The 1990’s were characterised by much change. Political, Social, Environmental and Business. On a business front the most significant was possibly the destruction of the employee/employer contract. An understanding that had served both parties well for many years, was destroyed.

Until the 1990’s the advice most people received from their parents was, “Get a job in a big company, stay there, and work your way to the top.” This advice was built on an understanding that most companies offered security (in the form of long term/life time employment) in return for loyalty (you literally became the company man or woman once you stepped through the office doors).

In the 1990’s this understanding was put at risk as shareholders met with the directors of companies and asked for greater returns. In order to fulfil this new objective, a massive drive toward increased efficiency was embarked upon. Consulting companies the world over made large amounts of money preaching the new paradigm. Of course when you’re looking for efficiency gains, rationalising your people compliment is always a large win. And so it was. Retrenchment in every country, in every industry, across every level of every organisation.

The Employee/Employer Contract was torn up and set aside. A new contract was being born.

In spite of this happening in the 1990’s many companies are still struggling with the results of this event. Often foolishly so. They are still spending large amounts of time, energy and resource trying to stem the tide of the emergence of less loyalty, less passion for the brand, less alignment to the strategic goals and vision, less commitment to the strategy and action plans – in short, less pre-90’s behaviour.

When the basis of your engagement with someone is built on a foundation of one set of variables, and then you suddenly change those variable, surely you can’t expect that the engagement is going to stay the same?

Today’s younger set grew up in the 90’s. They watched their parents, who had given their lives to a company, lose those jobs over-night. They walk into your organisation and their message is simple, “You can’t commit to me for the long term, do not expect that I will commit to you for the long term either.”

And the new contract begins to gain momentum.

Organisations will need to identify and explore the new set of variables to understand the emerging new contract. Attempting to claw back to the ‘old way’ may not be the best way to spend time and resources. We may never see that contract of engagement within a business context ever again?

As Peter Cappelli, in The New Deal at Work suggests,

“While employers have quite clearly broken the old deal and its long term commitments, they do not control the new deal……… its hard to see what could make employees give that control and responsibility back to the employer”

The emerging new contract is, in my opinion, going to be centred around the full experience of both the organisation and the worker. Essentially, each one of them offering up full engagement and commitment to each other, during the time period each individual contract is in place.

Long-term loyalty will mostly be a thing of the past. Even if an employee spends a large chunk of time within an organisation, they will be working to shorter contract periods around stimulating projects, and not simply committed to the brand, vision, values, etc of the organisation ad infinitum.

Return on investment/energy will be a measure both parties use to assess how effective the relationship is, and whether it needs to be pursued or terminated?

We will see the emergence in far greater numbers of talent/labour agents and not recruitment specialists as we have now.

Perhaps Jim Jannard of Oakley understands this when he says,

“I want our people when they walk in to be so stoked they can hardly stand it. I want them to be dying to come back tomorrow. I want them to be desperate to find a place where they can use their own particular talents to add to us and make us great.”

There is no doubt that a new contract is being written as you read this. It will take courage and commitment to leave the old ways behind and venture into this new world to try and test a new way of engagement between organisation and worker.

TomorrowToday Global