The psychological contract between employers and employees is under considerable strain, according to research conducted by Malpas HR Services.

The research suggests that employers will have to drastically reverse the downsizing initiatives of the 1980s if they are to be able to function in a social context where staff loyalty is scarce and key managers are eschewing the long hours culture in favour of a better work/life balance.

The survey of 180 general managers and personnel practitioners was conducted amongst Malpas students studying CIPD flexible learning programmes leading to professional qualifications.

It reveals that employers and staff have deep misunderstandings about each others’ expectations and aspirations.

Just over half of the employers feel that staff do their job “and a little bit more” whereas 80% of employees believe they are working beyond the requirements of their employment contract.

The view of employers is generally bleaker than that of staff. Only 45% of employers view the relationship as collaborative and mutually beneficial, compared with 60% of employees.

Commenting on the research, Margaret Malpas, director of Malpas HR Services said:

“The survey reveals considerable discrepancies between what each side believe the other is contributing to the psychological contract. In a highly competitive recruitment market it is vital that HR people and employers develop a full understanding of their employees’ expectations and aspirations. The psychological contract between employer and employee lies at the heart of the employment relationship and unless employers understand these ‘unspoken assumptions’ they will not succeed in optimising individual or organisational performance.”

Today’s staff – particularly managers – have considerable confidence in their worth and mobility. This is not only the result of full employment in some skill areas, but also in the shift of the psychological contract over the last 20 years or so, in particular the end of the ‘jobs for life’ culture.

“It is going to become even more expensive to manage the recruitment and retention of staff. For example, employers are going to have to put their hand in their pockets and invest real money in succession planning,” said Margaret Malpas.

The two key questions raised by the survey are:

• Is it viable for employers to meet their employees’ current and future expectations?
• Is the concept of long term employment on the brink of being completely unsustainable?’

“The significance of this research is that it demonstrates that there are still many discrepancies between employers and staff about the nature of the modern psychological contract,” said Margaret Malpas.

Summarising how employers should respond to this new information, Margaret Malpas identified four key action points:

• Employers need to develop a closer understanding of employees’ exceptions so that they know what they are working with
• With levels of staff loyalty so low, succession planning is now a critical issue
• Over-staffing may need to become the norm if operations are to be maintained in the face of higher attrition levels
• Senior staff and key workers can no longer be relied upon to entertain a long hours culture which impacts on their work-life balance. Again, the conclusion is that employers will need to “over staff” in order to sustain their operations at current levels.