An eruption is happening in the way we work. It isn’t a sudden eruption – it has been happening under the surface, for years. The plates have been shifting slowly for the last few decades. The plates of employee dissatisfaction, of long working hours, the erosion of unions, and the rising gap between employees and the elite upper echelons, the plates of work life balance, of changing priorities, of remote working tools, the plate of wanting to” be my own boss”, and the plates of job stability and aging populations.
And now dissatisfaction with being an employee has been fueled further by the options presented by the pandemic – of flexibility and remote work. Covid 19 is the fault line along which this eruption is taking place. People got used to working remotely and experienced the freedom flexible work has to offer.
They experienced the removal of office politics, the end of the long soul-destroying commute and the removal of time-consuming meetings from their daily lives. People realized that they want to work less, not more. On work that gives them more meaning, on projects that give them more autonomy, on work that gives them more control over their lives.
A sign that a big change is coming is that the data regarding jobs is going haywire. The data doesn’t make sense (at least to me). Tech companies are firing 10% of their employees, but yet, the same companies are still on a hiring spree. There is a recession coming, and yet there is “the great resignation” – people are resigning from their jobs on mass. Inflation is high, but unemployment is low and there are now two jobs open for every job seeker in the US. The data is clashing. This mayhem suggests an eruption in the way we work.
More and more people are becoming independent, because becoming independent addresses many of the grievances of modern-day employment. One of the biggest advantages to being an employee has always been job stability, but now surveys are showing that people feel more confident in job stability when they are independent.
Also, the pandemic validated the “seize the day” mentality of the younger generation, now making up a majority of the workforce. Sacrifices that we were willing to make as young associates at law firms, no longer seem worthwhile, and work-life balance is not just a nice to have, but a must-have. It’s a pre-requisite for interviewing for a job.
Companies are unable to find sufficient staff – from airports to restaurants to law firms. In response, companies and law firms alike are already changing their talent model, by adopting a hybrid of permanent staff and contract workers and by adjusting conditions for employees. The Thompson Reuters Report “Alternative Legal Service Providers 2021” reveals that 79% of Law Firms are using ALSPs. Although numbers are not yet published, I predict the percentage to be higher for 2022.
This is validation that Law Firms are largely taping into the world of contract lawyers to fill in for staffing gaps that they have. This hybrid is true across industries. Law Firms are also changing their approach to employment – some of them allow for unlimited leave, remote work and signing-on bonuses. On the other hand, many companies and law firms alike have reacted to this change by hanging on to the past.
For example, Elon Musk has demanded that Tesla employees must spend 40 hours a week in the office or resign. He has been quoted as saying “They should pretend to work somewhere else.” There is pushback to the change in the way we work. Companies that are pushing back, and still remaining attractive to employees, however, will have to overcompensate in other ways, such as with good old-fashioned high salaries. I doubt, however, that this will be enough to stop the change.
The contractor model still has its problems, and many companies undoubtedly take advantage of the saving they make on employer/ employee benefits. Well-known court rulings are trying to protect independent workers from being “used” by large corporates.
More legislation has to come in to protect contractors. Independent workers need to be held liable for paying their own pensions so that they are forced to factor this into their pricing. Real employees should not be contractors and the rigid tests to differentiate between the two should be upheld.
But the law also needs to recognize the psychological and genuine value of independence, and of very simply put – not having a boss. The law needs to recognize that the old employment model doesn’t work for everyone and that sometimes, being an employee is just not worth it. With burn out rates on the rise, and lawyers hemorrhaging from law firms, the value of independence goes beyond economic upside.
Employers need to wake up to the fact that they are no longer competing with their competitors for talent – they are competing with the very real, and very attractive option that a worker has of being independent. This is competition far fiercer than what they have faced in the past. In order to win this competition, they are going to need to make sacrifices and changes that will hurt. Employers for example are offering employees the four day work week (and I mean four days from home). Employers are hiring Chief Wellness Officers to take care of the non-quantifiable needs of employees.
Mental health is being taken seriously (and it’s about time). Law Firms need to move fast and creatively in order to retain talent. Employers should start to realize that the future of work looks like a combination of freelancers and employees and that freelancers can be a permanent and stable part of their work force too. Relying on freelancers should be built into their business model. Law Firms and legal departments that don’t tap into this growing pool of talent will be at a disadvantaged, and will be left behind in the battle for talent.
This was originally published in Legal Business World.