The New Employment Contract

As challenges with employee engagement continue across companies in every industry, a lot of people are looking for ways to increase employee’s interest and commitment to their work. The research has routinely shown that engaged workers increase productivity (and therefore revenues) and decrease costs by reducing turnover. So, most leaders are seeking creative solutions to achieve the formula that will increase engagement.

I’m not going to propose that I have all the answers. But after working with hundreds of teams, I firmly believe that the workforce has evolved to a new set of standards. The employee base has fundamentally shifted its expectations and desires, and when these expectations go un-met, we see negative trends in employee engagement. When we think about engagement, we need to think about the very foundations of work.

The Employment Contract May No Longer Work

When I first started in HR over 20 years ago, there was a very fixed employment contract in place that everyone seemed to agree on. Business leaders would define the scope of work that they need completed. When they find a person who meets those standards, they extend an offer of employment. In return for doing the work that’s been described and following the company’s rule book, the new individual receives compensation and the benefits of being an employee.  The employee does the work, and the employer provides the rewards. For a long time, this seemed to work. As employees gained new skills and desired more challenges, then either the employer could find a position with higher responsibility to keep this person with the company, or the employee could leave and find a new employment contract with a new employer.

While this basic employment contract might still make sense to many business leaders, the contract is no longer working for employees. There are now expectations on both sides of the contract that need to be met in order for a company to have an engaged workforce.

Reasonable Terms for the Employer:

  • Qualifications – Meet the minimum qualifications of the job. The standard set of qualifications has been debated in recent years because many businesses develop a set of qualifications that many (or most) candidates will never be able to meet. But there is a basic set of qualifications for most jobs that an employer can set that are required to successfully accomplish the work that needs to be done.
  • Productively Accomplish Work – It is a basic expectation that the employee will complete the identified set of responsibilities within the employment laws set forth by state and federal standards. Recently, there has been a lot of discussion about what is meant by “productivity” – due to shifts in how most employees define their workday. This puts the responsibility on the employer to ensure that all employees understand what tasks they are responsible for in any given week and understand what “success” looks like.
  • Follow the Rules – While most employers care about their employee’s success and achieving profitability, it is also critical to manage risk. Therefore, the employer writes an employee handbook and trains everyone on how to follow the rules. It is a reasonable expectation that the employees follow the rules, as people are expected to follow the rules in all aspects of life. This ensures that the business can focus on results rather than being distracted by bad behavior.

Reasonable Terms for the Employee:

  • Competitive Total Compensation – With the cost of living increasing significantly in many parts of the country, and the impact of remote employment causing employers to look more granularly at competitive pay by geographic region, it is becoming increasingly difficult to maintain competitive employment. It is more important than ever to employees to feel like they are fairly compensated and that the value of their work is recognized through competitive pay. Employers need to understand this expectation and ensure that employees feel that equal and competitive pay is important to the company.
  • Professional Growth – For many of us, our profession and our professional accomplishments have become a significant element of our identity. Because we are so focused on our professional trajectory, employees have an increased expectation that the company will invest in their growth. It is more standard now that employers will partner with the employee to ensure that they understand the goals of the employee and try to align those with the goals of the company so that both parties get what they “want”.
  • Purpose & Belonging – As an employee, I want to feel that my work matters and that I matter. Because we spend so much time at our workplace, employees have increased expectations that the time they spend working will further their sense of purpose in the world. And they want to feel “seen” in the workplace. Companies that spend time genuinely tapping into employees purpose and investing in inclusivity programs are the ones with the highest levels of engagement.

Without understanding the needs of a changed workforce, we will continue to see the majority of workers feeling disengaged. Genuinely addressing the needs of employees is one way to think about shifting the engagement paradigm.