In the world of work, there's a fundamental agreement that underpins the relationship between an employer and an employee. This agreement, often referred to as the social contract, has traditionally been based on the concept of the American dream - the ability to secure stable employment with comfortable compensation and benefits. However, as the millennial generation becomes a dominant force in the workforce, this social contract is undergoing a significant transformation.
Historically, the social contract was simple: in exchange for their labor, employees received a salary and, in many cases, a sense of job security. Employees often felt a duty to stay with an organization for many years, sometimes even their entire careers. But, Millennials came of age witnessing the economic downturn of the early 2000s and the impact it had on their parents' generation. They saw organizations violate their social contracts with their workers (our parents), leading to a deep-seated distrust in these systems. They've also seen almost total stagnation in wages during their lifetime. This has resulted in a shift in the way millennials view their relationship with their employers; they no longer see it as a lifelong commitment but rather a temporary arrangement. What was once considered "job hopping" has become normalized in younger generations as the only way to get a raise or promotion. The average tenure of an employee has been reduced to just four years.
The shift has led to changes in management styles, with managers needing to be more active in their employees' development knowing that an employee will likely only be present for a few years. It's also led to changes in compensation structures and development opportunities. The new social contract is still being rewritten, but it's already reshaping the relationship between employers and employees.
This post is based on the thesis "Millennials, Be Yourself Sometimes" by Stephen Aber at Queens University of Charlotte, 2019.