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Take The Pain Out Of Union Negotiations With Personnel Budgeting From ClearGov

Union negotiations are an essential task for many local governments. Depending on the location, 75% or more government employees may be represented by a union. Like any union, public sector unions focus primarily on strengthening workers’ rights and working conditions, securing fair wages, benefits and longevity pay, and guaranteeing workers’ safety. 

But union negotiations can be downright painful. 

At the end of the day, everyone wants to come to a fair and reasonable deal. But how they get there is not without its share of (a lot) of pain points. 

Let’s take a look at some of the common challenges associated with traditional union negotiations, and how a cloud-based personnel budgeting solution is an invaluable tool to bring to the table for real-time dealmaking.

Negotiating With Unions Is Like Buying A Car

Union negotiations are a lot like walking into a car dealership. You come to the table with a wish list, you do some haggling, and both parties come to what seems like a fair and reasonable deal. But can you afford it? After hours in a mysterious backroom ‘running the numbers,’ the salesman comes out and says no dice. So it’s back to the negotiating table. 

Union negotiations are very similar. The biggest difference is that instead of hours in a mysterious backroom, it can take days or even weeks for a government’s controller or finance department to run the numbers and determine the feasibility of the deal.

And you know how the saying goes, time kills all deals… 

After extensive negotiations, to have to come back to the table and renegotiate is not only frustrating, but it erodes trust and makes the government appear incompetent. Every city manager or government employee who’s ever been sitting at a union negotiation table would give anything to have those numbers in real-time – to be able to plug in the data for what seems like a fair and reasonable deal, and see if they actually can afford it.

A Look Under The Hood: Why Are Union Negotiations So Complicated?

Like car deals, union negotiations involve many, many moving parts. And all of them are interconnected and have a cascading financial impact across multiple parts of a government’s budget. 

Before agreeing to any new contracts, a government has to make sure it makes financial sense. And the only way to do that is to ‘run the numbers.’ When a city manager returns from a union negotiation session, they ask the controller or finance director to see how a proposed deal impacts the city’s budget: today, in one year, and possibly even into the next five years depending on the length of the proposed contract. If the contract is replacing one that expired years ago, there may even be retroactive pay to consider. They have to figure out where money is going to come from and if they’ll need to raise taxes, and the controller ultimately ends up creating many scenarios to cover all the ‘what ifs’ surrounding each proposed deal.

Another layer of complexity is added when a city is negotiating with multiple unions or multiple divisions within labor unions. Sometimes you have to manage comparisons and expectations ( i.e., “If they got that, we want it too!”). For governments that have employees under multiple unions, they try to look for pattern bargaining. If they can identify a framework of the agreement and apply it to other contracts, they can (sometimes) avoid the complications of negotiating with multiple groups.

In addition, for governments that utilize outside council and labor lawyers – whether to take part in negotiations or draw up and review contracts – they could be bleeding out money left and right as the negotiation process drags out.

The whole process is ultimately in the hands of the controller or finance director, who typically run reports from their accounting software and then manipulate data in a spreadsheet to determine the viability of each deal. It’s a very manual, skill- and labor-intensive process. In most governments, there is typically not a deep bench of staff that can manage union negotiation scenario planning with both speed and accuracy.

Because of the nature of the work, by the time the numbers are run and everyone returns to the negotiation table, there are almost always errors. Big or small errors — it doesn’t matter. Because of the cascading impact that union contracts have on a budget, errors require hours of manual reconciliation to trace back and resolve.

The Finance Department Has Other Work To Do

Being the person in the hot seat at a negotiation table certainly isn’t a walk in the park, but the real work happens behind the scenes when the finance department has to see how all the potential scenarios impact the budget — the budget that they spend the better part of half a year carefully developing.

Unlike the annual budget, which is cyclical, many controllers prefer to handle union negotiations at other times throughout the year. To say union negotiation scenario planning is time-consuming is an understatement. Many controllers work late into the night on scenarios because there was no time in the day and they needed quiet time to focus on the tedious nature of the work.

It’s a cumbersome process for the controller or finance director heaped on top of their day-to-day tasks.

Wouldn’t It Be Nice To Run Scenarios In Real-Time At The Negotiation Table?

Indeed! That would be your city manager and controller’s dream come true! Just like sitting in the car dealership, it shouldn’t take five hours to figure out that you can’t afford the “Luxury Edition,” but you can afford the “Sport Edition.” And it shouldn’t take five weeks to figure out if a 1% salary increase for parks and rec employees will break the budget.

City managers don’t want to bombard their controllers with requests for a million scenarios. Most would appreciate the ability to have budget numbers in front of them at the negotiation table — to be able to plug in a scenario and see how it impacts the budget. It would effectively turn a negotiation session into a problem solving session and significantly speed up the process. If there is trust across the table, the city manager could even share the numbers transparently so that they could work together with the union representatives to make the deal work. To be able to do that in real-time, versus waiting days or weeks to run the numbers, would allow governments to control the pace of negotiations and rely less on the finance team.

ClearGov Personnel Budgeting is the Perfect Solution for Managing Union Negotiations.

Personnel Budgeting allows you to analyze the effects of adjustments to salaries and benefits for more informed negotiations. It’s simple to set up units to include the cost of all benefits and additional pay, and you can easily create multi-year scenario plans and see how tenured union employees will go from one step to the next. You can easily make cost of living adjustments and merit adjustments at the person, job, or unit level to streamline the process, and you can even create scenarios for the various multiple unions within your organization.

Notice how many times we mentioned the ease of use? ClearGov’s Personnel Budgeting platform truly is a tool that your city manager, or whoever is handling negotiations, can take right to the negotiation table — without the help of your controller or finance director.

Streamline your union negotiation process, get deals done faster, and alleviate the burden on your finance department with ClearGov!

July 19, 2022

Matt Benati

Matt Benati is Vice President of Marketing for ClearGov®, the leading provider of Budget Cycle Management software for local governments. Matt is passionate about helping organizations modernize their annual budgeting process by automating workflow, increasing collaboration, and improving transparency between governments and citizens.