Renewing the Social Contract

July 31, 2013

The “social contract” that prior generations had, or thought they had, between businesses and employees has disappeared, or at the very least it has radically changed. Globalization, right-sizing and a generally more competitive business environment have evaporated the trust between employers and employees, and the implications on economic development are just being realized decades later.

President Obama spoke last week about growing the middle class to grow the economy. A new social contract has to be restored for that to happen. This 21st century contract must meet the demands of our economic times for business, one in which competitors rise from any part of the globe very quickly and geopolitical threats can obliterate years of hard work. The workforce has to feel secure enough so that the workers will feel confident enough to make long-term decisions. This includes feeling confident enough to buy homes and invest in their communities.

Businesses are desperate for flexible, skilled workers, but are skittish about dedicating to long-term training programs for fear that the employees will leave for a better offer as soon as they can. The best employees seek interesting work in flexible environments, but have little loyalty to the companies themselves because of what they have been through the past 20 years and perhaps what they have seen their parents go through. As you can imagine, these issues perpetuate the problem and lead to even less loyalty by both businesses and the workforce.

Businesses have a role in defining this contract, and many are well on their way. Some of the very best companies have re-doubled their internal training efforts and are providing creative incentives that lead to employees staying longer, growing with the company and building institutional knowledge for the company and the industries they work within. Some companies are gaining an advantage in recruiting and retaining the best workers through deep analysis of their needs and trends in the workplace.

Federal, state and local governments as well as non-profits have a role to play. The myriad of workforce programs have made it difficult for willing workers and businesses to navigate where they can connect to resources for training and retraining. In Ohio, Governor Kasich’s Office of Workforce Transformation is working to alleviate some of the confusion and to align much needed resources to the best programs. Customized workforce training must be well-funded and nimble to react to the needs of emerging technologies, and internship programs must become more accessible to all types of people and businesses of all sizes.

Academia, at all levels, has a responsibility to interact with businesses and the workforce to remain market oriented. Our margin for success is too slim to lose a generation of workers to non-performing institutions. Teaching core, global skills throughout academic programs will enrich those that have the aptitude to move beyond them, and it will sustain those that have to work hard only to achieve the basic standard. We need every student to bring their talents into the workplace to sustain our economic advantage.

Finally, the workforce itself has a role in defining a new social contract. This will require a generation of workers that make the long-term decision to gain skills, dedicate themselves to their employers and their craft (there are more ways than ever to gain knowledge and skills) and to be willing to commit to a lifetime of training and re-training. I believe this is far more than has been asked of any generation in our country’s history.

In fact, to solve this issue and to renew trust, more is required of each component of the system. Workers can no longer learn a singular skill and make a living at it for 30 years. Even entry-level positions require technological and problem-solving skills, gained in educational institutions. Governments cannot ignore the issue nor solve it all by themselves, and a larger percentage of businesses must engage in the effort and not leave it to a select few thought leaders.

Kenny McDonald

One Columbus Update

  • This week our team will be touring the Region with a site location advisor.
  • One Columbus joined our Fairfield County partners for the Lancaster Festival finale Saturday, July 27. The weeklong event is a testament to civic engagement, talent and community and national pride. Thank you to our partners for inviting us to participate in this fantastic event.