaboration and continuous improvement.

3.     Balance Labor-Management Interests through Joint Planning.

One of the inherent tensions in a facility is that achieving business outcomes requires management to utilize resources in the most judicious way possible, while unions or non-management want to increase the resources and personnel available.  That tension is an important constant, but a way to manage it is to establish resource teams who both understand the requirements and know how to make a business case for their budget proposals.  It almost always turns out that there are employees who are bona fide business mavens, either because they are naturally attracted to business information and competencies or very often because they own or have managed their own small business.

We worked with a set of facilities in which manning/staffing was the key area of contention between management, non-management, and union leaders. Joint bid committees were formed that included front-line managers, financial analysts, crew chiefs, and crew members. It was the job of these resource teams to jointly illustrate the requirements for staffing and how they might best be filled. To make this process as user-friendly and effective as possible, we worked with clients to develop large magnetic boards and bid-building software which made complex staffing requirements starkly visible to everyone, facilitating informed conversations and group problem-solving.  People very often created a menu of solutions that took into account revenue/cost and resource trade-offs. They also educated the rest of the workforce on the resource requirements and solutions.

The bid committees discovered that the process dissolved some long cherished myths regarding staffing, and that people were much less apt to complain about staff levels when they understood the requirements, understood the process that went into filling those requirements, and most importantly, understood that supervisors and union leaders had advocated for the best possible solution within the budget constraints. In most cases, everyone also discovered that the gap between what management wanted for staffing levels was not as far off the mark from what the employees thought was necessary as everyone had previously supposed.

Although these teams were focused on staffing, the same approach could be used for allocating any resource, such as equipment or scheduling.

If these steps sound like they fit in the impossible column, those who took them would have said so too, prior to the establishment of collaborative processes and the experience of improving the operation together. Even then it took courage and a leap of faith by leaders on all sides. But what we’ve seen over and over again is that the most difficult part of involving unions in the budget process is the initial decision to try it out. If the invitation and implementation are well thought through, sincere, and include a solid but simple business education component, both management and the union invariably step up to the task, raising collaboration and results to new heights.


Marc Bridgham is a member of the Consulting Consortium at Overland Resource Group and President/CEO of The Triskelion Group. Founded in 2002, The Triskelion Group focuses on deliberately and effectively igniting the combined forces of Commitment, Creativity and Community that live within any organization, and aligning those forces to achieve rapid and dramatic improvement in business results. Marc can be reached at Please add your comments about involving union leaders in the budget cycle. We would love to hear your opinions.

Topics: Collaboration Labor Management Leadership Sustainable Change