Discover more from Work In Progress
Rethinking The Employer-Employee Deal
Why it's time to reevaluate the employer-employee relationship
Hello, and welcome to this week’s newsletter. Thank you to our new subscribers. If you’re new, drop me a line and tell me what you are working on these days
This Week’s Newsletter:
Re-Thinking The Employer-Employee Deal
People To Follow
What I’m Following
1.Re-Thinking The Employer-Employee Deal
As we move into the Future of Work, something that I’ve been thinking about is how we need to reevaluate the employer-employee deal if companies and leaders want to attract, retain, and develop talent within their organization.
In my post from earlier this year, I talked about this as the need for companies to redefine the employee value proposition. And an extension of that is the importance of rethinking the employer-employee deal.
We’ve come on a long journey with our conversation on the employee value proposition, and it’s time to move to the next stage. Having an employer brand is now table stakes, but what companies are learning is that A) simply having a glassdoor page isn’t enough and B) Having an employer brand isn’t a one shot deal.
Talk to any product marketer or brand manager and they will tell you that developing a brand is not a one shot deal, they continuously need to renew a belief with the customer that the product or service is solving a problem the customer wants solved and is delivering value in exchange for what the customer paid. This is the shift that companies will need to make this year - Your Employer Value proposition isn’t just something you do once, but rather, is a framework for how your employee is continuously reminded that they want to come to work for you each and every day.
As Drucker said, the purpose of a business is to create and keep a customer. Employees are a critical enabler of that. If we want to keep the engine going that fuels the business, we need to make sure we have the mechanisms in place to do that, hence re-thinking the employee deal.
The Limitations with Our Current Employee-Employer Deal
Over the past 5 or 6 decades since knowledge worker was initially coined by Peter Drucker, the world of work has changed significantly. However, the employee-employee contract has remained relatively the same.
Case in point: there is at least 1 generation (maybe more) in the workplace for which the words “pension plan” mean absolutely nothing.
Since job security is no longer guaranteed, and new industries and opportunities are popping up faster than ever before, companies that want to keep workers are going to need to re-evaluate and position the deal they are providing to employees in exchange for working at their organization.
Sure, fundamentally, companies and workers exchange labor in return for compensation. And having good compensation is important but mostly a hygiene factor. But many of our employee deals are aligned to benefits and promises that are fit for a world of work that no longer exists.
Forward thinking companies are employing newer tactics, like education benefits, parental leave benefits, fertility benefits, etc. Those are critical steps and elements at the margins, and certainly specific components of a deal, but a more wholesale and strategic approach is needed by most organizations.
But still, today, many job benefits that employers provide employees are essentially based on tenure. The longer you stay with the company, the more vacation, 401K match, health insurance etc you have. This is not to say a new employee contract shouldn’t include these things, but it shows just how we’re still using an “old map in a new world” and how unless we refresh our mindset and thinking we’re going to struggle with attracting and retaining talent unless we decide to update our thinking around these kinds of topics.
The Alliance: A New Model For an Employer-Employee Deal
In 2014, Reid Hoffman, Ben Casnocha, and Chris Yeh wrote the book The Alliance, as a means to articulate a new way of talent development that was making its ways through the high-growth tech startup scene. The Alliance Stems from the notion that the old model of how companies operated (like a family) was no longer working. They instead offered to encourage something called an Alliance, and through a “Tour of Duty” outlined a loose commitment and agreement between the manager and employee around goals, desires, and expectations.
Hoffman shares there are 3 main types of alliances (transformational, rotational, or foundational) but they all stem back to this idea that instead of managers and employees doing this song and dance about what each of them want and being coy to look out for their best interests, let’s put the cards on the table and see how we can help each other for the duration of time that this alliance exists.
Hoffman put together this model for a few reasons. First, in high-growth startups, it's very common for people to move onto new roles at least every 12-18 months as the startup grows.
Second, it's useless to pretend that employees are going to work for the same manager and same company for their lifetime, and easier to just acknowledge the reality of today: people switch jobs, and that’s ok.
Finally, by having managers and employees align on a tour of duty when they start a relationship on a level of mutual trust and respect - Managers do not have an obligation to support all of an employee's goals, but they do need to at least respect them and figure out what they can support for that period of time.
Furthermore, it also accounts for the idea of a personal brand - if you have a good tour of duty with a company and manager, you are incented to want to work with them in the future, or perhaps help them down the road, with a referral or a reference. But for that time being, The tour of duty's mission is the overlap between employee goals and the company’s goals.
By establishing an alliance between the company and its employees through these different tours of duty, a company can "invest in the long-term future without sacrificing adaptability.” If you follow sports, you’ll probably notice this is similar to how a sports team operates - the team is together for a period of time, and when it's time to revamp or move on, players can leave, either through Free Agency, or teams can trade or release their players.
What I find most compelling about all these ideas is that they acknowledge a different relationship between the manager, employer and employee where each is treated as a partner and each can both win and contribute to make the other successful. At the root of this are three main things:
Incentive Alignment - Under these frameworks, the incentives between the employee and employer are in alignment versus diametrically opposed. And both the employer and employee are incented to not just look out for themselves, but for the other. Furthermore, there is an extended time horizon in the case of Hoffman’s “Alliance Model” that I think many of us know to be true: if we believe that personal brand and reputation is important, it’s a good idea to treat people well in case we may work with them again in the future.
Transparency and Trust - By aligning incentives under The Alliance, both parties can now speak more transparently and honestly about their goals, metrics, good news, and bad news. By showing up and speaking with radical candor in a way where you speak honestly and care deeply, they begin to develop a sense of trust in the relationship.
Respect and Acknowledgement - Under the old contract, companies had a paternalistic relationship with their employees. Furthermore, as companies scaled and prioritized for efficiency, employees got treated like cogs in a wheel. This model treats employees like the unique individual who they are. People have a human desire to be seen and acknowledged. This new relationship pays credence to that, and treats the employee less like a “resource” and more like a “human.”
One of the beauties of this model is that it lays to bare some of the commonly held beliefs we have had but are too afraid to speak about openly. We know that employees are probably going to leave, probably are curious about exploring other roles, and probably cannot guarantee them lifetime employment, but we still pretend that those things are true.
The Alliance model takes some of those beliefs, flips them on its head, and instead of tip-toeing around the obvious, just transparently and openly makes the case for a better and more mutually beneficial relationship.
The Alliance model is one of many models for rethinking the employee-employer contract. But with any new model or approach, this requires a fundamental shift in thinking and rewiring our old maps of how we think about employer-employee relationships on a number of dimensions:
Definitions of Retention- Even though we all know that most employees leave, we make a big deal of when it happens and view it as a “scar” if an employee leaves “too early” from a company. We need to reset and redefine our expectations around retention and duration of how long an employee stays
Manager Empowerment - Managers need to move from holding talent to empowering talent, and really embrace their role as the coach, facilitator and enabler of talent. Being able to get the most out of your people while they are there and to enable them to be successful should be the two primary goals of the manager
Career Enablement - Employees need to be much more self-directed with how they manage their careers, pursue opportunities and develop skills and competencies. They need to have a set of career readiness skills that they can use to map the course they want to take.
Transactional to Continuous - Just like a customer experience is not a one time thing, but rather an ongoing relationship that has to be monitored and evaluated, the employee experience is also the same. For the time you have your employees you should be thinking about the exchange of value in the employee-employee contract, and making sure that you are holding up your end of the bargain. This is not a one time deal, but rather a continuous renewal.
At the fundamental core, as Drucker said, the purpose of a business is to “create and keep a customer.” If you remove everything else, that is the sole premise of the business.
Employees are a critical driver of that and without them, it makes it hard to effectively and efficiently run a business. To do this, companies should think deeply about the deal and promise they are providing to their employees.
What’s Your “Deal?”
Josh Bersin published an article last January about how companies and leaders need to re-think their “deal.” The deal comes down to what you are offering your employees? I agree with Josh’s sentiment and I would go one step further - once you decide what the deal is, you need to do whatever you can to be transparent about the deal to all of your current and future employees.
A deal that features the Tours of Duty concept will work for some companies. For others, they may decide that a traditional approach is what they want - others will fall somewhere in between. But the importance of the deal for me is that you actually take the time to define what it is and what it is not so you know exactly where you stand and what you are offering. Unless you articulate what you stand for and back it up through your investment and actions, you will have trouble attracting (and retaining) the talent you need to achieve your business goals.
Many people leave due to mismatched expectations - a company promises work-life balance as part of the deal, but then doesn’t provide any. A company says it values diversity, equity, and inclusion but doesn’t do anything to follow through on that promise.
For now, employees have leverage when it comes to choosing where they work. If you want to win the war for talent in the future of work, you need to re-think the employee-employer contract, develop your deal, and articulate it clearly and transparently to every employee.
2. People You Should Follow
Here are some people you should consider checking out if you want to learn more about ideas behind the alliance, and other career and mobility related topics
Ben Casnocha - Ben is the co-author with Reid Hoffman of the book The Alliance
Christina Wallace - Christina is an author of The Portfolio Life, and her work around portfolio lives and careers is a new and interesting way to think about developing people.
Julie Winkle Giulioni - Julie is a speaker, consultant and author, and her book Promotions Are So Yesterday offers a great new framework that companies can use to promote internal mobility and growth inside their organizations
3.What I’m Following
Podcast: Leadership in The New World of Work - This week, I spoke to Nick Goldberg, the CEO and Co-Founder of EZRA Coaching, an executive and leadership coaching platform. As a leadership coaching platform, Nick’s has thousands of executive coaches who are working each day with leaders on the front lines, and he personally meets with numerous Chief People Officers.
Article: How to Help Managers Manage Burnout - Excited to share my most recent article on Fast Company which is meant to put a new definition around the role of a manager and what they should be focused on to manage effectively in today’s workplace.
Event: Making Career Development a Priority - I’m doing a LinkedIn Audio Event on how to make career development a priority in your organization.
Finally, If you’re looking for some help for your learning and development, team meetings or professional development for next year, I’d love to work with you: Here is how I might be able to assist:
Team Trainings & Professional Development: Happy to facilitate training or professional development opportunity for your team & organization - common topics include: career development, influence without authority, effective relationship building, and stakeholder management
Support Your Offsites & Meetings: Speak or facilitate at your team’s offsite. Need a guide to facilitate or speak at an upcoming offsite, QBR or all hands? Happy to engage here.
Leadership & Learning Programs: Formal training and leadership development in your company, such as new manager or new leader training, or skill-based programs.
Feel free to contact me directly for more details!
That’s all for this week. Have a great week!