> If I were a company I would be terrified that such inefficiencies are protected by a union.
You can't 'be' a company. You can run one, at best.
And if unionized employees terrify you in a country where unionization is legal then maybe simply do not start a company?
> can someone more knowledgeable in this area explain how a unionized workforce benefits both employees and the business hiring them
In theory - not always in practice - unions create a more level playing field in the asymmetrical relationship between employer and employee, it restores some of the balance of power. Collective bargaining means that employers can no longer reduce negotiations by serially negotiating with one employee at the time, but have the negotiate with all employees at once. This has had a remarkable effect on the division of the value created by those employees over the years that we have had unions.
Now, in practice, of course not everything is quite that simple and unions can be co-opted by the company, and there are plenty of examples of unions that ended up being self serving power structures in their own right but we - collectively, the voters - still believe in most countries that unions are such a big net effect that retaliation against employees for wanting to unionize is illegal under the law.