Companies and the social contract

August 1st, 2009

I listened to a great harvard podcast the other day about the social contract in relation to business. The concept was simple – in times past companies would look after you beyond simply paying you. In return you would be flexible about how you delivered value and more loyal than otherwise.
This wasn’t a job for life scenario. Companies allowed a myriad of small things which technically they shouldn’t: use of company phones and photocopiers fit personal business; a nod and a wink at the length if your lunch break; trust in your expens report.
What they got were people who took a little mire than they technically shoud, but never overtly stole. When crunch time came employees would work the extra hours and not complain. They’d answer their mobiles on a Saturday.
Now companies are cracking down on all these small niceties exactly when they are also asking employees to take haircut on raises and salary. It’s working because people need their jobs and the bottom line is always easy to bump by a few percent in a push.
But what happens in three years? Rosy scenario is we’re growing again: jobs are easy to find and money is available.
I predict employees will desert these ‘efficient’ companies at the drop of a hat. They’ve shown they dont care about you so why should you care about them?
So why shoud companies care? It’s all business anyway right?
They should care because the old way was a great deal. For fifty bucks a month on tax deductible sundries they got an extra ten hours a month out of execs and people willing to work Saturday. Now they’ve saved their six hundred dollars a year but productivity has dropped – people who went on a five thousand dollar course leave for a competitor – that’s eight years of savings down the drain and you need to find a new person and bring them up to speed.

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