A New Social Contract for Work

An emerging feeling of fairness at work is breeding a new social contract around the remote and hybrid models, and the worker is holding the pen

It seems like the demands of the pandemic have finally pushed us over the tipping point and away from practices such as command-and-control and micromanagement. The high marks that corporate leaders earn in managing remote and hybrid environments are translating into a strong sense of fairness.

This feeling of fairness, in turn, is breeding a new social contract that alleviates many of the tensions swirling around the expectations of remote and hybrid work models going forward. It also contributes to upending the assumption that employees in such environments universally feel left out of key interactions and activities.

Flexibility & choice are key

At the same time, this new compact is in its infancy, with mindsets still shifting to accept and adapt to the new approaches. Flexibility and choice will be essential to success. However, employee sentiment on remote work compensation and benefits is apparently still aligned to in-office models, perhaps because survey respondents are themselves adjusting to the new landscape. When a MIT-SMR survey, sponsored by Cisco, asked respondents whether the opportunity to work from home should be considered a benefit or a given, a majority of respondents – 59% – said it should be a benefit, as opposed to 36% who say it should be a given.

The survey covering 1561 respondents ranging from corporate directors to C-level executives to supervisors, managers, and individual contributors, found that despite fears about the viability of remote work, organizations across industries showed significant levels of resilience, mettle, and have risen to the challenge beyond everyone’s expectations.

Organization cultures are doing better

Organizational cultures were thriving and, in some cases, doing better than they did before the pandemic per the survey. Leaders scored high marks for modelling new behaviours and making change happen. The success is breeding significant levels of confidence in management and a new social contract that features unexpected amenability around contentious issues of what the world would look like.

Assumptions about corporate culture relying on the physical proximity of employees were proved unfounded. On the contrary, the survey results showed that hybrid work improved corporate culture. A vast majority of respondents said that camaraderie, closeness to the organization, and feelings of inclusion and diversity have improved or at least stayed the same since the pandemic began. This includes those who worked remotely full-time and in offices full-time prior to the pandemic.

The Great Renegotiation & not resignation

The survey found that hybrid work was reshaping the great resignation into a great renegotiation. People want more choices about where they work as opposed to increased compensation or additional perks. Majority of respondents believe that working from home should be a benefit and not a given. Moreover, they strongly agree that compensation should be based on the cost of living where employees reside than on their roles. Only a minority believe that companies should reimburse remote and hybrid workers for expenses they incur for items such as new equipment, furniture, and better Internet connections.

Legacy contracts are being rewritten

Perhaps the biggest shift is in the finding that people can be left alone to do their work rather than being constantly supervised. Since the pandemic began the work environment has seen increasing bouts of self-direction and motivation. We are witnessing the dismantling of the old command-and-control structure and the legacy contract assumption that employers “own” their employees’ time for a given number of hours and days were fine for the industrial era, where work processes were specialized and easily controlled through a hierarchy. But in the current age, business is faster and more complex, and companies need to drive innovation and swifter decision-making. Historically, such fundamental changes take a long time to sort out, but hybrid work has actually created a conversation about a new social contract.

Putting people first

The question many are asking is how do we explain the ‘great resignation’ when things have improved so significantly? Per a McKinsey report, employers believe that it is a problem with compensation or work-life balance. But the employees who are quitting tell a different story. Their main reasons for quitting are: (a) not feeling valued and (b) not feeling a sense of belonging. And yet during the pandemic, the most productive companies actually broke this trend and improved employee job satisfaction by 48%. These are the companies that put people first. People can accomplish more together than anyone could alone. In an ideal world, the more people give, the more they get. A win for one is a win for all. Achievement is a positive-sum game. In this state, people feel like they’re part of something bigger than themselves.

The worker is holding the pen

LinkedIn listed dignity of work, fairness, and transparency as a top priority for current job applications; they weren’t looking for higher pay and perks. Employees sought flexibility about where they work. Human capital experts would prefer to use the phrase Great Renegotiation where both parties are willing to scrap the traditional arrangements of work. It is as if a social contract of work is being rewritten and, right now, the worker is holding the pen.

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