In many of the current pay negotiations (both in the public and private sectors), there’s a clear gap between the proposals made by the opposing sides. Of course, some movement will be required by one or both parties if a deal is to be done.
Reviewing past events and giving thought to what you want the future to look like can help us when thinking about what a realistic proposal would be the here and now.
At Savage Macbeth we believe it’s important to remain objective throughout the whole planning process. People don’t often give enough thought to where they might pitch their proposals and (if the need arises), how to defend (or subsequently move from) that position, if and when, they’re challenged.
They should consider assessing their own real level of flexibility more frequently on any given issue (avoiding the danger of negotiating with themselves first). The expectations of their own stakeholders need to be understood, managed, and reflected in their negotiating approach.
Other factors relating to the balance of power might include considering alternative solutions, the impact of time and/or the issue of precedent.
These sorts of situations can play out in real life all too easily – current issues such as the cost of fuel, energy and consumables will affect both sides to some extent.
An example of a cautionary tale is the dispute between the Fire Brigade Union (FBU) and their Employers back in 2002. Andy Gilchrist, an ex-fire fighter himself, was the General Secretary of the FBU in 2002. After months of an ongoing dispute about pay, he sent a letter to Phil White the Assistant Employers’ Secretary on the 1st July of that year. His demands for the workers were as follows:
An increase in basic pay for firefighters to £30,000
Equal pay for emergency fire control operators
A retaining fee of £7,500 and an hourly rate of £13.74
A more appropriate pay formula
This wage demand represented a 40% increase. This claim was presented with the following comments in Andy Gilchrist’s letter:
“…the FBU members have been actively modernising the Service…despite understaffing and under-funding…”
“…reward first class service provision and the implementation of new, increasingly complex skills”.
When it later became crystal clear that there was only very limited budget available from the employers and the government, Andy Gilchrist personally recommended that his members accept a counteroffer which was ultimately worth 16% over three years (linked to changes to working conditions) – 60% less than the original demand.
Unfortunately for Andy, he was subject to the crashing waves of (unstructured) expectations. Hard line members of the union (a small, but key number of stakeholders), were very disappointed, as in their eyes, the offer fell massively short of their original demand of a 40% rise.
With member unrest generated, perhaps it’s no surprise that just under three years after the initial request for 40%, Andy lost his job. He was heavily defeated in the next union leadership ballot by Matt Wrack 12,833 votes to 7,259.
Learning from others’ past actions, the takeaways for the negotiators in the present discussions are as follows:
Consider possible implications when planning where to pitch your first proposal. If asked, could you credibly explain why you pitched there? What reaction are you likely to receive and how would you respond?
Pressure test and agree your level of flexibility in your planning – if you don’t, you may end up agreeing a deal you shouldn’t; or walking away from a deal which could be acceptable.
Objectively review the power balance, including an assessment of all your stakeholders – big and small. It could mean the difference between a job and a P45 further down the road!
Sam Macbeth, 17th January 2023
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