The post-pandemic battle for talent
As someone at close proximity to the recruitment industry, with friends and acquaintances servicing different sectors, I’ve observed the return to the glory days of high fees and an abundance of roles. Whilst it has been great to see my friends reach new levels of success, more interesting for me has been the discovery behind it. Why are so many industries hiring at such an accelerated rate? The ‘great resignation’, a term you may now be familiar with goes someway to explain it – the pause in society allowed many to re-evaluate what they wanted from their careers and thus came a surge in resignations and job changes.
Digging further into this phenomenon, I found that certain industries doing seemingly well were in fact creating new bubbles and new challenges for themselves. The legal industry is particularly interesting, boasting record highs over the past year in Associate (new qualified solicitors) salaries. This trend indicates positive performance for law firms who surprisingly were aided by the pandemic. Reports have cited commercial and contractual uncertainties, new legislation and increased M&A activity (aided by record government stimulus) as all contributing factors in the increased demand for legal services, coupled with a dramatic drop off in client entertainment/travel expenditure. It can be argued however, that the age-old tactic of throwing money at the problem is perhaps at play here. Are law firms really shielded from the impact of the great resignation or are they in desperate need of new ideas to keep their best talent. The 2022 report on the state of the legal market by Thomson Reuters Institute suggests that in this new post-pandemic world, the value of money is depreciating and is no longer the effective tool it used to be. They state that the “loyalty lawyers feel to their firms and their willingness to work hard is not simply, or even primarily, driven by compensation”. They showed that the lowest turnover rates actually appeared in firms with the lowest growth in salaries, reinforcing the notion that cash in no longer king.
So what does this mean?
Factors such as how the company makes employees feel, how they recognise their contributions, how they invest in their personal development, how they support their mental wellbeing are top of the wish list. The millennial Trainees of years ago are now the Senior Associates on the partner track. The Trainees and Associates of today are the Gen Z population that on average stay in an organisation for less than 3 years. A new approach is clearly needed.
What is the solution?
Before I share some of the key considerations, it’s useful to reference an interesting allegory they share in the report. The story of Christopher Wren’s rebuild of St Paul’s Cathedral in the 1600s.
The insert reads: “as the project got underway, Wren, who was not personally known by many of the workers, stopped and asked three workers who were all engaged in the same task what they were doing. He received three very different answers. The first said, “I am cutting this stone.” The second answered, “I am earning three shillings, six pence per day.” The third man straightened up, squared his shoulders, and still holding his mallet and chisel, replied, “I am helping Sir Christopher Wren build this great cathedral.”
In his short visit, Wren received three different answers and three very different motivations. For one worker, it was just a job. For another, it was just about the money. But, for the third, it was about pride in participating in something important, something bigger than himself.”
This story provides a useful lesson for business leaders and decision makers in understanding the value of intrinsic motivators and how this is directly linked to engagement and performance. What drives one employee will be different to that of another, so the engagement strategy employed really should seek to understand employees on an individual level.
What can you do as an employer?
Seek to understand employees’ intrinsic motivators – this extends further than a company engagement survey (where many aren’t honest). Focus on target groups e.g. Associates or Partners and do a deep dive with the support of an external consultancy
Explore ways to support the mental wellbeing of employees – how can you help to build their emotional resilience? Do you understand the challenges experienced by different employee groups? Are your company policies designed with wellbeing in mind?
Consider new ways of investing in the personal development of employees – are career coaching services available and if so, does the diversity of coaches reflect the employee base? Are there any innovative learning experiences available? Can you offer bespoke ‘one size fits one’ options
The battle for talent is very much ongoing across many industries, however there are lessons to be learned from what we are seeing in the legal industry and the bubble being created by exorbitant salaries. The term innovation doesn't just apply to making products, it also extends to how an employer engages with it's employees. As a result there is a real opportunity here for employers to create new pathways to success outside of just providing financial incentives as unfortunately that will no longer work.