Are we in the beginnings of a cyclical upswing in industrial action in Australia? And if so, what does it mean for those involved in competitive tender processes?

Data from the ABS indicates that the last spike in industrial disputes occurred in September 2012, with around 110,000 working days lost. The sense that there may be another spike coming correlates with the enterprise agreement life cycle, as enterprise agreements typically expire after 3 or 4 years. Many businesses are currently engaged in, or planning for, negotiations for the next round of agreements.

In this climate, the potential impact of industrial action is particularly troubling for those employers who engage in competitive tender processes in order to win work. Organisations who put work out to tender are increasingly adopting sophisticated assessment criteria, which include many aspects of the tenderer’s business strategy – rather than just looking at price. One of the criteria that often has a high priority is how industrial relations risk (especially the risk of industrial action) will be managed and reduced. There is an expectation, if not a requirement, that tenderers will have a comprehensive plan to minimise the impacts of industrial action, and that innovative solutions will be designed by tenderers for that purpose.

Principals often award tenders for many years which means that the management of industrial relations risk requires tenderers to ‘play the long game’ in managing and pre-empting industrial action risks that might arise during the course of the contract.

In this context, tenderers need to think deeply about how they best position themselves in a competitive tender process. This requires careful consideration of the options that are available to get the work done. Traditional models of engaging employees might no longer be enough to convince the principal that the tenderer is trying to minimise employment risk. Demonstrating capability and innovation in managing industrial relations risk means looking afresh at workforce models, including:

  • creating solutions to the problem of enterprise agreements expiring during the course of a project;
  • rethinking reliance on one ‘supplier’ of labour and considering how multiple sources of supply might be engaged – to help minimise disruption to, or delay in, labour supply that might arise from industrial action; and
  • outsourcing some of the IR risk to other entities or stepping outside the traditional workforce engagement models.

While you might wonder if the current industrial landscape is really that tumultuous, or you may feel a touch of schadenfreude at the industrial action going on elsewhere (confident that your ship is secure), now is the time to think proactively about your system for managing industrial relations risk to differentiate your offer from competitors.