Human Capital and the Union
Unions in ups are and will continue to feel the effect of both technology and innovations. New innovations continiously feed the hunger consumer oriented market for the latest products; increasing the e-commerce business. Companies like UPS constantly needs to rethink their business model in order to compete against FedEx, the United States Postal Service, and eventually against their soon to be ex-partner Amazon.
Technology is an essential tool in the growth of ups. Increasing productivity necessary while driving down cost. The members must understand understanding the change is necessary. Understanding the concept of human capital simply means that the company does see each individual as a number, but when the word human capital is used, one must understand that they are simply measured in their potential productivity. To be productivine,
UPS has changed their business model to hire gig employees, invest in their wellness program ( a program that promotes exercise, proper eating, and safety), and technology. it approach toward safety and your eating habits. From the point of view of a union employee, these steps will eventually lead to the extinction of the union, while at the same time ensuring the continued growth of UPS.
Human capital is a term used in describing the individual. More specifically the working individual within a society. Within a society, a government must invest in such things as an individual’s health and education in order for that individual to live a productive life, which in turn promotes a countries economy. Within the environment of a company, a healthy and productive employee is asset a company desires. UPS has invested time and money into its wellness program to ensure their employees are educated on the importance of exercise and good eating in order to be a productive employee. Health in the form of health insurance and good pay is another necessary factor. These two factors were negotiated by the labor union rather than given by the company. Unions negotiated the benefits enjoyed by UPS employees. Unfortunately, on two fronts the one aspect of human capital that neither the company or the union invest in is education.
The first is union members being educated in the use of the new technologies being introduced the UPS system. These technologies more than likely will be operated by contractors. Contractors are the by product of the new gig economy. This informal employee, an individual not the type of employee that will remain employed by UPS for a long period of time, will enter the UPS system not being familiar with the culture of unionism. This is a benefit to the company, but a detriment to the union. The culture of unionism will be impossible to cultivate with a class of cultures.
The new era of the 4th industrial revolution does not promote the social interaction of revolutions past. Technology has promoted an environment in which individuals can interact with each other through social media, but at the same time not engage on a more personal level. This type of interaction is needed if the unions are to survive. The introduction of the gig employee will also further erode the union, as the new gig employee will have the concept of contractor embedded in their psyche rather than the idea of a team player. Selling the ideas of the good of all compared to self is even more difficult to sell to an an individuals who earned or earns the living by being a free agent or contractor.
What is unfortunate is the fact that the union is not actively recruiting these members into their ranks as they union is poorly equipped to educate these individuals in regards to the benefits of being unionized. Over time losing union jobs to the technology and gig contractors could jeopardize the union’s strength years from now when negotiating contracts.
A culture will exist within UPS where both informal and formal employees coexist in the same work environment. This system will enable the US to have more flexibility in introducing new technologies and not have to deal with the constraints of unions and the contractual language of job titles/duties. UPS will have the ability to bypass the union as they introduce large numbers of informal employees into their system. These job, could be high paying, depending on the durites and positions, but they will not be unionized or more than likely positions offered to the formal/union members presently employed at UPS. A divide will be created in the attitudes between the two types of employees, similar to the protectionist attitude displayed by individuals within a nation.
The second part of the education argument lies in the fact that neither the union nor UPS are addressing the issue of educating the union member (formal employee). UPs does not spend either money or time in the education of their formal employee in the use of the new technologies. The two issues that arise if such education were given is the fact that the formal employee is unionized. The second issue is the fact that the formal employee already earns a salary that could be simply be reduced by hiring a contractor.
This in effect does not give the formal employee the ability to transition into another position that is created by the technological advances. The union did not address this issue during the last contract negotiations, choosing instead to concede to a two tier system in exchange that UPS implement certain technologies. These factors make it difficult for these employees to transition into a new position as UPS is transitioning into a 21st Century entity. This fact severely hampers their ability to make any type of lateral or elevated move within the company. Without a true understanding of how technological advances or the new gig economy UPS is transitioning to, the formal employee will suffer as they will eventually be pushed out of the company or at the very least, be left behind as they will not be able to compete with those who have grown up in the new gig economy.
The changes are already one the way within UPS they have already experimented with the idea of drones delivering packages, replacing delivering personnel, but of course adding jobs on the informal technological side of
UPS has already created automated factories that both increase productivity and reduce human errors. Jobs have been created, but have jobs been eliminated. This I discussed when the union members were confronted with the issue of a two tier system, not understanding the Teamsters had to deal with the issue of technology replacing the individual. Many felt the Teamsters sold out, but in reality, the Teamsters is dealing with the changes technology brings. Issues of salaries and healthcare were front and center as issues as was the issue of how much investment UPS has planned for in the realm of human replacing technology.