The Changing World of Employment

“May you live in interesting times” goes the Chinese blessing/curse. We certainly do live in those times and there are few things more impactful and more interesting than the changing nature of the employment contract between employees and their employers. That contract has been evolving for decades – moving from a paternalistic, stable labor system to a dynamic, entrepreneurial employment network.

In the past, an employee was able to join an organization, safe in the company’s promise that they would be employed as long as they came to work and did what they were told. That model has changed over time to become a new system where contracts between employees and employers are more dynamic, more temporal, and more transparent. The changes can best be defined across four dimensions: Tenure, Loyalty, Trust, and Most Effective Player Profile. The following chart outlines the major differences between the traditional employment contract and the emerging model:

 The changes in these dimensions outline the significant shifts in the employment contract that we all face in the coming years.

Tenure. The age of lifetime employment is over. The last glowing embers were crushed out by the latest economic downturn. No longer can companies offer the promise of lifetime employment; nor can employees expect their careers to be made up of one year of experience repeated multiple times. New tenures are much shorter and much more flexible. Employment lasts as long as the employee and company are exchanging and creating real value from the relationship. When the value ends, so does the engagement.

Loyalty. In the past, loyalty was entwined with tenure. Companies promised a job, employees traded their freedom for security, and that created a definition of loyalty based on this long-term, stable trade. Loyalty was an assumed part of the employee-company transaction and took on the inert form you would expect as the result of an unchanging relationship. The new loyalty behaves independently of any job tenure. It usually is connected to a person, a project, or a cause. It changes over time, and burns much more intensely than a loyalty based on a contract. This loyalty unleashes a higher level of energy and commitment, but requires much more care and attention.

Trust. An unchanging part of this changing dynamic is that a solid layer of trust underlies the strongest relationships and helps the best organizations operate quickly and effectively. In a paternalistic system, trust can be given much more readily because of realtionships’ stability (created by longer tenures), and clear rules for behavior and response. Today, dynamic conditions make trust an earned quality, based on expectations and actions over time. We learn whom to trust under what conditions, and others learn when and where they can trust us.

Most Effective Player. The man in the gray flannel suit was the icon of the perfect employee in the 1960s. He was an integral and interchangeable part of the company: One of the gears in a large machine. His role was defined and he was expected to play the role according to the script. Today, the emerging profile of the most effective player is much more entrepreneurial than her predecessor. Customers demand more than ever before and expect organizations to react quickly and effectively. Employees today are much more likely to be players in an improvisational theater. Themes and directions are set; but specific paths are not clearly defined and they change frequently. The most effective players deal quickly and flexibly with change and ambiguity; making the mesh between company and market tight, flexible, and effective.

The new employment contract offers more opportunity than ever before. The balance of power between employers and individual employees has never been more even. Technology makes possibilities transparent, allowing employees the opportunity to move from opportunity to opportunity and companies to communicate clearly, quickly, and effectively. The relationships built on this new transparency and authenticity are more honest, balanced, and satisfying.

This blog is set to explore the changing nature of the relationship between employers and employees. We welcome your opinions and guest posts from those with insightful viewpoints!