The new covenant of employability

Publication Date04 January 2008
AuthorMarilyn Clarke,Margaret Patrickson
SubjectHR & organizational behaviour
The new covenant of
Marilyn Clarke
School of Management, University of South Australia, Adelaide, Australia, and
Margaret Patrickson
International Graduate School of Business, University of South Australia,
Adelaide, Australia
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.
Keywords Employment,Psychological contracts, Careers,Career development
Paper type General review
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
The current issue and full text archive of this journal is available at
New covenant of
Received 12 December 2006
Revised 22 May 2007
Accepted 5 June 2007
Employee Relations
Vol. 30 No. 2, 2008
pp. 121-141
qEmerald Group Publishing Limited
DOI 10.1108/01425450810843320
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:
(1) 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
(2) 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 contra ct
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 ),

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