New World of Work Employment Contracts Could Have Far-Reaching Consequences 

One of the largest ever experiments with work took place during the Covid pandemic – namely, that most office workers started working from home. Many are still working from home today, or they have agreed on a flexible ‘hybrid’ work style that allows them to mix time in the office with time at home.

But although this has been the most visible change to the way people work, there has been a more subtle shift in the psychological contract between employers and employees.

Work itself has changed. Many workers that were always paid by the hour found that they could change their contract to reflect delivery or output – not time. Many found that they wanted to have complete control over their working hours and working location.

GitHub is a good example. It’s a service that allows software coders to store the code they are working on – so they can go back to earlier versions or keep track of what is changing when multiple people are working together. The company was always focused on working from home, but when they started out the founders designed the company as a completely flat structure – everyone at every level was a manager with the autonomy to choose what they work on.

Eventually some middle-management was introduced, but this was not because projects were out of control. It was in response to harassment allegations directed at the senior management team. Junior employees needed some rules to protect them from the founders. Fairly soon after this time, Microsoft acquired the company.

GitHub shows that there needs to be a balance. Nobody wants to work in an environment where you have no agency at all, where management decides what you are doing, when, and how long you can take as a break. Complete freedom to choose what you want to work on sounds like a utopia compared to this.

But not everyone is suited to work in a completely free environment. We have all had colleagues that coast along, doing as little as possible without getting fired. These people often work in teams where other people put in far more effort than their job description calls for.

There was a period immediately after the pandemic that academics now call The Great Resignation. It is actually an ongoing trend, but the effect was most noticeable in 2021 and early 2022. The name describes what has been happening, many more people than usual are leaving their jobs. The monthly average number of resignations in the US at present is about 4 million a month – a decade ago it was half that.

Many commentators now attribute this to the changing psychological contract. An employer expects a hard-working and reliable employee. An employee expects fair wages and working hours. However, these basic expectations are being revised. More and more workers are expecting autonomy over their working location, working hours, and they expect their employer to be helping them to develop their career.

They also want to work for employers that are making a positive difference to their local community or the environment. Executives publishing Environmental, Social, and corporate Governance targets are often doing it to be seen as a more attractive employer, not just for the good of taking these actions.

The employee expectation that working from home should continue was only the beginning of this change. They now have many more expectations.

The ultimate vision for some will be the gig economy. Highly skilled people can sell their services to multiple clients, rather than giving all their time to a single employer. This even works in the customer service environment, where analysts have been exploring GigCX for a few years now.

But while the gig economy may be attractive to some, it will not be attractive to others. Not everyone wants to be completely freelance and dependent on gigs that may or may not arrive. It offers a vision of complete freedom, but also a complete lack of income if there is a quiet month.

What could well become increasingly common is something that Sensée has been working towards for several years: employees with employment contracts, salary and benefits, and the confidence of knowing what they will be paid each month, but with the flexibility to work from home and choose their working hours. Indeed our childrens’ kids generation may laugh at the very notion of people commuting to the same office everyday using the same train or stuck in the same traffic jam.

This flexibility also allows us to start re-thinking how urban populations are formed. Major cities created suburbs almost entirely because the railways arrived and offered the opportunity to live away from the workplace. Most of us don’t even think about cities as being designed for commuters.

If the expectations on commuting and working hours change dramatically then maybe people will be happier living in smaller communities, where previously it was difficult to find employment opportunities.

A wave of change is coming. This reset in employee expectations will lead to many changes in how companies – and cities – function in the near future.

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