Addressing The Changing Psychological Contract Of Employment

The changing psychological contract of employment has important implications from a knowledge management perspective. With few employers today able to guarantee life-time employment, and indeed some employees no longer looking for life-time employment, there is a need to think more strategically about how to address the area of developing and retaining ‘know how’.

This is not a new phenomenon, it is an area that organisations that have introduced flexible work contacts, such as the media, healthcare and higher education, have had to address for some time. It was also a theme that I identified many years ago when I was conducting some research for the Employers Forum on Age on the practices adopted by organisations for managing an age diverse workforce^[2]. At that time, the early 1990s, many large organisations were pruning their workforce as a way of increasing organisational efficiency. In the majority of cases it was older employees who were losing out. These were often the ones with valuable knowledge that in hindsight the organisation found that it really could not afford to lose.

What did stand out in my mind from that piece of research was the way in which the more enlightened organisations were addressing the tensions of having to come to terms with the fact that guarantees of life-time employment were no longer feasible. Some of the organisations that participated in the research ran workshops and focus groups where employees were able to talk about the broader changes taking place in the economy and society, the implications for employment and careers, and thus the importance of focusing on employability.

One major retail organisation had adopted a multiple strand approach to addressing the issue of employability. This included helping employees assess whether they had the skills to run their own businesses, helping individuals apply and/or broaden their skills through working on community projects, as well as providing training that led to a nationally recognised qualification.

Other organisations were considering phased retirement options. If used in a strategic way, phased retirement can have benefits from both the organisation’s and the individual’s perspective. The transition period could be used to help transfer skills and knowledge between the retiring employee and other employees within the organisation. But as we know knowledge transfer only takes place in situations where the individual who shares his/her knowledge gets something back in return, so what would the ‘WIFM’ factor be in this scenario?

• Some space in their lives to start to explore and build other interests before reaching retirement age.

• An opportunity to develop/enhance their ‘softer’ skills through coaching and mentoring.

• A sense of feeling valued.

• An opportunity to build new networks in preparation for the transition into retirement.

^[2]For further details about the work of the Employers Forum on Age see www.efa.org.uk.