The new covenant of employability

The Authors

Marilyn Clarke, School of Management, University of South Australia, Adelaide, Australia

Margaret Patrickson, International Graduate School of Business, University of South Australia, Adelaide, Australia

Abstract

Purpose – Changing career patterns and the erosion of job security have led to a growing emphasis on employability as a basis for career and employment success. The written and psychological contracts between employer and employer have become more transactional and less relational, and loyalty is no longer a guarantee of ongoing employment. Individuals are thus expected to take primary responsibility for their own employability rather than relying on the organisation to direct and maintain their careers. The purpose of this paper is to identify and examine the assumptions underpinning the concept of employability and evaluate the extent to which employability has been adopted as a new covenant in the employment relationship.

Design/methodology/approach – Through a review of relevant literature the paper discusses current research on careers and employability and examines the available evidence regarding its adoption as a basis for contemporary employment relationships.

Findings – The paper finds that the transfer of responsibility for employability from organisation to individual has not been widespread. There is still an expectation that organisations will manage careers through job-specific training and development. Employability has primarily benefited employees with highly developed or high-demand skills. Employability is not a guarantee of finding suitable employment.

Practical implications – Employers can assist their employees by clarifying changes to the psychological contract, highlighting the benefits of career self-management, and providing training and development in generic employability skills.

Originality/value – The paper questions underlying assumptions about employability and explores issues of relevance to human resource managers, policy-makers, employers and employees.

Article Type:

General review

Keyword(s):

Employment; Psychological contracts; Careers; Career development.

Journal:

Employee Relations

Volume:

Number:

Year:

2008

pp:

121-141

Copyright ©

Emerald Group Publishing Limited

ISSN:

0142-5455

It looks like a hopelessly one-sided contract, but in fact the desire for job security is going out of fashion. Continuous service to one master is increasingly seen as stultifying rather than safe. The dynamic people of today's dynamic world are attracted to jobs where they can see clear opportunities for themselves, with opportunities spreading in all directions (Bagshaw, 1996, p. 16).

Employability, the conditions determining it, and its role in shaping and reshaping individual careers, has emerged as a key objective for those seeking ongoing, worthwhile employment (Forrier and Sels, 2003). At the same time, careers, or the longer-term outcomes of employment opportunities, are themselves undergoing a major paradigm shift. Employment and having a career are now seen less in terms of employment security within a single organisation, and more in terms of individual employability across relevant labour markets (Iles et al., 1996; Newell and Dopson, 1996). Employability, it seems, is becoming a key benchmark for career success (Carbery and Garavan, 2005).

Yet, despite its widespread use across both the academic and popular management literature, the construct of exactly what constitutes employability remains elusive. Broadly defined, employability refers to an individual's ability to find a job, retain a job and move between jobs and/or industries should the need arise (McLeish, 2002; Brown et al., 2003; Sanders and de Grip, 2004). Hillage and Pollard (1998, p. 2) define employability as “the capability to move self-sufficiently within the labour market to realise potential through sustainable employment”, a capability that is realised as an outcome of an individual's assets, such as skills, qualifications and personal attributes, the way in which those assets are used, how they are presented to an employer, and contextual factors, such as current labour market conditions. Employability has been utilised both as a measure of the likelihood of finding suitable work and an outcome of a new psychological contract where shorter-term employment relationships are built around an exchange of benefits and contributions.

Interest in employability has been driven by two main factors:

the economic impact of skill and labour shortages (exacerbated by an aging workforce) and the need to address those issues at a public policy level; and
the changing nature of careers and the erosion of job security (Hillage and Pollard, 1998; van der Heijden, 2002; Department of Education, Science, and Training, 2004).

Many organisations are now driven by the need to be flexible and adaptable and therefore are no longer able to promise long-term job security. However, proponents of employability argue that they can offer “employability security” by providing developmental opportunities that will assist in the “accumulation of human capital” and enhance future job prospects (Moss Kanter, 1989, pp. 321-2). Garavan (1999) refers to employability as “the emerging new deal” in which “employability as opposed to employment security is now considered the new form of psychological contract between employers and employees”. He emphasises mutual obligation and responsibility for developing and maintaining “advanced general skills” as opposed to the more traditional concept of firm-specific skills, and notes that “the new way of work is for employees to think of themselves as self-employed even when they are employed by an organisation” (Garavan, 1999).

In recent years there has been a proliferation of articles arguing the merits of employability (e.g. Inkson and Arthur, 2001; Thite, 2001; Eby et al., 2003; Hind, 2005), yet the exact nature of its components are only loosely understood. In general, employability has been accepted in the careers literature as a reflection of the “new psychological contract” (Maguire, 2002) and a characteristic of the new patterns of career and employment (Guest, 2004). Rather than simply “a nuance in more contingent employment relationships” as predicted by Pascale (1995, p. 21), it continues to be promoted in much of the career literature as the norm towards which individuals and organisations should aspire (Baruch, 2001, 2003, 2004a; Fugate et al., 2004; King, 2004), promising that employers will benefit through the creation of a pool of employable workers while employees will be free to take charge of their own career destiny. Employability, according to this viewpoint, is more than simply a variation on the psychological contract. Instead it is presented as the “new covenant” between employer and employee in which both parties share responsibility for maintaining and enhancing employability in an “adult-adult relationship”, rather than the more traditional parent-child relationship characteristic of the old employment contract (Waterman et al., 1994, p. 87). But is employability a covenant that has been freely entered into by both employer and employee, is it simply a variation on the psychological contract, or is it essentially a one-sided contract? Is there a mutual understanding of what is meant by employability and of the reciprocal roles and responsibilities associated with maintaining and enhancing employability? Does employability really lead to employment?

A covenant is a formal agreement (written or unwritten) which has been freely entered into by the relevant parties (Cheshire et al., 2002). The terms and conditions of a covenant are explicit and, most importantly, are legally enforceable (Cheshire et al., 2002). By contrast, the psychological contract refers to “the unspoken promise, not present in the small print of the employment contract of what the employer gives, and what the employees give in return” (Nicholson, 1995, p. 455). The terms and conditions of the psychological contract may be expressed or implied (Rousseau, 2004), the parties to the agreement may differ in their perceptions as to what has been agreed, and “there may be ambiguity about what each has agreed to do or when or how they will do it” (Nicholson, 1995, p. 455). Psychological contracts comprise both transactional and relational elements (Morrison and Robinson, 1997). The transactional elements include specific, short-term, monetary obligations between employer and employee, while the relational elements refer to longer-term obligations which may be based on commitment, loyalty and trust (Morrison and Robinson, 1997). The shift towards more flexible, shorter-term employment contracts has meant that psychological contracts are increasingly transactional rather than relational (Rousseau, 2004). Employers and employees are realising that long-term loyalty and commitment cannot be guaranteed and that jobs are more likely to be for now rather than forever.

Yet, psychological contracts do not change quickly. Rousseau (2001, p. 512) suggests that over time a psychological contract “takes the form of a mental model or schema, which, like most other schemas, is relatively stable and endurable”. Thus, new psychological contracts tend to be interpreted in the light of past experience and existing schemas. Individuals continue to expect that the promises made in the past will have a bearing on current and future relationships with their employer. For example, if an organisation used to offer relatively secure employment, internal career opportunities and ongoing training and development then individuals are likely to expect that they will continue to be rewarded in these ways as long as they continue to meet their part of the bargain. This is particularly the case for mid- and late-career employees whose past experience has been based on a more relational psychological contract.

Clearly, the shift from employment security to employability involves a major shift in the employment relationship yet some writers suggest (e.g. Iles et al., 1996; Martin et al., 1998; Capelli, 1999b) that both employers and employees (particularly those with scarce or highly desirable skills) are readily adapting to the idea of employability as the basis for contemporary employment relationships and have accepted the shift from relational psychological contracts to transactional psychological contracts, or even to “balanced psychological contracts” which combine the mutual concern of relational contracts and the performance demands of transactional contracts (Arthur et al., 1999; Herriot, 2001; Rousseau, 2004). If this is the case, then how this transition has taken place?

The dynamics of employability appear to be based on a number of assumptions that have emerged as recurrent themes within the managerialist literature. These assumptions, which include both explicit and implicit statements about the responsibilities and benefits of employability, remain relatively unexplored and unchallenged. The aim of this paper is to identify these underlying assumptions and then to examine their validity in the light of what is currently known about employability. The paper questions whether the image that is presented is a realistic portrayal of current employment relationships or whether it presents an idealistic perspective reflecting employer demands for increased flexibility and reduced responsibility. If employability is to be the basis of either a new covenant, or a different psychological contract, then it is important that we understand what is meant by employability, how it works in practice and whether or not it has brought about greater independence for employees, greater flexibility for employers and a more generally employable workforce.

Assumptions

Assumption 1. Responsibility for career and employability primarily rests with the individual

In recent years the belief that responsibility for career management and employability is essentially the province of the individual appears to have become widely accepted across much of the career literature (e.g. Estienne, 1997; Iles, 1997; McQuaid and Lindsay, 2005; O'Donoghue and Maguire, 2005). This apparent transfer of responsibility has been enacted in line with what some career theorists describe as the gradual demise of the organisational career and the emergence of new career forms, such as boundaryless careers (Arthur and Rousseau, 1996; Hall, 1996a; Arthur et al., 2005) or protean careers (Hall and Mirvis, 1995; Hall, 1996b). As career structures change it seems that people are being encouraged “to weaken their ties with organisations and develop relationships built less on the expectations of a relational, long term commitment and more on transactional, short term, financial and demarcated exchanges” (Cohen and Mallon, 1999, p. 333).

Arthur and Rousseau (1996, p. 6) refer to the boundaryless career as “one of independence from, rather than dependence on, traditional organizational career arrangements”. Initial studies into boundarylessness focussed on the capacity of an individual to shift more or less seamlessly from one job or organisation to another, thereby transcending physical boundaries. More recently boundarylessness has also come to include psychological boundaries or “the perception of the capacity to make transitions” (Sullivan and Arthur, 2006, p. 21). The boundaryless career (Arthur and Rousseau, 1996; DeFillippi and Arthur, 1996) is seen as offering greater freedom, flexibility and personal choice, although greater freedom brings with it a new level of responsibility. To be mobile across physical and psychological boundaries requires both the accumulation of “career capital” and a willingness to cross either internal or external boundaries (Inkson, 2006, p. 58). Thus, according to the proponents of the boundaryless career, individuals must now develop strategies for managing careers and employability across jobs and organisations rather than relying on internal organisational career ladders (Currie et al., 2006).

Similarly, protean careers have been portrayed as a new form of career to match the needs and desires of contemporary employers and employees (Hall and Mirvis, 1995; Hall, 1996b). The protean career is described in terms of flexibility and adaptability, with individuals theoretically able to adjust to changing circumstances by reinventing or reshaping themselves as required. This reshaping enables the individual to remain employable in contrast to the obsolescence that is likely to occur if skills and abilities are not continually maintained or enhanced. Hall (1996a; Hall and Moss, 1998; Hall, 2002) argues that the protean career is a process which the person, not the organization, is managing, that it is values-driven and is self-directed, or as Baruch (2004a, p. 71) describes it, “the protean career is essentially a contract with oneself, rather than the organisation”.

Boundaryless and protean careers are based on the assumption that responsibility for career and employability primarily rests with the individual. The take-up of individual responsibility is seen as benefiting employees in two key areas. First, employability is touted as a viable alternative to employment security. In theory, the employable person is able to move from job to job, organisation to organisation, confident in their own abilities and marketability. He or she is not dependent on the organisation but is able to take control of career through “enriched jobs, lateral moves and multiple career paths” (Iles et al., 1996, p. 19). Second, employability is seen as providing new opportunities for job satisfaction and self-fulfilment by encouraging individuals to engage with their own learning and development. Employability means that the individual is able to “direct, guide and change the shape of his career according to personal choice” (Hind, 2005, p. 269). Career management becomes “a process through which an individual makes a contract with him/herself to make sense of experiences, manage career choices and seek personal fulfilment” (Hind, 2005, p. 269).

The transfer of responsibility is thus portrayed as empowering employees, offering a more balanced relationship between employer and employee. This portrayal, however, may be deceptive. Employability has the potential to shift the balance of power in the employment relationship further towards employers, by reducing their obligations and commitments to employees in terms of job security and development, while increasing their choices and flexibility in terms of who they will employ and under what conditions (Jacoby, 1999). In addition, this new level of responsibility can only be empowering if employees recognise and accept the new arrangement.

Yet, to what extent have individuals acknowledged that they now have primary responsibility for their own employability? Has there actually been a widespread transfer of responsibility from organisation to individual and a take-up of the new forms of career? Evidence suggests mixed results. For example, the younger, well-educated workers, Generations X and Y are regarded as desiring employability rather than long-term employment, the freedom to choose and manage their own careers, the opportunity for “career self-reliance” (Bogdanowicz and Bailey, 2002, p. 127). Jacoby (1999, p. 125) describes the younger generation of workers as resembling “nineteenth-century craft workers, who treasured their autonomy and hedged their labor-market risk with a diverse set of skills”. For them, employability is assumed to be a natural state rather than an expression of the new employment relationship, although, given the growth of short-term and casual employment contracts in recent years, it is difficult to know whether the younger generations have sought this type of relationship or have simply adapted to it as the norm on the basis of their experience.

Well-qualified professionals or those in managerial positions are often cited as having accepted career self-management as their responsibility (Currie et al., 2006). Yet, a longitudinal study of career management in a large financial institution in the UK found that over time many of their professional employees had become less, rather than more, independent in terms of career management (Atkinson, 2002). Attempts to transform the organisational culture from traditionally bureaucratic to flexible and responsive had been hampered by resistance from staff who continued to seek job security through a relational psychological contract and organisationally managed career structures. Efforts to promote “career resilience” rather than “career dependence” had been largely unsuccessful (Atkinson, 2002, p. 21). It appeared that the psychological contract under which they had been employed initially continued to dominate their expectations, despite extensive organisational change and ongoing job losses within the industry.

The growth of flexible or shorter-term employment contracts is sometimes seen as evidence of individuals recognising responsibility for managing their own careers (e.g. Mallon and Cohen, 2001; Briscoe et al., 2006). Highly skilled workers and professionals are assumed to have willingly adopted a more independent way of working and to have benefited from taking ownership of their own careers (Iles, 1997). One example that has been given is the IT specialists working in Silicon Valley, who are apparently able to move relatively seamlessly across organisations and who perceive themselves as “self employed” even when they are employed by an organisation (Arthur and Rousseau, 1996; Jacoby, 1999). This example, however, would appear to be an exception rather evidence of a general acceptance of individual responsibility for employability. The volatile nature of the IT industry has helped create a culture of independence among its workers, with employment contracts commonly tied to projects, and employability tied to maintaining and updating skills and experience across the industry sector (Loogma et al., 2004). In addition, in this industry individuals with non-fungible skills are highly sought after, unlike other industries where individual employees may be easily replaced. An alternative viewpoint is expressed in a study by Guest (2004), who challenges the extent to which flexible contracts are superseding more traditional employment relationships. The study argues that not only are there fewer people on flexible contracts than many claim, but also that a high proportion of those on flexible contracts would prefer a more permanent employment contract with its associated benefits.

It would seem that those who desire freedom and flexibility, or those who have never experienced the “old” psychological contract, with its promise of security and organisational career management, are more likely to accept that responsibility for career and employability primarily rests with the individual. However, despite arguments to the contrary, there is still only limited evidence that employees in general have recognised and embraced a different and more independent view of career management. As Baruch (2004b, p. 241) observes, “it is relatively easy to alter behaviour. It is more difficult and demanding to change beliefs, and it is almost impossible to swap values and frameworks of mind”. Beliefs as to who should accept primary responsibility for employability are unlikely to change quickly. As a consequence, many mid- to late-career workers are struggling to understand what it means to be employable and to develop strategies for managing their employability (Baruch, 2004b; Peel and Inkson, 2004). An Australian study by Patrickson and Ranzijn (2003) found that older workers often had unrealistic perceptions of their own employability. The study highlighted a tendency for individuals to evaluate their employability on the basis of past achievements and outdated skills and then to rationalise their lack of employment success as being due to age-related factors rather than employment-related personal attributes. Their lack of experience in managing careers and employability made it difficult for them to understand that it was now their responsibility to remain employable by maintaining and updating skills.

Assumption 2. Individuals have the desire to manage their own career and employability

One commentator writes:

Employees' attitudes, conditioned by hard experience, are changing. People no longer see their employers as responsible for their employability. They take responsibility for it themselves, building their own CVs, accurately assessing their own market worth (Kippenberger, 2000, p. 20).

Employability, it has been argued, reflects the new psychological contract in which the individual recognises that career self-management will provide a fair deal for the future and a greater likelihood of employment success (Meister, 1998; Baruch, 2001).

In many ways employability can be seen as a pragmatic response to the tumultuous downsizing and restructuring of the 1980s and 1990s. As employees watched the erosion of job security, taking control of careers appeared to be an increasingly attractive proposition as it signified a shift in the balance of power in a potentially menacing situation. At the same time, it was a proposition that organisations were eager to promote as a means of shifting responsibility under the guise of exchanging control. Some writers have suggested that individuals see this new mix of freedom and responsibility as preferable to the organisational career experiences of past generations (e.g. Bagshaw, 1997). Yet, do the majority of workers really want to manage their employability? Does this apparent longing for control reflect the reality of the job market or is it simply a means of shifting the blame for inability to find work from employer to worker (Brown et al., 2003)?

Research evidence is patchy, but there is some indication that many individuals do not have the desire for career self-management and have not yet recognised the need to develop career management strategies. For example, a study of 184 individuals from 300 organisations in the UK found that less than 30 per cent felt prepared for a job change (Bates and Bloch, 1996). Very few were aware of their strengths and weaknesses, had plans for self-development or had the necessary information to write a CV or a job application. The majority were not actively seeking development opportunities (even when offered by the organisation) or trying to build and maintain networks. The study concluded that “the quantum leap from the world of long life employment in one or two organizations to the concept of employability is still not comprehended realistically” (Bates and Bloch, 1996, p. 32).

Individuals who are familiar with a more paternalistic employer-employee contract still appear to want, and expect, their employer to offer some degree of career management, and employees still see career support and the associated training and development as important elements in the psychological contract (Rousseau, 2004). In fact, this aspect of the employment relationship is a critical factor in retaining employee commitment and loyalty (Maguire, 2002; Sturges et al., 2003), although organisational support and greater organisational attention to providing career management services may encourage individuals to gradually accept further responsibility for their own career management (Van Dam, 2004).

Assumption 3. Individuals have the capacity to manage their own careers and employability

One argument put forward by some career researchers is that individuals not only have the desire to manage their own careers and employability, but also have the capacity to do so (Hall, 1996a; Inkson and Arthur, 2001; Arthur et al., 2005). In contrast to the adult-child relationship of traditional employment relationships, contemporary employees are seen as wanting an adult-adult relationship that better reflects their capabilities and better serves their needs (Waterman et al., 1994). They are portrayed as capable of determining what is needed to maintain their employability and as the drivers of their own development (Martin et al., 1998).

But is this a description of an ideal or of reality? Has the average employee really been transformed from dependent child to independent adult, seeking and embracing new career responsibilities in a flexible employment relationship? While some may have the capacity to be free agents Pascale (1997, p. 244) argues that “to succeed in the new employment scene, workers need to be self-starters, show entrepreneurship and have an appetite for the social isolation that often goes with becoming a professional free agent”. In other words, to succeed in this environment they must be extraordinary rather than ordinary employees. They must be highly motivated and highly marketable. They should have the capacity to evaluate individual strengths and weaknesses in relation to market and employer expectations, the capacity to reflect on those skills and attributes, and the willingness to seek help as required (Hall, 1996a).

Hesketh (2001) cites metacognitive skills, which include the capacity for self-observation, self-insight, and self-monitoring, as essentials for career self-management. However, according to Civelli (1998), most people do not have the capacity to evaluate their knowledge, abilities and competencies, and even if they do have the tools for self-evaluation they may not have the skills to communicate or sell their competencies to a prospective employer. The need for self-evaluation most often becomes critical when faced with job loss, or job transfer, or the move to self-employment. Older employees or those who have been employed long-term by the same organisation may be particularly at risk unless they have participated in regular self-evaluation as part of a performance management program. Inkson and Arthur (2001) suggest that over time all employees accumulate career assets that can be used to build success across different employment settings. Knowledge is a key asset, categorised in terms of “knowing-why, knowing-how and knowing-whom”. If knowledge contributes significantly to employability, how do individuals go about gaining this knowledge? If, as Civelli (1998) argues, most people are poor self-evaluators, then the extent to which individuals have the capacity to identify and then market their skills must be called into question.

Furthermore, although career self-management may be suited to younger, or well educated, or highly motivated, or highly skilled individuals working in areas of skills or labour shortages, it is not a model that is applicable to all, particularly those with poor to average skills or education, or those who want security over independence (Currie et al., 2006). A number of studies (e.g. Peel and Inkson, 2004; Mallon and Walton, 2005) have found that individuals are often slow to initiate self development activities, particularly in terms of the more generic skills associated with inter-organisational employability. They are more likely to accept organisationally initiated training (which offers some promise of career advancement) than to seek more abstract development which may or may not enhance their overall employability. Tamkin (1997) argues that, in fact, it is not intellectual capacity that hampers individuals from developing and maintaining employability, but cost and uncertainty. Personal development requires resources, and for many, such as low-income earners, this may be an investment that they need but do not have the financial capacity to achieve. At the same time, if individuals feel that they do not have the capacity to identify what employers will be looking for in the future they may decide that it is preferable to maintain the status quo. In particular, it seems that many self employed – the ones who most need to manage their own employability – often fail to do so because of resource costs (time and money) and the tendency to place developmental issues low on their list of priorities (Mallon, 1999).

Assumption 4. The organisation's role is to support employees by providing them with opportunities to enhance their own employability

Although employability is essentially regarded as the responsibility of the individual, it is also widely acknowledged that employers have a significant role to play (e.g. Romniuk and Snart, 2000; Baruch, 2001; O'Donoghue and Maguire, 2005). Many claim that the organisation's role in the employability equation is to ensure that their employees are developed in ways that will make them attractive to other employers so that in the event of job loss the individual can be confident of making the transition to alternative employment relatively easily (Inkson and Arthur, 2001; Van Buren, 2003).

There is some debate over the extent to which the “old” employment contract offered job security and employer paternalism. Some argue (e.g. Capelli, 1999a) that this model only came into existence in the twentieth century and more specifically after the Second World War as industry enjoyed a period of unprecedented growth. However, there is strong support for the argument that by the end of the twentieth century the employer-employee relationship had altered as organisations underwent massive change in response to environmental pressures (Rousseau, 1995; Herriot and Stickland, 1996). The twenty-first century employment relationship has become much more tenuous (Baruch, 2004a, b). Instead of long-term employment, organisations are now more likely to offer higher wages and opportunities for development in exchange for hard work and a short-term contract (Pascale, 1995; Iles et al., 1996). That is, the relationship is based on future employability rather than future employment security.

How this works out in practice is unclear. Do organisations see themselves as responsible for providing opportunities that will lead to self-development, or do they have different notions of the costs and benefits of maintaining employability? Again evidence to date suggests a gap between theory and practice. For example, one UK study of HR directors and managers found that companies were generally reluctant to offer training and development linked to strengthening individual employability, preferring instead to focus on company- or sector-specific training that would benefit their own needs (Baruch, 2001). Their reluctance was based on three main factors:

the cost of more generic long-term training was seen as too high in comparison to the benefits of meeting direct or short-term needs;
the belief that promoting future employability would be seen as an indication to employees that their jobs were at risk thus resulting in poor morale and lower job commitment; and
the fear that enhancing individual employability would lead to higher staff turnover.

Furthermore, if organisations were seeking to transfer much of the responsibility for managing employability to their employees, it would seem that they have not yet sold the message to employees or enabled the transition to greater independence. For example, a study by Mallon and Walton (2005) found that from the employee perspective there is still a tendency to expect that the organisation will provide what is needed for training and development and that it will be job- and organization-specific. Other studies (Baruch, 2004b; Carbery and Garavan, 2005) have found that managing employees for current employment and training for specific, focused needs rather than “long-term investment in human capital” would appear to be the preferred option for many organisations as well as their employees (Baruch, 2004b, p. 244). This is particularly the case if training and development are seen as increasing the likelihood that valued employees will leave the organisation as an outcome of the development process (Benson, 2003).

Assumption 5. Employability is an antecedent to employment

Employability (whether managed at a personal or organisational level) is seen as increasing the likelihood of employment success. For example, de Grip et al. (2004, p. 216) refer to employability as “all the individual characteristics that determine a worker's future position in a given labour market”. Having an appropriate mix of skills, experience and individual characteristics is seen as a precursor to gaining employment for the unemployed (Fugate et al., 2004) and maintaining employment for the currently employed (Berntson et al., 2006). In other words, employability is expected to lead to employment.

However, it would seem that employers and employees differ in their understanding as to what constitutes employability and how this relates to employment. Employees continue to see employability in terms of being able to find a suitable job and being able to move from organisation to organisation when necessary, or when desired. In other words, they are concerned with transitional employability. Employers, on the other hand, see employability in terms of filling gaps within the organisation by employing individuals who have the skills, knowledge and experience to meet current organisational needs and expectations. That is, employers want functional employability.

Both transitional and functional employability require that the individual is able to demonstrate appropriate skills, experience and personal competencies to match gaps within the labour market. But are there individuals with such developed generic skills that they can easily move between job opportunities in a relatively seamless fashion. Do individuals with high employability measures move between jobs without loss of income or periods of unemployment? Why do some seemingly employable people have such difficulty finding employment and why are organisations struggling to recruit skilled, experienced employees when at the same time many skilled experienced individuals are struggling to enter or remain in the labour market? Evidence to date has failed to show a clear and consistent relationship between employability and employment and thus it is difficult to know the extent to which this assumption is a true reflection of the job market. In fact, even proponents of the boundaryless and protean careers acknowledge that context has not been given adequate attention in the development of career theory, and that economic environment should be included as a critical variable in the study of individual career patterns (Briscoe and Hall, 2006).

Labour market success is typically defined in terms of two measures – having a job and earning a reasonable income (ACCIRT, 1999). Employability implies that both are achievable provided the individual has appropriate, marketable attributes. However, finding the right job, in the right place and at the right time, can be as much a function of the labour market as individual employability, and employment success is largely determined by the number of suitable vacancies in comparison to the number of similarly qualified and experienced job seekers in the market. Brown et al. (2003, p. 110) suggest that “at times of labour shortages the long-term unemployed become ‘employable’; when jobs are in short supply they become ‘unemployable’ because there is a ready supply of better qualified job seekers willing to take low-skilled, low-waged jobs”. Labour force data indicates that being employable is not a guarantee of becoming employed in the type of job desired and with the terms and conditions needed (McQuaid, 2006). For many, employment is less about employability than about the state of the labour market and their relative value within that market (McQuaid et al., 2005).

Furthermore, employment contracts are based on mutual exchange. Organisations need skills, knowledge and labour; individuals offer their skills, knowledge and labour in exchange for rewards. However, employment relationships are characterised by a mix of stated and un-stated expectations. For various reasons organisations do not always clearly communicate their expectations to current or prospective employees, leaving a gap between what the organisation wants or needs, and what individuals think the organisation wants or needs. Employment success means finding out what the organisation is saying it wants, as well as what the organisation is not saying, but really does want. For example, the recruitment and selection process is based on both an explicit job description and person specification as well as many un-stated criteria. Employment success is often as dependent on meeting these un-stated expectations as on a match with the written selection criteria.

Age is a good example. It is generally accepted that there is a negative correlation between age and employability based primarily on organisational attitudes and expectations with regard to older workers (Garavan and Coolahan, 1996; van der Heijden, 2002). Older workers often face discrimination due to stereotypes, such as their inability to adapt to new situations, or to learn new skills, or the tendency to take time off work due to poor health (Greller and Stroh, 1995; Patrickson and Ranzijn, 2003). Despite a lack of research evidence to support these stereotypes, organisations continue to reject older applicants purely on age but when questioned will state other reasons (such as an inappropriate skills match) to justify their decision (Ranzijn et al., 2002). Older workers also face discrimination in relation to organisationally sponsored training and development (Hall and Mirvis, 1995). Although such activities may assist them in maintaining their employability, organisations tend to be reluctant to invest in the development of older workers on the expectation that it will not be a good return on their investment or in the belief that older workers lack the capacity to learn and adapt. Again, they are unlikely to openly admit their reluctance yet these un-stated expectations clearly impact the ongoing employment success of older workers.

While age is a contributing factor in an individual's career capital, age in itself should not determine whether an employable person finds employment. Yet, as Baruch (2001, p. 559) observes, “Older people, e.g. over the age of 50, know that even the best skills, experience and competencies would not supply them with ‘employability’”. By contrast, younger workers (Generations X and Y) are often seen as highly valuable and highly employable despite their lack of experience in comparison to more mature employees. Bogdanowicz and Bailey (2002, p. 128) refer to the new generation as “‘gold-collar workers’, educated, smart, creative, computer literate and equipped with portable skills” and thus very attractive to potential employers. Does this mean that age is more important than any other variable in determining employability? Not necessarily, but it does mean that the link between employability and employment is highly dependent on employer stereotypes and expectations, not just on individual employability.

Another often un-stated expectation is that organisations want to employ people with firm or industry specific knowledge and experience (Van Buren, 2003). Proponents of employability argue that individuals with a portfolio of transferable generic skills are highly valued by employers and thus will move easily from job to job or organisation to organisation (e.g. Fagiano, 1993; Ghoshal et al., 1999). In fact, “the essence of employability” (Baruch, 2001, p. 545) is that in exchange for loss of job security employers will support the development of generic skills that will make an individual attractive to future employers. Yet, as organisations move to a more flexible workforce it is evident that they are seeking to employ individuals who have both general and firm-specific skills. For example, job recruitment advertisements often state that they want people who can “hit the ground running”. Sparrow (1995, p. 174) suggests that even management skills, once thought of as being generic, are increasingly organization-specific. He argues that “different organization structures, growth paths and unique career paths have reinforced the development of organization-specific skills, which have in turn become a central source of differential and sustainable competitive advantage” (Sparrow, 1995, p. 174). As a consequence, the stated demand for skills, qualifications and competencies becomes less important than the un-stated expectation that the individual will have very specific experience that will obviate the need for training and will ensure immediate productive output.

Employers also state that they want people with the right skills, qualifications and experience, yet there is an increasing emphasis on recruiting to fit the organisation's culture and desired image (Mathews and Redman, 1996; Backhaus, 2003). Thus the selection process may focus on personal attributes such as loyalty, commitment, honesty and integrity, enthusiasm, reliability, personal presentation, common sense, positive self-esteem, sense of humour, balanced attitude to work and home life, ability to deal with pressure, motivation and adaptability (Australian Chamber of Commerce and Industry, 2002). These qualities are all highly subjective. For example, what type of humour is considered suitable and how does the employer determine if the person has the right sense of humour? To what extent do physical attributes (often labelled personal presentation) determine employment success? If the recruiter is seeking someone with the right “look”, then other qualities may become relatively unimportant. These personal attributes may be equally significant in determining which employees will be retained during periods of organisational change. Long-term employees with significant skills and experience may discover too late that they no longer have the right fit for the new culture unless the employer has clearly communicated the new expectations.

Stated versus un-stated expectations have particular implications for employability across external labour markets (Gunz et al., 2000). While current employees can tap into information networks to help determine what the organisation is looking for, external applicants may be hampered by lack of information or by superficial information telling them what the organisation says it wants, rather than what the organisation really wants or needs. On the other hand, sometimes organisations have an un-stated preference for employing people from the external labour market with the capacity to contribute new and innovative ideas. Thus it is evident that while employability may increase the likelihood of employment success it is not necessarily a guarantee of gaining suitable or desirable employment at an individual level.

Discussion

Employability has been portrayed by some as a relatively equal covenant between employer and employee, a covenant in which each party acts as a free agent within the flexible confines of the new boundaryless organisation (Gunz et al., 2000; Van Buren, 2003). From this perspective the twenty-first century employer is seen as offering opportunities for training, development and growth (Hind, 2005) while in response, the twenty-first century employee becomes “a rugged independent individual offering knowledge and skills through a series of transactions in the labour market” (Guest, 1998, p. 659).

However, the terms, conditions and outcomes of this new covenant are often ambiguous (Forrier and Sels, 2003), reflecting the uncertain nature of psychological contracts in contrast to the more explicit nature of covenants. An alternate perspective would suggest that this image is more ideal than actual, and that the assumptions underlying the concept of employability are not widely reflected at an individual or organisational level. Employability has not necessarily brought about greater independence for employees. Rather than an equal partnership freely entered into by both employer and employee, the new covenant retains many of the characteristics of the old employment relationship. Employers still retain the upper hand in the balance of power (Estienne, 1997; Legge, 2005). They decide who they will hire and fire, and when. They choose who will be offered long-term positions within the organisation and who will be offered short-term contracts. They determine what is needed and what is valuable in terms of training and development. At the same time, many employees continue to look to their employer for job security, career management, and opportunities for training and development (Sturges et al., 2003), expectations more in line with the old psychological contract than a new covenant.

In essence, the new employment relationship does not necessarily reflect greater independence for employees or a new balance of power, but does reflect a major transfer of risk (Jacoby, 1999; Mallon and Walton, 2005). Some argue that the push towards individual responsibility for employability has been driven primarily by employers in a bid to “shift the responsibility for jobs, training and careers onto the individual” while increasing organisational flexibility through the use of contract, casual and part-time employees (Brown et al., 2003, p. 114). In the process much of the risk in the employment relationship has also been transferred to the employee but “without counterbalancing benefits” (Van Buren, 2003, p. 139). While this viewpoint may be unnecessarily pessimistic it does highlight the fact that employability has not benefited all employees to the same extent. Individuals with highly marketable skills who are able to move relatively seamlessly from contract to contract may have achieved much greater independence, but there is little evidence that this has been the case for workers with limited skills, those who lack experience in the job market, or those whose individual characteristics make them less desirable in the labour market, for example older workers (Guest, 2004).

There is also some doubt regarding the extent to which new career forms are being widely adopted. Movement across jobs and organisations may have become more common (Jacoby, 1999; Ackah and Heaton, 2004) yet, rather than embracing boundaryless or protean careers it would seem that to a large extent “the traditional organisation, and with it the traditional career, is alive and well” (Guest and McKenzie-Davey, 1996, pp. 22-3). Within this context “people continue, stubbornly, to prize security and career advancement” (Cohen and Mallon, 1999, p. 336), an image in marked contrast to that of people seeking flexibility, independence and control of their own careers and employability. At this stage much more research is needed before it can be concluded that a new covenant reflecting new career forms has really become the norm for most employees.

Managing the transition to employability

Almost 20 years ago Handy (1989) argued that organisations had a responsibility to assist their employees in developing and maintaining their employability so that, should they no longer be required, they would still be attractive to other employers. It would appear that many organisations have struggled with this concept, just as much as many individuals have struggled with what it means to manage their own employability. Yet, since it is unlikely that we will see a return to a twentieth century style paternalistic employment relationship, how should employability be managed so that it leads to greater independence for employees, greater flexibility for employers, and a more generally employable workforce?

Employers can assist the transition to greater independence by clarifying and making explicit what they see as employer versus employee obligations regarding maintenance of employability under the current psychological contract. They should not merely assume that individuals have understood and embraced the terms and conditions of their altered contract, or that all parties to the contract share a common understanding of how it has changed. Rousseau (2001, p. 522) argues that, as mental models and schemas tend to change very slowly, “information that differs from a person's existing beliefs must be unambiguous to produce significant schema change”. In order to change a person's schema there must be clear, open communication about what individuals are expected to contribute to the employment contract and what they can expect to receive in return. In other words, the promises underlying the terms of exchange within the psychological contract must be expressed rather than implied (Rousseau, 2004). This is particularly the case for mature workers whose schemas were developed at a time when paternalism was the norm and long-term careers were considered highly desirable. Failure to spell out the changes may lead to a feeling of contract violation and a range of subsequent responses that will impact negatively on employee performance (Rousseau, 1995, p. 134).

Organisations will also need to find ways to communicate the mutual benefits of employability to their employees. There may be advantages in career self-management but it is unlikely that the majority of employees will enthusiastically embrace individual responsibility for employability unless they can see that the benefits outweigh the loss of job security, organisational career management and long-term careers. They will need to understand why employability is so critical, why they need to acknowledge that to a large extent it is their responsibility, and how it will benefit their future careers. At the same time employers will need to acknowledge their role and responsibilities in the employability equation. They will need to adopt an attitude towards employee development that reflect the new covenant and will need to ensure that they meet their obligations in providing opportunities for enhanced “employability security” as opposed to employment security (Moss Kanter, 1989, p. 321). Training and development are key variables in the psychological contract and when an organisation fails to meet employee expectations there may be significant feelings of contract breach (Robinson and Rousseau, 1994; Rousseau, 2004). To minimise feelings of breach, organisations will need to consider both the level and nature of training and development that they are willing to offer, and will need to ensure that employees know what they can expect to receive. Although the purpose and nature of training and development may now differ from what was offered in the past it will continue to be important in terms of maintaining employee commitment towards the organisation and levels of job satisfaction (McDowell and Fletcher, 2004).

Organisations would do well to assist their employees in developing a range of generic, transferable skills, such as interpersonal skills, communication skills, problem-solving, teamwork and decision-making skills. Whilst it is clear that in the selection process employers often focus on firm or industry specific skills and experience, they also place a high value on transferable, generic skills. If employers are to fulfil their responsibilities and obligations in this new employment relationship then they will need to provide assistance to their employees to develop both specific and transferable skills. There will also need to be a greater focus on assisting employees to develop competencies in self-evaluation and self-promotion. That is, individuals will need to learn how to evaluate their skills, knowledge and abilities, and then how to market those skills either within or outside of the organisation.

Employers who are willing to offer developmental opportunities to help employees come to an understanding of what it means to be employable will be winners in the labour market. They will become employers of choice rather than struggling to find and retain good staff. They will be helping to create a more employable workforce. At the same time, individuals who accept their role in managing employability will have far more choice in the labour market. They will know who they are, what they have to offer, and how to market their skills to prospective employers. They will be able to demonstrate initiative and maturity rather than an immature reliance on an employer. Ultimately employability should not be the responsibility of one party to the employment relationship but a shared responsibility that brings long-term benefits to both parties.

References

ACCIRT (1999), Australia at Work. Just Managing?, Prentice-Hall, Sydney, .