Advantages & Disadvantages of Unions for Employers

by Kay Lee; Updated September 26, 2017

Unions are groups of workers that have organized in order to speak as one voice to their employers. As an organization, a union can negotiate for such issues as hours, wages and work conditions. The process of negotiation and creating an agreement between workers and employers is called collective bargaining. Not all workplaces are unionized, and there are advantages and disadvantages for employers in dealing with unions.

One Voice

One advantage for an employer in having a unionized workforce is that instead of having to negotiate on an individual basis with each employee over terms and conditions of employment, the employer can deal with union representatives who speak on behalf of a group of employees together. This allows a business to efficiently negotiate with its employees, as marginal requests are eliminated prior to discussions with the employer.

Stability

Another advantage for employers to have unions in the workplace is that negotiations are completed for a period that extends contractually into the future. This affords a business the time and ability to plan its use of resources, as well as incorporate workforce and union issues into its long-term business strategy. This stability can also be a disadvantage, because it does not provide flexibility for an employer to adapt and change courses in the event of a bad economic climate or unforeseen corporate incidents.

Economic Strikes

Factoring into the stability consideration, unions pose a significant source of pressure on employers, as they may strike in order to make demands on the business. Although employers can continue to operate during a strike, they have to hire temporary replacement employees during the strike. As a result, there will be institutional knowledge lost and a likely decrease in productivity during the period when the unionized employees are on strike and the new inexperienced and temporary employees are brought in.

Higher Costs

Another disadvantage of unions to employers is that unionized workers typically have higher wages and more benefits than non-unionized workers. This means that the costs to employers are increased for the workers who have joined a union. Being unionized is no guarantee that the employees will be better trained, more educated and a better workforce than non-unionized workers.

About the Author

Kay Lee began freelance writing for Answerbag and eHow in 2010. She is an attorney in Washington, DC, practicing since 2006. Lee specializes in employee benefits and executive compensation. She holds a Juris Doctor from the Columbus School of Law and a Master of Laws from Georgetown University Law Center.