Employment Contracts in the 21rst Century: Do they Exist?

• How has the employment contract changed in the 21rst century?
• What are the expectations during the hiring process and once you're employed?
• What should you consider during these complex negotiations?
• What should you put in writing?

During much of the 20th century, there was an implicit contract between employers and employees.  The employee provided their skills and their loyalty and in exchange the company took care of them.   In our grandparents or maybe parents’ generation, employment was more stable. It typically lasted throughout much of a person’s productive years. The employer took care of their careers, their promotions, their salaries etc. When you retired you received a gold watch and a retirement party. When was the last time you attended a retirement party for a coworker with a long-tenure or any retirement party?

Before you begin longing for the ‘good ole days’, think about the impossibility of career change and career transition. There was a much less flexibility in company choice, choice of profession and choice of geography. Options for ending a job were not societally endorsed. There was a lot of stigma related to job change. 

In the 21rst century, few would deny that this implicit contract between employer and employee is broken. The paternalistic concept of an employer taking care of their workers is an anachronism. With the globalization of the economy and the increase of women and minorities in the workplace, this is no longer the case. The average tenure for an American worker is about 2.5 to 3 years across industries! This is the length of time before seeking a promotion or a new job. What is an acceptable amount of job change or job tenure has shifted greatly, in the final quarter of the 20th century and beyond. Some of us may think this is a shame. Some of us still lament this loss. However, it is a reality.

In a new job, people often experience an initial honeymoon phase, where everything is great. For some people, this ends much sooner than desired! If you are in a “right to work” state, in the USA, then there isn’t an official employment contract. Right to work technically means that neither the employer, nor employee is bound to the other.

Where I live, in Atlanta GA we are a right to work state. However, I advise my clients to request a  job-offer letter and reply with a formal, job-acceptance letter. Specify the exact nature of your work role and job description, before accepting an offer. This type of letter can include your weekly hours,  salary structure, job location, timing of performance reviews and reporting structure.

I would advise that you attach a copy of the formal job description to the offer letter. I had a client who failed to do this.  When he was hired, the company didn't attach a formal job description to his offer letter. Since this was a new role, they said they would get to it later. Later never happened. Meanwhile, the employer kept adding more and more duties to his job. My client was drowning in work and didn't have a recourse. He has since left that job and vows to always request a job description in writing. Both parties, employer and employee should initial/sign the offer letter. In my experience, any promises made during the interview process, need to be in writing.

Company revenues may change, conditions may change and often management may change. When I worked in psychiatric, health-care there was a huge amount of staff turnover. I worked at a facility where I had 6 supervisors in a span of 3 years! I was constantly scrambling to meet the expectations of the new boss which were invariably different than my old boss. When there is a lot of staff changes, there may not be any record or institutional memory of these pre-employment, interview promises. This happened to me. When I was hired, I was told that they were building a new career services facility with new staff and wanted me to lead this department. 3 years later, I was still waiting. So, I advise all of my clients to create an employment letter which outlines your terms of employment. This is in your best interests. Each party can modify it and initial it, before the final signing.

I'd love to hear your employment stories from the trenches. Best wishes for career success!

See related articles:
Performance Reviews in a Recession and the Four types of Managers
Pre & Post Nuptual Agreements: Employment Contracts

Author: © 2008-present. All Rights Reserved - Sharon B. Cohen, MA, Counseling Psychology, CPRP.  Career Counselor and Career Transition Specialist. "Helping business professionals, reach their career potential!"

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