What’s the new social contract between employees and employers

For years, the social contract between employers and employees was that the latter would work for the company in exchange for wages. Then certain other benefits, such as health insurance and provident fund were added to it.

Today’s version of the social contract between organisations and employees is one that has evolved over the last few years – partly due to the influx of new generations – Gen Y, Gen Z – at the workplace, and partly due to technology. The pandemic has brought another set of changes to this social contract, and several non-tangible elements have become part of it.

The newer generation doesn’t only work for wages or money, they need to believe in the company’s vision, mission, goal and also social responsibility. They will only choose to be associated with a company that trusts them, and has the ability to contribute to their individual career through growth and ongoing learning. Overall well-being of employees is another element added to the social contract – the rush to pay for vaccination for employees and their families among the Indian corporates is a testimony to that.

Even from an organisation’s perspective, a lot has changed. Companies are aware that their respective HR teams now need to treat their employees as internal clients, and service them round the clock.

“I will not say that the social contracts have changed but the way the companies and the employees look at each other has. With workforces being shifted to the remote structure, the expectations of employees and employers from each other have evolved.”

Rajorshi Ganguly, president and global HR Head, Alkem Laboratories

Thanks to the pandemic, again, there is lot of autonomy at work. The work is more important than the workplace. The outcome is more important than output.

Emmanuel David, director, Tata Management Training Centre, says, “Since the pandemic hit the world, employers are not concerned about where the work is being done from or at what time. All they are looking at is delivery and outcome.”

The pandemic has also led to the blending of peoples’ professional and personal lives, so the workhours have either extended, remain flexible and even stretchable. There is less of commute time, and that has translated to increase in actual work hours.

In the social contract, employees also feel the need to be rewarded and appreciated more often.

David says, “At Tata, we aim to recognise the talents that have shown extraordinarily good performance during the remote-working phase and reward them. However, this is just at a planning level and has not yet been executed.”

“There are certain companies which have drawn a line between the professional and personal life now in different ways, which has helped streamline the remote work culture. It is undeniable that some people, especially those handling the overseas are working beyond the scheduled time. But, how to recognise and reward such people completely depends on the reporting managers and the company policies imposed on them.”

Udbhav Ganjoo, head HR, Viatris

The social contract also needs to constantly evolve. On an average, surveys have found that people in the 25-35 age bracket do not prefer staying in a company for more than two to three years, if they are not compensated with the right perks. Such employees demand highly agile employers, who can make desired changes in the social contracts to retain them for a longer period.

Rajorshi Ganguly, president and global HR Head, Alkem Laboratories, says, “I will not say that the social contracts have changed but the way the companies and the employees look at each other has. With workforces being shifted to the remote structure, the expectations of employees and employers from each other have evolved. Employers do not force the employees to work for extended hours. Employees do it as per their convenience. Employers understand the mixed work-life structure of people irrespective of the position of an employee. So, employers expect only the outcome and interfere less about the time, venue, and numbers of breaks taken, and so on.”

He further says, “For instance, we all are mindful of the fact that this work structure has taken a toll on the married women with children. Therefore, we do not expect that people will be available all the time even while working from home.”

“Since the pandemic hit the world, employers are not concerned about where the work is being done from or at what time. All they are looking at is delivery and outcome.”

Emmanuel David, director, Tata Management Training Centre

Since the pandemic struck, well-being has come to mean much more than the health benefits offered by the companies. The definition of ‘well-being’ today covers both mental and physical well-being.

Udbhav Ganjoo, head of HR, Viatris, says, “During the initial days of the remote-working phase, people had difficulties in managing time. However, there are certain companies which have drawn a line between the professional and personal life now in different ways, which has helped streamline the remote work culture. It is undeniable that some people, especially those handling the overseas are working beyond the scheduled time. Such people are definitely getting noticed, and now more so because of the mixed work-life schedule. But, how to recognise and reward such people completely depends on the reporting managers and the company policies imposed on them.”

Unlike the yesteryears, work-life has entered the living room with the injection of technology. While remote working is not new, the pandemic has certainly made its perks prominent demanding a change in the social approach to the employee-employer association. There continue to be certain functions, which cannot be run remotely, but the companies are bringing about changes in whichever area possible. Technology and emotional quotient have a huge role to play in the social contract between the two sides in the post-pandemic world. Nobody ever imagined that these two will make their way into the social contract, either in written or unwritten form.