The Pandemic Job Market, Part Two: From Pandemonium to Institutional Recalibration
The second part of our analysis of complexities of staffing in a post-pandemic job market in the data privacy, cybersecurity, and e-discovery/legal technology verticals covers all the hiring trends in Q3 2021 as well as what is coming in Q4 and beyond.
There is nothing normal about any return-to-office plan. For most, if not all, a return to office means vaccine and mask mandates, regular COVID testing, personal risk versus professional ambition calculations, and/or commuter rituals and requirements shifting weekly in a hybrid model. These factors have led to an alarming amount of attrition and an ensuing frenzy of hiring this year for every corporation, law firm, software company, or service provider in the legal space. The result is a slow, arduous hiring process in the legal industry created by the refusal of some employers, namely law firms, to accept new realities related to the future of work and the motivations of talent in the industry today. Conversely, other employers have turned strife into opportunity and have begun to recalibrate their institutional policies, processes, technologies, and permissions to attract and retain workers.
Part One of The Pandemic Job Market: From Drought to Pandemonium
Part One broadly outlined the complexities of staffing in a post-pandemic job market in the data privacy, cybersecurity, and e-discovery/ legal technology verticals. Highlighted by a complete alteration of the space and time related to office work, executive access, and the interview process, with an emphasis now on speed of hire, compensation inflation, and coping with voluminous talent exodus as a mission-critical reality, this subsequent analysis covers all the hiring trends in Q3 2021 as well as what is coming in Q4 and beyond.
The September Jobs Report
The September U.S. Bureau of Labor Statistics monthly jobs report sets the tone for the issues all hiring managers and job seekers will face in the fourth quarter. Only 194,000 jobs were added in September, down from 366,000 in August and the lowest amount since January 2021. However, job openings were still at a record high, with employers across the board reporting having a hard time filling positions. There is a fundamental disconnect between open jobs and the labor force in every sector, and data privacy, cybersecurity, and legal technology are no exception.
The number one motivation for job seekers in e-discovery and data privacy is unequivocally the freedom to work remotely from home all the time. This has been the number one motivator for e-discovery candidates since 2018 (that’s right — not compensation increase or vertical mobility) and quickly became the number one motivator for privacy professionals looking to switch roles in 2020 and again in 2021. The proportion of job seekers with this primary motivator, however, has increased aggressively since March of this year when companies began to socialize and then execute a return-to-office strategy. Think of the hiring process and talent pipeline as an artery: a company pushes out job requisitions from the heart and aims to get return resume flow from veins by posting jobs, engaging recruiters, hosting job fairs, leveraging LinkedIn, etc. When the company starts building that pipeline with a full return to office five days a week with vaccine and mask mandates, the artery starts from a nearly clogged position. In a recent unscientific poll conducted by TRU surveying over 1,600 passive and active job seekers, 26% of respondents indicated they would leave their current position or simply not work if forced to vaccinate as a condition of employment. Fifteen percent of those individuals intended to avoid vaccination requirements by looking for fully remote work.
As of June 2021, one out of every three job orders received by TRU that began as 100% in office have since compromised their hiring terms to either include hybrid or fully remote employment options. None have compromised their vaccine requirement for being in office. What employers are willing to compromise is what is driving healthy resume flow and a pumping artery of new talent.
What Employers and Job Seekers Will Compromise
The most frequently used workaround for employers that are holding the line that all full-time direct hires be in the office is to engage and hire contract employees instead. Why? For whatever reason, organizations, specifically law firms and large corporations, can get permission and headcount approval to hire a remote contractor anywhere but cannot get that same permission when the new hire is a full-time employee of the company/firm. For job seekers with the risk appetite for such an arrangement, particularly in e-discovery and data privacy, this approach can often be wildly lucrative — much more so than taking a full-time position, as employers are increasingly pushing back on job seekers with what they view as inflated salary expectations when coupled with work-from-home permissions.
The next most likely compromise has been downshifting from 100% in office to a hybrid model. Unfortunately, this adjustment has proven to be generally ineffective in convincing candidates who are seeking fully remote work-from-home (WFH) opportunities to consider hybrid roles. The candidate perception is that the employer is simply making the compromise as a band-aid to attract talent and that ultimately over time, as the pandemic threat wanes, the organization will revert to a 100% in-office culture.
From there, employers are moving to fully remote models that still require in-office attendance on an as needed basis — the artery opens to once a month in-office, then once a quarter, sometimes twice a year. Even in this compromise, employers generally want job seekers in a U.S. state (or EU country) where they already have offices so that new tax registration (something avoided by using third-party contractors) is not a requirement to hire. Ultimately, this is the strategy 33% of new customers adopt if they genuinely want to fill a position in the timeframe of the new post-pandemic normal for talent acquisition. These employers are well-served by differentiating between a hybrid mandate — specific requirements for when an employee needs to be in office — and a hybrid opportunity — the opportunity to go into an office when the employee desires or for occasional quarterly meetings. This is a critical distinction in selling a candidate who wants to work remotely; otherwise, expect to lose their interest immediately.
Timelines to Hire
The number one trend TRU predicted in January’s “Top 10 Job Market Predictions in Legal Technology” is becoming prominent to the point of hyperbole: Speed Wins War for Talent. In ESI, vendor hiring cycles have dramatically shortened. Consistent since the publication of Part One of this article, the average time from resume submission to offer extended for mid-market talent such as project managers and analysts has shrunk to a lightning fast eight business days. Cycles for the same positions at law firms are moving the other direction, now taking upwards of six to 10 weeks. The reason for this is clear: in January, law firms were 90% fully work-from-home; that stat dropped precipitously by September. According to Kastle’s back-to-work barometer, which analyzes data from their key fob systems, the legal industry is the most aggressive vertical in America when it comes to forcing a return to office. National occupancy for law firms is currently at 63.9% compared to the average occupancy for all industries of 36.9%.
Simply put, most law firms are expecting staff employees to be in office some or all the time. Law firms appear to have no problem throwing a little more money at talent to tip the scale and often offer additional perks like paid overtime to attract mid-level talent, but job seekers are largely more interested in remote WFH flexibility than they are that extra $10K–$15K in earning potential if it means commuting in five days a week or even maybe commuting five days in the next year and beyond since policies remain open to change at any time. That uncertainty is stopping them from accepting and/or exploring jobs more frequently than most law firm hiring managers are aware of or want to believe. Expect to see law firms leaning on contract talent that can operate outside the in office and vaccine mandates to bridge the gap while they continue to hunt, make offers, and cope with repeat declines.
In data privacy, the timelines are not much different; however, most of the jobs in privacy are at corporations, not law firms. And don’t forget, job seekers in all these disciplines are typically entertaining multiple offers. In Q3 2021, 85% of candidates who received job offers through TRU had multiple offers they were considering; 65% of those same candidates also received counteroffers from their current employers. These percentages also indicate that the market is focused almost entirely on hiring experienced talent, not individuals who are new to the industry.
Currently, roughly 80% of jobs in ESI are at law firms and vendors, while 80% of jobs in privacy are at corporations. If you are trying to break into ESI and cannot be billable quickly, it is difficult to make a case for a new entrée to the industry, alleviating the pain most organizations are feeling from being understaffed or needing individual employee profitability. ESI is also mostly about litigation, which means customers are generally in a state of reactionary discomfort and expect experienced talent from their law firms and vendors. In general, ESI hiring managers do not want to take the time to train and groom new hires right now. Hal Brooks, CEO of HaystackID, was recently quoted in Cybersecurity Law & Strategy’s ALM sibling Legaltech News as saying: “We definitely want five-plus years of experience, preferably from the service provider standpoint.” (See “Inexperienced Attorneys Can Absolutely Get E-Discovery Jobs, But First They Need E-Discovery Experience,” LTN Oct. 27, 2021.
Privacy, however, tends to focus entry-level resources, lawyers and non-lawyers on tasks that are more institutional (though there are exceptions, like breach). Though most of the data privacy job market now calls for talent with two to five years’ experience, Privacy Program Managers are also much more willing to train ambitious and self-invested up-and-comers as compared to ESI leaders. Most corporate privacy pros are not billable — obviously. Over the next six months, as demand of privacy programs intensifies in corporations, entry-level legal technology talent will see increased opportunities to break in, especially if they have achieved IAPP certifications like the CIPP-US and the CIPM when availability of experienced talent dries up.
The one area of talent that has almost zero chance of getting a job in either space without demonstrable experience is Sales.
In 2020, TRU placed fewer business development professionals and received the least inbound interest in representation from e-discovery sales talent since 2010. 2020 also marked a historically low number of companies seeking to hire new sales talent. This is no longer the case. With the increase in recent acquisition activity, the rapid rise of software provider growth, and the resurgence of a strong, growing boutique service provider marketplace, revenue generators are not only in high demand again — they are finally considering other opportunities. Q4 will usher in a surge of sales movement in the marketplace, with new logos looking to get their names on billboards by hiring marquee sales talent and industry staples throwing the kitchen sink at top talent. If you have not sold ESI before, it is highly unlikely any known logo will show interest in ramping you up.
Women in the Workforce
In addition to the September jobs report painting a bleak picture of growth in hiring, it also points to a huge issue around the proportional hiring of women in the workforce. In September alone, 309,000 women dropped out of the workforce compared to 182,000 men joining. The unemployment rate for men (4.7%) is still higher than the rate for women (4.2%), but these stats do not take into consideration women dropping out altogether. With schools reopening, added childcare costs, or the time, effort, and energy required for safe transport and pickup from a parent during the pandemic have led many women to once again put their careers on hold to focus on family.
Additionally, as more women take responsibility for the needs of the household, their motivation for seeking employment elsewhere is largely around a desire and needed permission to work remotely from home. According to a recent MetLife report, 78% of women surveyed were motivated to seek work elsewhere for “increased flexibility.” As more companies force a return to office, they risk disproportionally hiring more men than women. This will put some cultural agendas for companies at a crossroads where the mission to bring gender equality to their human capital conflicts with their return to office policies. In the next three to six months, companies that are committed to gender diversity in their workforce will have to consider compromising on equality or pushing back on everyone coming back to the office.
The theme of this year is how fast can you hire and where will your employees have permission to work? The two are intertwined, and policy will define culture. The speed at which companies acquire talent is now forever changed. Never again will first-round interviews be in person, and for most companies, in-person interviews will be reserved for executives/upper management only and only at the final phase of the process. This means a faster process forevermore. While many law firms are clearly ready to play chicken with job seekers to see who blinks first when it comes to return-to-office mandates, the rubber will meet the road in Q4. Institutions that recalibrate their internal operations to meet the demands of experienced talent will be the ones who ultimately meet the demands of their customers and clients. There is no shortage of demand and no end in sight to the volume of jobs available.
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