The social contract between employee and employer is not a new concept. Like any contract, it is about reciprocity and expectations. The baby boomer generation’s basic contract mostly stayed the same over the past decades, and three things happened. One was the entrance of millennials into the workforce, many burdened with college debt and a perspective shaped by events such as the 2008 financial collapse, which changed the job market and delayed their ability to do what prior generations had done, i.e., start a career, buy a house, and have a family. Another event leading to the transformation of the social contract is the pandemic, which changed the work model and other social factors, and reinforced the millennials’ push for work-life balance, family health benefits, more paid time off for personal reasons like caregiving, and mental health benefits. Now Gen Z is in the workforce, and they have even stronger expectations about diversity and inclusion as an embedded value, work flexibility, and the importance of belonging.
A third influence on the social contract is technology, which has impacted how and where work gets done and how people communicate and network. In the past, the social contract was mainly about job security, a steady salary, and some benefits. Today, employees are looking for more than just a paycheck. They want to work for companies that value flexibility, work-life balance, and opportunities for growth. They also want to work for employers who support a diverse workforce, understand the importance of inclusion and belonging, and are committed to social justice and environmental sustainability. Employers must adapt to the changed employee expectations, creating new challenges in attracting and retaining talent.
EMPLOYEES DRIVING THE SOCIAL CONTRACT NEGOTIATIONS
The factors just mentioned that are transforming employee expectations are just some of the most obvious. There are others driving organizational changes in the talent system. The Great Resignation (now ending but a wakeup call for employers), quiet quitting, and now loud quitting (complaining about an employer on social media) plus shifts in the labor market, employee demands for having a voice in decision-making, and the need for leaders to manage with empathy have influenced the social contract also. Employees are also more aware of inequities in pay structures, career opportunities, safety standards, and training opportunities.
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