Is the Employer-Employee Social Contract in Tech … Now Broken?

The social contract between employer and employee in startups and scaleups seems to be in an evolving and weird state.

For most of my early career, folks rarely left if they were well-paid, got promoted, had a good boss, and had a good job. Actually, only 2 folks ever left the Adobe Sign / EchoSign team we wanted to keep … in the first 5.5 years!

And actually, let’s look what that team went on to do after:

• COO Gong
• CRO Brex
• SVP Gong
• SVP Seismic
• CRO Rippling
• VPS Talkdesk
• VPS PayPal
• VPS Cloudinary
• and so much more

But tech was tiny back then, options were fewer, and IPOs, even acquisitions, were rare.

Things got bigger, and tech drew in a more mainstream crowd, and it needed to in order to scale. Not just the romantics and the pirates.

Those folks, in many cases, took a more transactional approach to jobs, switching for a little more money or a better commute. Turnover went up, but there was still a social contract: no layoffs if you can avoid it. Free lunches and perks exploded in this phase. Tech became more coddling, for better or worse. It was different, but everyone knew the new rules.

Then the Covid Boom of late 2020 to early 2022 changed everything again. The war for talent became a fevered global battle. Even mid-pack employees, reps who never hit quota but worked somewhere well known, etc., would get 3, 4, 5 higher paying job offers seemingly in a week. Folks stayed for shorter and shorter periods, productivity fell, and startups and scaleups became obsessed with just … hiring. No matter the downsides of how. 2 weeks’ notice became 2 minutes’ notice, if any at all.

Now 2023 has changed everything again. Layoffs came fast and furious in late 2022, but still had a stigma. Companies were highly criticized for layoffs during the holidays, for more than one round, etc.

Now that stigma is mostly gone. Layoffs have become routine, for the first time in tech IMHE.

Is there any social contract now at all? If employers do routine layoffs without much downside, and with employees used to leaving jobs rapidly for any or no reason with no downside …

What do employees, employers, or anyone “owe” each other in the workplace, other than equal pay?

Personally, I haven’t changed. I still hope everyone stays forever, or ideally, at least 3-4 years. I hope that autonomy, good pay, trust, and teamwork are incentives to stay. But the world has changed.

What are you doing differently?

And if you’re not sure yourself, as an employee, what to do next, I have just one bit of advice.  Put everything else aside.  Just go work for someone great, doing something great.  At least for 24 months, ideally longer.  But at least 24 months.  That will put you on track to really achieve your dreams.

And as founders?  If nothing else, try at least to get as many of your First 50 Employees to still be Pirates and Romantics as possible.  The ones that just really, really to both do a startup — and do something amazing.  Something without politics, without bureaucracy.  The ones that just want to fly.