In 1919, the United States was gripped by two seemingly unrelated trends: a global pandemic (influenza) and a wave of labor unrest. Four million workers, or one-fifth of the workforce, went on strike that year.

Flash forward a century and history seems to be repeating itself. In the wake of the COVID-19 pandemic and other multi-layered economic factors, labor strife has shaken a number of economic sectors: automobile workersnurses in multiple UNITEDHollywood writers and actorsAND journalist everyone went on strike. Merger movements within technology and other non-traditional sectors soon arose. Could it all just be a coincidence, or is there something more going on here?

Any broad change in the dynamic between labor and management has implications for the present and future of employment in the United States. A deeper understanding of the forces at work can be valuable to a variety of businesses.

In analyzing the commonalities and trends from these recent examples, three lessons stand out:

1. Rewarding work for corporate success

When business is booming, executives who hold an equity stake in the company are rewarded. Workers lower on the food chain usually don't see a similar one increase in their wages. This phenomenon is nothing new; however, many workers were disproportionately hit hard in the 2008-2009 financial crisis and again during recession stemming from the COVID-19 pandemic. Now that the economy has improved in some sectors, employees are looking to recoup lost earnings and get what they feel is their fair share.

Questions like these motivated the United Auto Workers (UAW), which accepted lower wages for young workers after the Great Recession. Business results for auto companies improved significantly, and the UAW aimed to recover lost benefits and raise wages for all levels of workers. Their members, motivated by rising inflation and using their collective power, successfully made a significant step change in compensation and massive benefits increases. Similarly, Hollywood writers and actors have recently reached important agreements to navigate changing business models and protect livelihoods. The question is: did it have to be so difficult?

The bottom line: today's workforce is increasingly aware of how their companies are performing, and there is significantly more transparency in what their peers and superiors earn. They also have more avenues to mobilize. Work diligently and proactively to understand and design systems in which business success can lead to higher rewards for your workers to avoid the need for protracted negotiations.

Connected: 75,000 Kaiser Permanente workers strike, demand better pay

2. Employees without rights

When HBO's broadcast unit rebranded as “MAX” in 2023, it stopped crediting writers, directors, and producers individually. This struck a nerve within the guild representing each faction. Fears of AI adoption – addressed in the final settlement of the writers' strike.

The sense of disenfranchisement among workers upset with the management of their companies or their industries was not unique to labor strikes in entertainment. Although the money at stake in Hollywood may have been bigger, many fields of work risk interference from AI in a way that threatens workers' livelihoods.

Communication: Open communication from management about changes in company policies, practices and directions is essential. Businesses must evolve to stay afloat; the more transparent management is about that evolution, the less likely workers will feel wronged. Engage with them directly in the process to think about how changing technology can help, what concerns exist, and how to navigate them together to retain top talent and maintain high levels of engagement. With AI in particular, consider what skills will be required as business models evolve and how you can properly support and train workers along the way so they can use these new tools to help your business grow.

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3. Investors and owners can become disconnected from the daily reality of workers

Increase in venture capital and hedge fund investments in health care AND written journalism – to name two – fueled the drive to increase efficiency and profits. This left a number of employees, many of whom entered these careers with altruistic or public service-oriented mindsets, feeling as if their companies were becoming increasingly disconnected from their day-to-day work and, in some cases, values. / their reasons. to work in the field. Some of them either left their careers or became disillusioned, feeling that they had an incentive mismatch between the purpose of their work and the processes they were now required to follow.

Relationships: The more disconnected management is from its workforce, the more it invites the potential for misaligned incentives between the two parties. Bridging the gap is necessary as industries consolidate and the drive for efficiency continues. Reduce the knowledge gap between C-suite executives and field workers. Understand what motivates employees to do their jobs well and involve them directly in designing more effective and efficient processes – this will drive improved results, engagement and better change management as businesses evolve.

Connected: How your business can be ahead of the curve by looking back and thinking forward

In summary

How can managers anticipate the sources of labor unrest before it rises to the level of concern? The following practical considerations may help to achieve one or more of the objectives described above.

1. Structure incentives and compensation models so that everyone wins as business results improve.
2. Keep your employees informed of where business models are changing (eg streaming, AI, etc.) and proactively think about potential employee concerns and how to address them.
3. Involve employees directly in designing more effective and efficient processes and share your goals more transparently. Listen to their concerns and find a way to improve business results, but employee engagement and alignment is a strong part of the equation.
4. Demonstrate the value of “walking a mile in the employee's shoes” – have executives spend time doing the day-to-day work to better understand their thoughts, areas of opportunity, etc.
5. Establish a system of regular pulse checks with the entire organization to catch problems before they become significant.