Way back in 19ahem …. as an undergraduate at the University of Galway, taking my B.Com. I was specialising in Human Resource Management, and I remember many of the lecturers talking about the “psychological contract” that appeared to exist (in the mind at least) of employers and employees. Think of it as an unwritten agreement between employer and employee built on mutual trust, loyalty, and long-term commitment. Employees would go the extra mile, put the company first, and in return, they expected job security, development opportunities, and fair treatment. It was never written down, but it was intertwined into the social fabric of the modern workplace.
Recently, however, I’ve been scrolling LinkedIn and come to the conclusion that the psychological contract as a concept is probably on life support, and the modern workplace has become a simple transactional relationship.
One after another, harrowing LinkedIn posts. A principal engineer who postponed holidays to oversee a cyber-incident fix, was thanked publicly by leadership in April, selected for redundancy by June. A Software Team leader who mentored half the graduate cohort, locked out of Slack before they could post a handover note. Greenhouse reviews echo the same story in longer form. Stories relaying palpable shock, anger, and exhaustion. The fact that HR has been fully compliant in the layoff process doesn’t soften the blow
How did this erosion of the psychological contract start? It’s open to debate, but in the 1980s, maximising shareholder value became all the rage. Employers were encouraged to prioritise quarterly earnings, cost-cutting, offshoring, etc., without much thought for long-term workforce engagement. The 2008 financial crisis and the mass tech layoffs of 2022–2023 only reinforced this priority. Loyalty and going above and beyond were no longer rewarded, and disposable talent became part of the corporate play deck.
The middle-management cull of 2022-2025 poured salt on the wound. I’m talking here about the various team leads/product managers that provided human context. They acted as a vital buffer that translated C-suite vision into everyday reality while shielding frontline teams from boardroom turbulence. They knew who was looking after a sick parent, who was angling for a shot at the new DevOps position, who still hadn’t taken holidays since the last release. Once the custodians of company culture and employee development, mid-level managers have been steadily eliminated in cost-cutting drives. Without them, workers often lack mentorship, advocacy, or clear progression paths. This further reinforces the sense that your extra effort yields no long-term gain.
At the same time, the rise of gig work, zero-hours contracts, and the erosion of traditional career ladders have taught a new generation of workers to treat employment as a transactional relationship. In essence, a swap of labour for pay, with little emotional investment. According to research by Deloitte, only 23% of Gen Z employees expect to stay in their current job for no more than five years, and nearly 50% say they would leave for better work-life balance or flexibility.
When letting people go, legally, most Irish tech employers are doing everything right. Redundancy processes follow the letter of the law, i.e. a 30-day collective consultation where required, unbiased selection criteria, and statutory payments of two weeks’ salary per year of service. The whole process is carefully documented with all the correct forms. Yet the experience feels brutally transactional because it is now executed in bulk, almost programmatically. Employees receive an Outlook invite titled “Business Update”. Soon after, their laptop is a paperweight, and their gardening leave has started. The statutory cheque arrives, and the spirit of reciprocity receives its final fatal blow.
What companies miss, hidden behind flawless redundancy compliance, is the slow erosion of discretionary effort. When loyalty isn’t reciprocated, 17:00 becomes a hard stop. The hack-day ideas stay in the notebook, and the best mentors quietly update their CVS or update their LinkedIn with “Open to work”. Productivity metrics may hold steady for a quarter or two, but innovation, which is hugely dependent on psychological safety, flatlines. Knowledge walks out the door along with the people who cultivate it.
Of course, another outcome is the term I have been hearing a lot about recently called “quiet quitting.” Anyone from a unionised background would know this as a work to rule or doing only what the job requires. No more, no less and certainly not over and above! One study by Gallup estimated that 73% of the workforce were either disengaged or worse, actively disengaged. They estimated that this was costing the global economy 8.8 trillion annually.
I’m not entirely sure what the solution to this issue would look like, but I believe there are a few practical things that Organisations can look to implement if they want to succeed in the long term.
In order to rebuild engagement and restore the battered psychological contract in IT teams, companies could start by formalising stewardship. Set aside perhaps one day a week to allow the appropriate leaders to coach colleagues and guide their growth, well-being, and collective success. The guiding principle here is that the team are people, entrusted to you for the long term, and not resources to be used for short-term results. This could be easily implemented without recreating layers of middle management.
Leaders need to become more transparent. Host regular meetings that outline runway, pipeline risks, triggers that may require hiring freezes or worse. Stop the rumour mill and share bad news in real time so employees can plan around these issues.
Anyone who studied marketing might remember the term tangibilising the intangible. If a project requires weekend work, late nights, and early mornings, then record the transaction (make it tangible) in the HR system and reward appropriately. Reciprocity shouldn’t depend on ad-hoc side deals or a nod and a wink. Fading memories of extra effort should not be allowed to erode goodwill.
Another HR term I studied as an undergraduate was the idea of job enrichment. This is the concept of letting employees work for a time on new projects or tasks outside their contractual field. Sadly, it is something I haven’t seen discussed recently on any forum. Think of it as reflecting the gig economy within your workplace. Allow people, if they so wish, to spend, say 10% of their time on another product or tech stack. Believe me, as a recruitment professional, it is cheaper than replacing them when they leave to scratch that itch elsewhere.
Finally, don’t leave the exit interview as a form-filling exercise that gets filed and lost in SharePoint. Aggregate the themes, utilise the rich data and publish it. How about a “we heard and we acted summary.” Nothing rebuilds trust and commitment faster than fixing the things that people complain about.
None of these ideas clash with the redundancy law. I hope that they might fill the human vacuum that the law cannot legislate for.
The psychological contract was never about statutory entitlements. It was about the belief that sacrifice would be met with more than a payout. If tech employers want the early-morning problem-solvers and late-night bug-hunters to keep choosing them, they have to meet that belief halfway again. Otherwise, tomorrow’s LinkedIn feed will look a lot like today’s, and the most talented engineers will treat every job offer as a short-term Airbnb rental, bags half-packed at the door.