Of all the relics of corporate life—smoking in the office, typing pools, guaranteed pensions—perhaps the most antiquated is the notion of lifetime employment.
In fact, say LinkedIn co-founder Reid Hoffman and entrepreneurs Ben Casnocha and Chris Yeh in a June 2013 article for Harvard Business Review, the notion of lifetime loyalty to a company is not only unrealistic; it’s downright corrosive.
“Lifelong employment and loyalty are simply not part of today’s world,” they write, so “pretending that they are decreases trust by forcing both sides to lie.”
Instead, the authors suggest, it’s time for “a new employer-employee compact” that’s realistic without being Darwinian. “The new compact acknowledges the probable impermanence of the relationship yet seeks to build trust and investment anyway,” the authors explain. “Instead of entering into strict bonds of loyalty, both sides seek the mutual benefits of alliance.” They quote Netflix CEO Reed Hastings: “We’re a team, not a family.”
One good way to make this work in practice is to take what the authors call a “tour-of-duty approach,” meaning employees get hired with the understanding that they’ll probably move on after a preset amount of time, such as two or four years. The fundamental deal: “The company gets an engaged employee who’s striving to produce tangible achievements for the firm and who can be an important advocate and resource at the end of his tour or tours,” the authors say. “The employee may not get lifetime employment, but he takes a significant step toward lifetime employability.”
Peter Drucker, who witnessed the rise and fall of the Organization Man, would likely have seen a lot of merit to such an arrangement. “Lifetime employment,” he wrote, “does not fit the reality of a knowledge society.”
Indeed, Drucker observed many cases of either workers feeling betrayed by companies or companies feeling betrayed by workers. In reality, he said, lifelong loyalty was no longer possible for either side, but that didn’t need to be a bad thing. “The essence of a knowledge society is mobility in terms of where one lives, mobility in terms of what one does, mobility in terms of one’s affiliation,” he wrote in Managing in a Time of Great Change.
And he would have noted that organizations simply cannot do what families do. As we’ve discussed, Drucker called society, community and family “conserving” institutions, in contrast to the modern organization, which must be an innovative “destabilizer.”
What brings an organization’s people together is not affection but a focus on a common task. It is a team, if you will, not a family. And to hold onto the team players, Drucker wrote, “organizations have to market membership as much as they market products and services” and “attract people, hold people, recognize and reward people, motivate people and serve and satisfy people.”
Even if it’s just for a couple of years.
What do you think the employer-employee compact should look like today?