Lessons from the Hollywood strike: 3 valuable takeaways for HR

Hollywood’s latest drama – a simultaneous strike by screenwriters and actors – hasn’t been seen since 1960, before most of today’s workforce was even born.

As you’ve probably heard, the Writers Guild of America (WGA) went on strike in early May, and the Screen Actors Guild-American Federation of Television and Radio Artists (more commonly known as SAG-AFTRA) joined the picket line in mid-July, effectively shutting down Tinseltown.

The situation in Hollywood provides key lessons for HR — even if you aren’t working in an industry prone to labor strikes.  

1. Demands for more pay

Setting the scene: The issue in the Hollywood strike

Writers and actors want increased pay and specifically more “residual” pay for content replayed on streaming platforms. Is that realistic? And do their paychecks stretch as far as you think?

The average pay in 2022 for an actor in California was $27.73 per hour, according to the Bureau of Labor Statistics (BLS). Writers and authors, grouped together by BLS, did a bit better. Those working in California earned an average of $62.18 per hour in 2022. For context, let’s not forget that Hollywood is home to a billion-dollar industry. According to Forbes, the film industry made a record-breaking $100 billion in 2020.

The bigger picture: Back in the real world

Obviously, the growing demand for better pay isn’t limited to Hollywood Blvd. Economic realities like ongoing inflation and wage stagnation have undoubtedly contributed to the push for higher wages across nearly all industries in the U.S.

On top of worker demands, evolving legislation – such as pay transparency laws and salary history bans – at state and local levels have also prompted companies to examine pay practices.

The real question is, when it comes to pay, how much is enough?

Recent research from ADP shows just how far apart employees and employers are on compensation.

In People at Work 2023: A Global Workforce View, ADP researchers found 10% of workers expect a salary increase of more than 15% in the next year. But here’s a reality check: A look at pay increases from the previous 12 months “paints a different picture,” researchers noted. How different? Only 3% of worldwide workers actually received such a large pay increase during that timeframe.

Zoom in: What HR can do

In light of the gap regarding pay expectations, HR can take the following steps to prepare for potentially challenging conversations – before getting caught off guard:

• Conduct an internal audit of pay practices and take incremental steps to bump pay as needed. Doing so can help manage employee expectations while showing that HR is committed to an equitable workplace.
• Brainstorm valuable alternatives to keep A-players happy until pay increases can be approved. Of course, money is important, but it isn’t the only thing employees value. It’s a good idea to have a few out-of-the-box options up your sleeve to offer top talent in lieu of pay increases that don’t currently fit into the budget.
• Prepare for unexpected requests – before underperforming employees ask for pay increases. Have a plan in place to communicate exactly what needs to happen before you’ll consider having a serious talk about money.

2. Major AI concerns

The scene in Hollywood

Both the WGA and SAG-AFTRA have asked for protections involving the use of artificial intelligence (AI).

Specifically, the WGA seeks regulation of AI to protect its members’ job security. And likewise, SAG-AFTRA has expressed concern about how AI is being used in the industry and is examining how it can help members protect their digital likenesses, voices and performances.

The bigger picture: Back in the real world

The AI-related concerns mentioned by WGA and SAG-AFTRA mirror the unease felt by many employees across the U.S., especially those working in creative and specialized-knowledge fields.

The majority of employees want to know how AI will affect them – and their job security. That’s a reasonable response to a rapidly improving technology that is changing many industries.  

Even HR pros have pondered what AI means for their future.

The big question – Can AI replace HR pros? – has already been tested. In a recent study, Mineral researchers asked ChatGPT essential HR questions and got mixed results: AI handled some of the simple stuff, but it botched more complex HR tasks.

Zoom in: What HR can do

First, AI should be handled like any other factor that has the potential to change your industry — address the challenge head-on.

AI-related fears about being replaced are real – and company leaders need to talk about it with employees. Here’s how HR can take a seat at the table and help lead the company through the transition to AI in the workplace:

• Create comprehensive AI use policies that cover compliance, data management, ethical use and security.
• View AI as a tool for the company and its employees. Help employees pivot from fear to an innovative mindset. Prepare employees for AI integration by including them in conversations about the new ways AI can potentially help them achieve goals.
• Provide cutting-edge training that teaches employees how to effectively use (and fact-check) generative AI. For example, employees need training to spot AI errors known as “hallucinations,” such as non-existent data, fabricated quote attributions and nonsensical ties between unrelated ideas.

3. The cost of shutdowns (and slowdowns)

The scene in Hollywood

In business, when production comes to a halt, companies lose money. The film industry is not immune to that reality. The weekly cost of the 2023 Hollywood strike could top $150 million, Forbes estimates.

We’ll have to wait and see how this cliffhanger pans out.

The bigger picture: Back in the real world

Even strikes outside of Hollywood end up costing a pretty penny. For example, the looming UPS strike may end up costing the U.S. economy more than $7 billion, according to a study by the consulting firm Anderson Economic Group.

But what if you’re not in an industry prone to labor strikes? You can still probably relate to losses based on dips in productivity. Case in point:

Whether it’s productivity paranoia or not, many in the C-suite believe remote work has hurt productivity and are demanding employees return to the office. Not surprisingly, the move is not going over well with employees.

That’s a potential problem because the knee-jerk reaction — ordering staff back to the office in hopes of revving up productivity — may cause even bigger slowdowns in the form of employee disengagement, or worse, turnover.

Recent research from Gallup found employee disengagement comes with a steep price tag. In State of the Global Workplace: 2023 Report, Gallup estimates low employee engagement costs the global economy $8.8 trillion.

If you’re like many HR pros, you might be wondering: But what about The Big Stay? Wasn’t that supposed to signal an end to the widespread job-hopping that caused turnover headaches?

It’s true that the overall situation has improved. The ADP’s research confirmed that both job postings and turnover are down. That’s promising news, suggesting more employees will be sticking around.

However, your star employees will always have options to move on, even in markets with fewer job openings. It’s more cost-effective to retain top talent than trying to replace them. (If you missed it, here’s a helpful guide to calculate your employee retention rate.)

Zoom in: What HR can do

The first step to preventing a strike (or turnover) is keeping employees engaged and happy in their roles. The need for employee engagement ideas never ends — and again, it’s not always about money.

Lensa, an online job search platform, recently analyzed Google search data to find out exactly what workers want — providing valuable insight that can help boost employee engagement and retention. Desired perks included:

• Four-day workweeks
• Corporate social responsibility, and
• Professional development opportunities.

Facing a strike: Do’s and don’ts from an attorney

Hopefully, you never have to handle a labor strike such as the one currently playing in La La Land.

But if your employees do decide to walk off the job, what should you do?

Call your labor lawyer immediately, says employment law attorney Jon Hyman. That’s a crucial first step because there are two classes of legal strikes:

1. Economic strikes in response to complaints about wages, hours or better work conditions, and
2. Unfair labor practice strikes in protest of an employer’s alleged unfair labor practices.

The law differentiates between the two in how you can respond, Hyman explains. You need to know what you can and cannot legally do to avoid making an already bad situation even worse.

Here are several do’s and don’ts, courtesy of Hyman, to be aware of in the event of a labor strike: 

• DON’T retaliate against striking workers. 
• DO hold striking employees accountable for their own serious misconduct such as threats, violence, or vandalism. 
• DON’T make promises to entice employees to abandon their jobs and return to work.
• DO prohibit your managers and supervisors from joining their subordinates on the picket line. The NLRA does not protect managers and supervisors; you can lawfully prohibit them from walking off the job in solidarity and discipline them if they do.
• DO stop paying striking employees. They’re not working so why pay them?
• DON’T replace employees out on an unfair labor practice strike. That’s an unfair labor practice in and of itself.
• DO consider permanently replacing employees out on an economic strike.
• DO seek a restraining order in court to limit violence, threats, vandalism, and disruptive picketing, if necessary.