The Difference Between Union & Nonunion Companies

Union or unionized companies are businesses that hire employees that belong to a union, a legal organization that represents the employees and manages, at least in part, the hiring process. There are different types of unions, based on the industries they work within, and companies that work with unions have several common qualities that differentiate them from businesses that do not use unions.

Unions are responsible for creating many different rules in the industries they are a part of. Some of these rules apply to employees and the training they must go through, but many also apply to the companies that hire union workers. These companies must provide workplaces that promote worker safety and health. Of course, good companies will work toward these aims anyway, and state or federal governments have their own safety rules. But unions often add extra guidelines to make sure that workers will not be mistreated or put in danger.

Union workers, on average, are paid more than employees who are not part of unions. This means that union companies must expect to pay more in compensation. Many companies balance this by offering fewer benefits to employees, but only up to a point; most unions also require companies to offer certain benefits, such as health insurance. This is one reason that unions are popular among employees, and it is also a key point of negotiation between companies and unions.

In general, companies that work with unions have higher payroll costs, whether from extra compensation or simply the costs of negotiation and meeting union guidelines. But companies want to make profits for shareholders and business expansion, so union companies often incorporate strategies to offset these extra costs. Often they raise prices on their services or products, or cut costs throughout departments. This can lead to higher prices for consumers, but it can also help foster company innovation and efficiency.

Companies that work with unions also have a detailed representation policy. Unions use their representatives to negotiate for higher wages or other changes. The companies involved in unionized industries create representation plans for themselves as well. Often state and federal laws outline this representation process so both sides can negotiate without bias or confusion. Companies without unions can also have representation policies, but they are rarely maintained as strictly.