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Business man shake contract concept.

The Newest Deal at Work

Burak Koyuncu, Managing Director of Workforce Solutions at LHH UK & Ireland


In 1999, Peter Cappelli published an influential book entitled “The New Deal at Work”. The book explains how the psychological contract (i.e. those unwritten expectations between employees and employers) has been changing over time. Just before the turn of the 21st century, employee-employer relationships had already taken a new shape: Employees were no longer planning to spend their life in a single organisation and they had more control over their own careers. Employers had also begun to understand this new reality and see the need to manage their talent differently.

While the psychological contract of the previous century was, “Do your job well; we (as your employer) will take care of your career”, the new deal at work became, “Do your job well as long as you are with us, and we will equip you with skills that will help you achieve your own future goals”. Now, more than 2 decades after Peter’s book, this new deal at work is still valid for many organisations; however, I believe a newer deal at work is on its way, with the pandemic accelerating the need for it.

Hard vs Soft Data

Take a moment to think about the factors that have shaped your own decisions to stay with a certain company of employment. If your list starts with promotion, advancement prospects, salary, or development opportunities, you are not alone. These factors provide the hard data needed to justify a decision. It might be rational to make decisions based on these factors; however, as human beings our emotions often dominate our rational side in decision making. In fact, the soft data about our workplaces (i.e. data related to our subjective experiences and emotions) can outweigh the hard data.

In the last decade, it has become normal to talk about the soft data regarding one’s workplace. Relationships with colleagues, respect for the boss and a company’s vision or culture have definitely started to go up in the list as main reasons to change employers. This reality has made it harder for employers to retain talent; simply improving the hard data is not enough anymore.

The changes that the Covid-19 pandemic triggered in our work lives also increased the need for us to look at the soft factors in our employment relationships. For example, we saw the importance of working for purposeful organisations that care about their people, or managers who don’t try to use computer surveillance systems to control what we are doing every minute. Our working lives and relationships have gone through such fundamental changes that some of these soft factors are likely to become the hard factors for employment changes after this crisis is over. Therefore, the psychological contract in 2020s needs to be not only about the career, salary, or development options, but also about the emotional aspects of our jobs and our lives.

Here comes what I believe is the newest deal at work: “We trust you, we care about you, and we grow together as we make this world a better place.” Let’s look at the three key ingredients of the new deal together:

The Newest Deal at Work:

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Trusting: One of the reasons that the pandemic created a challenge for many corporations is that they didn’t have established cultures where employees were trusted to work wherever or whenever they wanted. Those organisations are still trying to figure out how to control their employees through various remote working mechanisms; but they will soon realise that the only way forward is to trust their employees.

Belgian Federal Office of Social Affairs is a great example of a trusting organisation. Since Frank van Massenhove became the head of the organisation in 2002, he focused on creating an organisation where presentism and the time employees spent in the office didn’t matter anymore. They stopped caring about where, when, and how the work was done, and started evaluating people on their results only. The result, in terms of employee engagement, productivity, customer satisfaction costs, and ability to attract new talent, have been exceptional since they transformed to be a trust-based organisation.

Caring: Organisations with a focus on creating relationships that are supportive and interactions that put the people and society before profits are the ones that build a caring culture. Openness, concern about others, and supporting those in need of help are some ways for organisations to demonstrate care.

Cleveland Clinic’s “Code Lavender” project is a great example of a caring culture. In 2008, Cleveland Clinic started this initiative to support healthcare providers with a holistic rapid response team if those healthcare professionals reach their emotional limit during stressful days at work. The initiative was such a success that it not only increased Cleveland Clinic employees’ engagement and wellbeing, it also increased patients’ overall satisfaction. This initiative later became a model for many other healthcare organisations in the US as well.

The Covid-19 crisis has brought to our attention the significant role of care in organisations. We have seen great examples of companies that care about their employees and the society. For example, companies like Gravity Payments protected their employees’ jobs despite challenging market conditions. Others, such as Airbnb, who had to make some difficult decisions due to the crisis, made those decisions with so much care that both the employees who were let go and the ones who stayed felt truly cared for by their employers.

Growing together: Growing together while working in the service of a great cause is one of the biggest rewards organisations can offer to their employees. Learning and development alone can be motivating for people; however, without having a clear direction and purpose, those development efforts might not achieve the best results for all parties.

Many successful non-profit organisations today have mastered the creation of “grow together” environments. Due to their nature, most NGOs have a clear social purpose. When coupled with opportunities for development, they provide the perfect environment for people to grow together. My own experience volunteering at an NGO for 5 years was proof of this. While serving people from disadvantaged backgrounds as part of some educational work, I also learned a lot about human behaviour, collaboration, teamwork and resilience. Project teams across the organisation came together regularly to share their experiences, discuss their challenges and solve problems together, which created a great growth environment for which I am still grateful.

Growing together while serving a greater cause is not only for non-profit organisations though and people expect such environments in any organisation these days. Robert Kegan and Lisa Laskow Lahey’s research into deliberately developmental organizations provides three great examples of organisations that help employees grow together. One of these organisations, Next Jump, is a technology company dedicated to changing workplace culture. Next Jump’s own developmental culture is a great example of how they achieve their organisational purpose. For example, every employee is part of a “people org chart”, which ensures that they have a coach responsible for their growth. They also have developmental gyms that embed trainings, continuous feedback and coaching into their culture.

The newest deal at work is very different than the former ones. Once organisations create an environment where people trust each other, care about each other and grow together in the service of a great cause, then the boundaries between principals (managers/owners) and agents (employees) will also start to be blurry. In such organisations where employees feel like true owners, there might not even be a need for a deal or psychological contract anymore.


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