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The IR Guru Interview:

Our series of profiles on prominent figures in Industrial and Labor Relations

Nick Dalton, EVP HR – Business Transformation, Unilever

“The realities of the global supply chain are very stark when it comes to labour conditions and what’s regarded as ‘normal.’ ”

How did you end up on the career path you did?

I have been with Unilever for 35 years now. I was recruited on to the company’s fast track graduate scheme with my first proper role being in Hull as an employee relations manager in a Bird’s Eye Walls factory. I later became personnel manager for a bigger site covering Hull and Grimsby. That was my favourite job, it was a great place to work. 

After 15 years working in Bird’s Eye in various locations, I went off to Rotterdam to work in Unilever’s ice cream and frozen food business in Europe. My role there was to regionalise the business. Then I went to Switzerland to establish what is called the Unilever supply chain company, first on a European level than on a global level. 

In 2016, I was appointed EVP HR for Europe and the Global Markets. I became EVP HR Business Transformation in 2019, which allowed me to come back to the UK before I retire from Unilever. 

I have worked in every single function in the HR sphere including in reward, job evaluation, training, organisation design and development and more. Over time as I began to specialise in change management and industrial relations and employee relations, I realised it was the area I enjoyed the most. 

How did you get into international IR/ER?

Around 2010, we began to see a number of local industrial relations issues in countries such as India, Pakistan, Turkey and Brazil suddenly becoming internationalised. This was happening either via social media or as a result of communication from the global union organisation the IUF, which is based in Switzerland. Our initial response was to leave these situations to local management to deal with, since they were about local relationships and local issues. But, of course, the issues that came to our attention were the very ones that no one had been able to solve at local level and had become entrenched, which is why the IUF were seeking to give them more international profile. 

We had no structures to deal with this at the time and such issues were becoming very serious and threatened to damage company reputation. International trade unions were also starting to use complaints procedures using the OECD Guidelines for Multinational Enterprises and able to engage governments into the process, so disputes became more high profile.

In response to this new trend and because I had looked after European works councils and therefore had experience of cross border work, I was asked to look after global employee relations.

It was very much the one-eyed man in the kingdom of the blind. I thought I knew a lot about IR and ER at that point but I learned more in the first two years I was responsible for international IR than I had in the previous 20 years. It was a huge learning curve. Some of the issues were intractable and complicated, some were even political. In some cases, I had to accept I would just have to find a way to resolve the problem without really fully understanding the underlying issues.

The job also gave me some very different experiences, I was travelling to some very remote out of the way places. During one four-day trip to Assam, India I had to have an armed guard with me the whole time, it was so dangerous.

What were the main challenges you faced in the international arena?

Typically, international issues revolve around three fundamental issues. The first is temporary labour. It is used as a way to keep wages low in factories and it’s the most common form of employment in most parts of the world. The realities of our global supply chain are very stark when it comes to labour conditions and what’s regarded as ‘normal.’ Although the IUF campaigned against Unilever’s use of temporary labour, from our perspective we thought it perfectly legal. The reality was though that in a number of our factories, legal or not, we did not really like what we saw. So, we addressed it and have largely eradicated it – although I wouldn’t say completely eradicated it, it’s too complicated an issue for that. Global supply chains are complex and need constant vigilance if you are serious about addressing rights issues. 

The challenge we face on this as a business is trying to remain competitive and continuing to grow while also ensuring our own codes of conduct on labour rights are adhered to. After all, being a more costly business so our products are more expensive isn’t going to benefit anyone. The solution is to work with organisations such as the IUF. Businesses that are serious about addressing human and labour rights need to seek out as much information as they can, address the problems systematically, and partner with people who can help them – not treat them as mere risk management issues and assume trade unions are just causing problems.

Another IR issue that tends to be common globally is union recognition, particularly in the US and South East Asia. Health and safety is also very big. It can be tricky to work around this because there are different requirements in different parts of the world and varying levels of what is and isn’t considered acceptable. 

IR issues may ultimately manifest themselves in other ways but they tend to boil down to these three themes.

On a separate point, I also learned that time is not your friend when it comes to international employee relations. The situation won’t benefit from benign neglect, it will just get worse. At first, when confronted with a problem I’d just think, give it a month, see what happens, it might go away.  It didn’t. That’s a strategy that can be used on the domestic front because you are closer to the issues but it doesn’t work internationally, when attempts to find a solution will have already failed. 

How have the skills required to manage people in an HR or IR/ER context changed? 

When I first started this job, IR was about strikes, lockouts, work to rules and overtime bans. Now it’s about campaigns and targeting brands using social media.  It takes it all to a very different sphere and a new set of skills are needed. 

The book I have recently published, The HR (R)Evolution: Change the Workplace, Change the World, covers this. It talks about the past, present and future of HR, which very much ties in with past, present and future of IR.

The book addresses the different eras of the changing world of work in the UK.  I’ll give you a quick summary: 

At the end of the 19th century, we saw the age of paternalism. This was when the model village Port Sunlight was built by the founder of Unilever, William Lever, to house the workers, for example. Paternalism was the IR of its day, it was about welfare and looking after people. 

Just before World War One, we went into the age of power. Paternalism was no longer affordable because of boom and bust. As a result, terms and conditions were cut, trade unions grew, we saw the 1926 General Strike and industrial disputes. Whoever had the most power in that era won, whether that was the employer or trade union. That’s when classic IR was born and welfare officers became labour relations (a predecessor to HR).

That era ended at the close of World War Two and we entered the age of process.  We all started to abide by rules. Instead of there being wildcat strikes, trade unions and management had procedural agreements in place about how to manage conflict – governments legislated about how IR would work. Labour relations officers became personnel managers (the job title I had when I started work).

The late 80s was the era of profit. The collective was replaced by the individual and managers were urged to become transformational leaders (think Jack Welch of GE). Shareholder value became king and IR saw a subtle shift to employee relations, where businesses were speaking more directly to their workers.  

The era of people and purpose emerged in the late 2000s. Most companies started to have a purpose, diversity became a strategic objective, wellbeing climbed up the agenda and collectivism saw a return. This era demanded we make changes with people not to people. It required involving employee representatives earlier on in the process for managing change, more co-invention and co-creation. 

However, the world has moved on even further since then: we are now in the era of paradox, which has been accelerated by Covid. It’s a world where we have to really face in to managing change in a way that gets rid of the negative externalities. By that I mean no longer looking to make gains (or optimise) only for ourselves. A good example is managing restructuring and job loss without considering the impact on wider society. 

These issues have been pushed to the fore by Covid, which has highlighted that if we go on doing our own thing, it’s not going to end well for society. 

At Unilever, we are looking into how we work with employee reps and even other companies to find completely new ways of managing change. A different kind of dialogue is taking place. So, let’s not pretend we can give people jobs for life or protect jobs in the era of automation. Instead, let’s work together to create new jobs and help people protect their livelihoods by improving employability and providing opportunities for upskilling. I think organisations will end up operating like networks, even sharing employees – and this is being explored at Unilever.

This new way of working could lead to a different form of employment and industrial relations, it’s very exciting. It’s something multiple companies need to come together to work on, as well as trade unions. 

For that to happen though, we need to develop leaders on both sides of industry – trade unions and businesses – who can genuinely work through others, build relationships, and who can let go of ego and hierarchy. These are different skills and alien to leaders trained in the era of process or profit. It’s an important shift, we risk regressing back to the power era if we don’t nurture this new kind of leadership, which won’t be good for society.

What does your current role entail?

It’s my last year at Unilever and I was given the gift of being able to start to implement some of the ideas from my book. My role encompasses working on a project called Framework for Future of Work, which is about changing the way we change. Linked in to what I already explained about how work is evolving, we are looking at new ways to respond to that. We are experimenting with different forms of employment contract (in the UK and 10 other countries at first) to solve the problem of temporary or agile work being so insecure. For example, we have a new form of contract where people can work for us as our employee but also for other companies.

We are also seeking to find systemic solutions to securing livelihoods, exploring how we go about creating jobs rather than just offering old-fashioned outplacement, and ensuring everybody in the company has an employability plan. 

In addition, we are reframing the annual appraisal into a Future Fit plan. This relates to having that grown up conversation with our people about the changing world of work. We want employees to be ready for that, rather than pretending it’s not going to happen.

Now that Covid is here we wish we had started this agenda years ago.

Why do you think HR/IR/ER practice is such an important part of the way an organisation is run?

I believe the reason we go to work is to realise our purpose and potential in life. I believe my purpose in life is to bring creativity from conflict. There’s something very compelling in seeing the people management function as something that is purposeful and vocational. Our goal in HR is to help people flourish in the workplace.

What are the current key trends is in IR/ER in the domestic and international scene? 

The collective side of the workplace is going to get bigger. The challenge for the trade union movement will be whether that happens through their movement or via some other collective route. If I was a trade union leader I would try and replicate an ‘Uber’ style model, setting up a platform to look after the interests of workers.  There would be only one number for people to ring if they wanted to join a trade union rather than them having to choose between multiple trade unions. 

Just as businesses are having to change and evolve in their approach so too do unions. I fear many unions, both domestic and international, are still locked in the power and process mindset and therefore struggle with the people and purpose and paradox mindset. Having said that, I have met some trade union leaders easily able to cope with the changes we are seeing. They can see this change as a big opportunity.

Interview by Rima Evans 

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