Positioning your firm to navigate labour market challenges

[Australasian Law Management Journal,General Management,People Management(HR),Strategy & Leadership] July 11, 2022

Law firms will need to be clearer about the value proposition they offer in the next 12 months as a shrinking pool of talent makes it harder to retain and recruit standout candidates, writes Leonie Green.

The ALPMA Australian Legal Industry 2022 HR Issues and Salary Survey is now out and it provides some pause for thought for all law firms.

The data this year is particularly helpful as we all look to navigate the challenge of a very tight labour market, combined with demands from employees and candidates that connect to pandemic-related changes in expectations and aspirations.

Perhaps unsurprisingly, flexible work, including working-from-home arrangements, have become standard, with 93% of participating firms indicating that they will continue to enable working from home in 2022 (albeit to varying levels). Interestingly, and likely connected to increased flexibilities, additional annual leave is up – with 43% of participating forms offering additional annual leave (up from 34% in 2021).

On the wages front, the legal industry has had wages growth above the national average, with an average increase across all positions within participating firms of 5.1%.

Turnover has increased after a low turnover rate of 13% in the previous year (related to the pandemic and an uncertain environment). The figure is back up to 21%. Confidence in the industry in terms of growth is strong, with 64% of responding firms expecting to grow staff numbers in 2022.

Tight market for talent

So, we have higher wage growth (albeit the average is in line with the current annual CPI), low unemployment, but a bit more movement of staff through turnover, and firms looking to grow staff numbers within a small and arguably shrinking pool of talent.

It is a common story across many industries right now – not enough people. So, the focus needs to be on not only retaining the talent you have, but in standing out in the market for the few candidates in the market that you want to attract. This theme is picked up several times in the report.

One very practical piece of advice, provided by ‘legal people’ in the ALPMA HR Survey, is to have a one-pager about your firm’s values and employee benefits – the firm’s value proposition to prospective employees. I would add that it is vital that the value proposition is backed up in reality (it’s what your staff say when you’re not there) and is evidenced and aligned with your social media footprint (as candidates do their research).

The one-pager value proposition is an exercise worth taking seriously as a real investigation and consideration in what differentiates you in the market, and how you can make the most of that to attract and retain talent.

Connected to this, and as noted by Trish Carroll in the ALMJ January edition, there is a real shift in what candidates are seeking. In particular, candidates are looking for a values alignment between what’s most important to them, and what the firm stands for, promotes, or celebrates. This was a theme also picked up by ‘legal people’ in the ALPMA HR Survey, as they have seen this shift first hand when recruiting for firm. They noted:

“Candidates are being much more discerning and asking a lot of questions about a role and the organisation. There has been a real shift to legal industry job-seekers looking to attain a values and cultural alignment out of a new role.”

It’s important to be on the front foot on this and do the work ahead of pressing go on recruitment.

It’s also important to ensure that your value proposition and firm values are clearly aligned to your overarching firm strategy. They should be part and parcel of your people strategy, rather than a stand-alone, market-driven blip that may not stand the test of time; you otherwise risk adopting or promoting an entitlement or value that doesn’t serve your firm in the longer term or when the market shifts again (as, of course, it will). So, think long-term, not just short-term fixes, and tap into your current staff to get a clear understanding of what they value most, and what they see as the key values of the firm.

Finally, if you did not participate in the ALPMA HR Survey this year, please consider contributing to the next survey – it is a highly valuable source of data and is, of course, improved by every additional firm that participates.

Leonie Green is the co-founder and director of the Corvus Group, a workplace and legal advisory firm. She has more than 20 years of senior legal and HR experience working in Australian and international companies. Leonie practised as an employment and industrial relations lawyer for a number of years prior to moving into management roles in industrial relations, shared services and human resources. She can be contacted via email at leonie@corvusga.com.au.

*  The report is available for purchase or free download for participating firms.