THE BLOG
07/23/2014 04:48 pm ET Updated Sep 22, 2014

Why We Need a New Alliance Between Workers and Employers

"Identity, not ideology, is moving the world." So argued commentator Fareed Zakaria in a recent Washington Post column. Zakaria was referring to political identities, and the fading affiliations citizens have for traditional political groupings like parties, unions, or civic associations.

A parallel can be drawn here to the modern workforce. With an increasing volatile economy, individuals don't feel the same loyalty or attachment to their companies that they did in past decades - a rational response to an environment in which corporations have abandoned long-term commitments to their employees. With "at will" employment and frequent career changes now the norm, mistrust between employer and employee has grown.

"Thanks to this reciprocal self-deception, neither side trusts each other, and neither side profits as fully as it might from their relationship," says Reid Hoffman, the author of a new book The Alliance. The founder of online business networking site LinkedIn and author of The Start Up of You, Hoffman argues in his most recent book that the current state of affairs is here to stay.

In The Startup of You, published in 2012, Hoffman argued that all workers should think in terms of becoming their own independent "startup," rather than depending on the largesse of employers. In our professional careers, that is, we should develop entrepreneurial qualities such as adaptability, ongoing acquisition of new skills, and constant networking for opportunities to expand our careers.

Now, in his new book, he carries this idea forward by expanding on how the employee-employer relationship is broken - and how it might be repaired. A company that isn't loyal to its employees is one that doesn't think in the long term, and which doesn't value the most important asset there is: human capital. Thus, a cutthroat approach to employee management is ultimately counterproductive and uncompetitive in today's networked world.

"Employers continually lose valuable people," Hoffman writes. "While employees fail to fully invest in their current position because they are constantly scanning the marketplace for new opportunities."

The Alliance, co-authored with entrepreneurs Ben Casnocha and Chris Yeh, focuses on how to rebuild a healthy business ecology based on cooperation. "If we can't go back to the age of lifetime employment, and the status quo is untenable, then it's time to rebuild the employer-employee relationship," Hoffman explains. "The business world needs a new employment framework that facilitates mutual trust, mutual investment, and mutual benefit."

So how do we rebuild this broken alliance? Hoffman looks to Silicon Valley for the answer. The Valley "is the best place in the world for adaptation and innovation, as demonstrated by its economic growth over the past decade" - and there, companies have pioneered a new labor model defined by what he calls "tours of duty."

By "tour of duty," the authors of The Alliance mean a mutual, ethical commitment on the part of both employer and employee to the completion of a specific mission, rather than the current unspoken assumption that employment will continue indefinitely. By agreeing on the terms of a work project beforehand, much of the implicit mistrust is dissipated. Companies acknowledge that employees will almost certainly leave one day, and employees are free to be clear about their career objectives and maximize their contributions.

The book digs deep into numerous examples of the tour-of-duty concept, including examples from big as well as small companies, for-profits and nonprofits, and new as well as established firms. Still, the focus is largely on those who are already entrepreneurs, rather than the average worker in the mainstream labor force. Employees who would consider the tour-of-duty model are already risk takers, and, from a company's point of view, likely to be highly productive and thus worth such a deal. But this is not necessarily representative of the modern corporate world.

In several other areas, as well, The Alliance opens the door to a number of important questions. One has to do with one of the biggest challenges facing today's workforce: a lack of skills that not only lower workers' value but also make it difficult to move from one job to another as Hoffman advises. Labor market regulation, too, is an area left unexplored - what do tours of duty mean for local rules about part-time jobs, hiring and firing, and health insurance in which governments mandate certain standards?

Finally, a major question is how Hoffman's insights can translate from Silicon Valley, not just to the rest of the United States, but to up-and-coming emerging markets like Latin America. There, the need to foster entrepreneurship and innovation is central to economic development. Hopefully, his book can trigger a much needed conversation in offices and boardrooms from New York to Buenos Aires.