Last week’s ruling by the National Labor Relations Board redefined the employee-employer relationship and granted employees new bargaining powers. While business groups have vowed to overturn the decision, brand and reputation managers should be preparing themselves to address the following key challenges.
Big brands are now more responsible for how their business partners and subcontractors treat their employees. Communicators must be prepared for a greater degree of scrutiny that could threaten brand reputation. What do they know about how indirect employees are being treated and compensated? When did they know it? If there are issues of concern, what are they doing about them?
The NLRB decision is a significant win for labor activists, breathing new life into what was beginning to look like a moribund movement. Brands should take a fresh look at how activists might target them and prepare to mitigate those risks proactively.
The relationship between indirect employees and big brands isn’t the only thing that’s changing; companies and their subcontractors must negotiate a new playing field, and that may also reshape interactions with full-time employees. Clear, consistent communications are required to dispel misunderstanding and ensure all of the brand’s "internal" stakeholders are aligned.
Politicization of the brand
Business groups and many notable brands are already actively engaged in fighting the decision, but for many brands choosing sides on any political issue is something to be avoided. Nevertheless, the decision goes to the very heart of how businesses conduct their affairs and most brands will be pressed to take a stand at some point. Navigating this without raising the ire of any one interest group will require deftness and tact.
Transitioning cultural norms
Beyond the details of the decision itself, the development is reflective of an ongoing shifting of cultural norms with respect to work and the workforce. What does it mean to be employed if you’ve never met your employer and never will? What responsibilities do you owe to each other? The line is being redrawn every day, fueled not just by regulatory actions, by innovative technologies and business models. Brands that do not grasp this central fact risk irrelevance.
The combination of these factors represent significant short- and long-term challenges to virtually every business in every industry, but especially those reliant on a franchise model. It is imperative for businesses to think about these challenges strategically and be prepared to manage them.
Nicholas Ludlum is an SVP and risk and reputation expert at Ogilvy Public Relations in Washington, DC.