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Leadership and the Skills Shortage

Rousseau describes the psychological contract as the individual's belief that employees and employers make binding promises with reciprocal obligations.


Warhurst and Thompson (link) distinguish between low skilled, poorly paid ‘Mcjobs’ and well rewarded, knowledge-intensive ‘iMacjobs’.


Skills shortages in a knowledge-intensive world like IT are common and they can impact the psychological contract.


Bankins analysed the labour market’s ‘war for talent’ to provide clues how psychological contract changes could help attract and retain staff. Stasch examined the shortage of engineers in South Africa and identified the true drivers of engagement. Engineers were engaged in their work but loyal to the task at hand but not to the organisation. They were constantly seeking education and new experience that would improve their marketability. Paradoxically, they were largely satisfied with their earnings. He concluded that to improve engineer retention, companies should ensure that their work is diversified to keep engineers constantly challenged. Intrinsic work factors allowing more autonomy over their work is desirable. Employees crave an engaging culture and relations with peers that encourage learning.


Ronnie found that the psychological contract created expectations on leadership. Younger employees wanted leadership that they could respect and learn from whilst also supporting and understanding them.


The impact of a skills shortage on the psychological contract is particularly relevant to the IT sector. There is a critical, global shortage of skilled IT/tech developers. Whilst developers want to be well paid, the psychological contract they desire requires exposure to new technologies and challenging projects. They do not desire to work within their comfort zone.


While pay is undoubtedly important, it is vital that tech jobs offer challenges and the ability to grow skills and knowledge.


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