The shift in power within American companies has been discussed for quite some time. Through movements such as “Me Too” and “Black Lives Matter,” people who had previously been considered socially disadvantaged have gained power. Following the shift to remote work during the pandemic, a major trend has emerged in which power within companies has begun shifting from management to employees. According to Gallup’s statistics for this year, 71% of Americans support labor unions, the highest level since 1965.

This trend is said to indicate that the pendulum of labor-management relations has begun swinging significantly toward employees. It is said that a new 50-year cycle began in 2010, when American public support for labor unions reached a low of 48%. If that is the case, employers must be prepared for increasing demands from employees over the next 40 years or so. In addition, marijuana has been legalized in many states, the number of people experiencing mental stress is increasing, and growing awareness of DEI (Diversity, Equity, and Inclusion) has brought greater attention to socially disadvantaged groups. Under these circumstances, it seems fair to say that the burden on employers will only continue to increase. This also means that Japanese companies operating in the United States will face a growing possibility of becoming involved in employment disputes or, in more serious cases, lawsuits.

In fact, the number of companies already involved in such disputes is increasing. Some Japanese companies are facing class-action lawsuits over gender discrimination, others have been sued for racial discrimination, and some are even fighting allegations of interference with labor union organizing in the Supreme Court. Labor unions have also gradually begun forming at more Japanese companies. It is clear that once a labor union is formed, managing the company becomes even more difficult.

So, in light of these trends, what can companies do to protect themselves from employment disputes and similar problems?

The only effective defense is internal communication. Even if companies impose stricter rules and penalties, they cannot stop the major underlying trends. Therefore, the only way to prevent such disputes in advance is through careful communication between management and employees, supervisors and subordinates, and others within the organization. Below are some practices that companies should consciously implement to improve internal communication.

  1. Respond immediately whenever employees express complaints or dissatisfaction.

  2. Conduct performance evaluations quarterly.

  3. Provide frequent feedback and check-ins with employees.

  4. Provide training to all employees.

These practices naturally increase communication with employees and help companies become more sensitive to and better understand what their employees are thinking. Relying on the HR department alone is not enough.

Providing employee training is also an important form of communication. Offering training is a way for a company to communicate with its employees by providing the entire workforce, or individual employees, with specific knowledge and skills suited to their environment and circumstances. Particularly now, when discrimination against socially disadvantaged groups is receiving increased public attention, requiring all employees to complete e-learning courses—even simple, short courses—is an effective way to communicate the company’s strong commitment to never tolerating discrimination, workplace bullying, sexual harassment, or similar behavior. When all employees, including senior management, complete the same e-learning course on discrimination prevention, it sends a powerful message from the company. At the same time, if a dispute or lawsuit arises, company-wide e-learning completion records can serve as evidence that the company made efforts to raise awareness and prevent discrimination. Maintaining training completion records is a form of insurance against future disputes.

As broader social trends continue to change, communication with employees is essential for companies to build strong relationships of trust. This should begin with reviewing company handbooks and policies. It is important not to be afraid of conversations with employees, but instead to actively provide feedback and check-ins, praise employees for their work, express appreciation, and establish relationships of trust. Companies should also provide e-learning training to all employees, including senior management, and build a record of training over the years, creating a shield for the company in the form of training completion records. Only through such efforts can companies establish stable labor-management relationships amid these major changes and achieve stable, sustained business growth.