A vital part of the negotiating process is understanding how a contract will affect your company’s bottom line. Here are 9 tips to remember when costing your CBA:
- Start early - it takes time to build a strong costing model
- Engage with experts and stakeholders within the company to understand the financial goals and limitations
- Request and collect data necessary to build the model; keep a good record of the source of all data collected
- Have a full understanding of the CBA and how any change will affect costs
- Remember that one change can have a domino effect on one or more other areas of the CBA
- Carefully develop the assumptions and be able to explain and defend them
- Build the model to be as flexible as possible in order to add or modify proposals as negotiations progress
- Determine if the model will be shared with the union counterpart; even if the model itself is not shared, be open and transparent in discussing assumptions and methodology used in building the model
- Test the model extensively before putting it into practice