Labor-Management Agreement When Developing Your Labor Rate Objective
A labor-management agreement is an essential component when developing a labor rate objective. The agreement outlines the terms and conditions that both management and labor will adhere to, ensuring that labor costs remain competitive while still providing fair wages to employees.
When negotiating a labor-management agreement, it`s important to consider several factors, including the current labor market, industry standards, and the company`s financial goals. Both management and labor should have a clear understanding of the financial projections for the upcoming year, as well as the expected level of demand for the company`s services.
To develop a labor rate objective that`s in line with the labor-management agreement, there are several steps that need to be taken:
1. Evaluate the competitive landscape: Research the prevailing wages and benefits offered by competing companies within the industry. This will give you a benchmark to compare your labor costs against.
2. Determine the labor costs for each job function: Identify the specific tasks and responsibilities for each job within the company and calculate the labor costs associated with each.
3. Review the labor-management agreement: Ensure that the labor rate objective is in line with the terms of the agreement.
4. Determine the labor rate objective: Calculate the labor rates necessary to achieve the company`s financial goals while still providing a fair wage to employees.
5. Communicate the labor rate objective: Communicate the labor rate objective to both management and labor, ensuring that everyone is aware of the company`s financial goals and how they relate to labor costs.
By following these steps, companies can develop a labor rate objective that`s both competitive and fair to employees. By negotiating a strong labor-management agreement and communicating the labor rate objective to all stakeholders, companies can ensure that they are well-positioned to succeed in a highly competitive labor market.