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The employee proposition — we need a new deal

The meaning of job security has changed. Whilst it might have once meant a steady role in stable organisation, it’s now about maintaining relevant skills and having a mindset to continually adapt to the changing world.

Discussing corporations in a very un-corporate setting

In one of the gardens of London Business School, I sat in deck chairs with Tammy Erickson. As well as an incredible background in business, consulting, coaching and innovation, Tammy is a now a lecturer at LBS and the Programme Director for Organisational Behaviour and ‘Leading Businesses into the Future’.

Tammy shared a wonderful perspective on a deal that was set between the employer and employee in the 1950s. A good deal at the time, but a deal that now needs to be re-negotiated.

There was a pretty compelling deal in the 1950s

Post-war 1950s UK. Unemployment was almost 0%. Competition for workers was high. To attract and retain employees, organisations offered final salary pensions and other tenure based schemes. It provided financial security for life. In return, employees gave unconditional loyalty. Career development was based on a steady progress of moving through the company. It was the classic ‘career for life’.

Trust in this deal is broken

Final salary pensions are a thing of the past and other loyalty schemes aren’t what they once were. There are redundancies on huge scales as organisations responded first to globalisation, then automation and soon robotics and AI. Not to mention the disruption of startups that can turn an industry upside down over night.

However, on the surface, the expectation of the employee is still loyalty even if the employee could get a better deal elsewhere. Career development is typically still based on progression in the company, even if the employee has a very different future in mind. Trust in this equation is broken.

And then there’s the millennials

Not only are many organisations failing to restore balance in this equation, they are dealing with a new workforce that has a new set of motivations. A Gallup article on ‘what millennials want from work and life’, found 4 words to describe this new workforce: unattached, connected, unconstrained and idealistic.

In terms of motivations, they still want to be well-paid, but other things are important to them, more so than previous generations.

  • High levels of well-being
  • To be emotionally engaged with their jobs
  • To have purposeful lives

We’re a demanding bunch and given that 71% of us are disengaged in their current place of work, it suggests they’re not getting what they need. The statistic is even less encouraging in organisations of more than 1,000 employees.

It’s not just millennials, the world wants something different

We’ve all no doubt read about which jobs may or may not be needed in the future. Of the study of 702 occupations in the US, 47% were identified as being at high risk of automation (Carl Benedikt Frey and Michael Osborne). Similar studies have put this figure at 35% in the UK where there is a higher proportion of creative jobs.

AI professors and techies tend to be even more ambitions, particularly in Jerry Kaplan’s “Humans Need Not Apply”. However others believe the change will redefine and create as many jobs as it impacts. One thing is certain, the uncertainty. Predictions of the impact of previous waves of automation have been woefully inaccurate. “Imagine trying to tell someone a century ago that her great grandchildren would be cyber security specialists”, says Joel Mokyr, economic historian at Northwestern University.

Whichever side you lean, John Seely Brown makes an important point. “The half-life of learned skills used to be 30 years, now and in the future it’s 5 years”. The founder of LinkedIn, Reid Hoffman, thinks that individuals will need to increasingly learn new skills to remain relevant.

In Exponential Organisations, Ismail notes that “for any company today, having a permanent, full-time workforce is fraught with growing peril as employees fail to keep their skills up to date”.

Is it likely that someone who trains as an accountant now will still be an accountant in 20 years? Maybe, but it’s unlikely they’ll be working in the same way. The skills needed might be more about configuring complex blockchain capabilities to do the work the human used to do.

A need to re-train will also require a huge mindset shift which won’t be easy. We’re currently not told how or when to do this. This might be quite unsettling for people that more naturally favour mastery of a narrower expertise.

What does all this mean for a new deal?

To re-cap, we said the following:

  • The future world needs people to re-train and keep their skills relevant
  • Millennials don’t want constraints, long term attachment to organisations or a career for life and increasingly following a path of job hopping or maybe even having a portfolio
  • Organisations have taken away some of the carrots, but haven’t yet replaced them with a compelling alternative

So how about this for a new deal?

Employees work hard and deliver the most value and impact they can in the time they work at the organisation. In return, organisations need to equip employees with relevant skills that are not only relevant to the short-term interests of the company, but also consider the whole-life plan of the employee.
Why could this deal be a great thing for organisations?

This isn’t a new thing, some organisations have made this part of their brand. Mckinsey have a recruitment team that helps people who leave the company find the best for role them. They are proud of the fact that they are creating business leaders and problem solvers of the future based on strong foundation of skills developed at McKinsey.

One of the first things you read on the GE website is “GE works by investing in young people’s skills, training and by making a difference in their communities…to create the engineers, scientists and communities of the future.”

Propellent has some incredibly pioneering perspectives in the CEO’s blog, but the one we love the most is the ‘dream machine’. People share their dreams and where they’re trying to get to and this is factored into their development.

And what do these organisations cite as the benefits?

  1. They attract and retain the best talent with employee engagement and development methods designed for the 21st century
  2. The staff and the business maintain the most relevant skills to innovate and be resilient against industry disruption
  3. Employees are happier!
Is this really as hard as it sounds?

A lot of the leg work has already been done. Firstly, there are the MOOCs (Massive Open Online Courses) such as Coursera and edX. Read this for the top 50. They are up-to-date, relevant and engaging. How many organisations can say that about their internal training programmes?

There’s also the continuing trend towards more flexible resource arrangements. This trend is characterised by the ‘gig-economy’ and the growing ‘portfolio career’.

The gig economy supports the millennials preference of being ‘unconstrained’ and ‘unattached’ whilst also providing organisations with quick access to the right skills.

There’s a lot of opportunity to rethink skills development for the individual and the organisation. The more significant challenge is overcoming culture.

Culture eats strategy for breakfast

Imagine a conversation between an employee of the new world and a manager of the current world.

Manager: “So what are you looking to achieve this year? Still keen to get that promotion and the pay-rise?

Employee: “Actually, I have some bigger ambitions I’d love to share. I’m actually planning to only be here for a few years. I’ll work as hard as anyone else and do the best by you and our clients in that time but I’ve got other ideas. I want to retrain as data scientist and build a startup around that. In three years I hope that I’ll have saved enough money and gained new skills to make that dream a reality”.

Manager: “Errmmm, so what shall we put into your goal plan”?

Is being that open in today’s world a potential risk? Could it restrict the employee’s progression, reward or access to opportunities? In most of today’s companies, it probably would.

But imagine if the manager could respond with: “That sounds amazing. Let me hook you up with a MOOC. Use can use your training allowance to test the water with a data science course. I’ll also hook you up with a startup mentoring network. I can also see this new knowledge being really beneficial to own clients too, so let’s still push for that promotion”.

I don’t know about you, but that sounds like quite exciting environment to work in.

Other reading: We’re scratching the surface about what might need to change for organisations to create great places to work and attract talent. This is within the broader context of the Exponential Organisation (Salim Ismail), Reinventing Organisations (Frederic Laloux) and other systems like Holacracy. These go wider (hierarchies, culture, decision making, reward etc) in considering how organisations need to change in the 21st Century.

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