University of Virginia public management professor Deborah Roberts contends that public agencies should make lifetime employability, not employment contracts, the new social contract. I've also endorsed this concept in my recent book on new pay systems in public agencies because it enhances employee commitment, loyalty and organization efficiency. If employees know that future benefits will come if they learn to do more, they'll stay. They reason that because the agency has no commitment to them, they need show none to the agency. The resulting high turnover rates and ever-increasing human resource costs waste tax dollars.
Employment contracts are no better because they simply create another set of win-lose dynamics.
Harvard University labor economist George Borjas points out that many companies start new hires out at lower pay to recover training costs. The employee gets explicit promises of promotions and compensation directly linked to productivity increases. This strategy, while more efficient than the employment contract, would be significantly improved by making the lifetime employability provision part of the overall compensation plan. A brief may help clarify. Because USIS did not package this training investment as part of an overall compensation strategy, the employment contract becomes a disincentive to join the agency.