Higher Wages. To lure prospective employees and retain their current employees in this hot labor market, employers are offering higher wages. Until the worker shortage is resolved, pay will continue to increase and employers will continue to offer enticements like signing bonuses, retention bonuses, private offices, and hybrid or fully remote working arrangements.
When it comes to designing the future of work, one size fits none. Discovering success isn’t about a hybrid model or offering remote work options. Individuals and organizations are looking for more freedom. The freedom to choose the work model that makes the most sense. The freedom to choose their own values. And the freedom to pursue what matters most. We reached out to successful leaders and thought leaders across all industries to glean their insights and predictions about how to create a future that works.
As a part of our interview series called “How Employers and Employees are Reworking Work Together,” we had the pleasure to interview Scott Nelson.
Scott Nelson is an employment attorney and a partner with Hunton Andrews Kurth LLP in Houston, Texas. He and his firm advise many of America’s top companies on their employee and employment law issues. You can find more information about Scott at https://www.huntonak.com/en/people/scott-nelson.html.
Thank you for making time to visit with us about the topic of our time. Our readers would like to get to know you a bit better. Can you please tell us about one or two life experiences that most shaped who you are today.
First, let me say thank you so much for having me, Karen. I’m excited to talk with you about this important topic that is changing the way we all live and work.
The one life experience that has most shaped who I am today is having a family. I have a wonderful wife and four tremendous kids, two girls and two boys between three and ten years old. While I certainly enjoy my career, they are my joy. Having a family has changed my perspective on life. Nothing gives you more faith, love, and hope for the future than having a wonderful family.
Having a family also gave me perspective during the major life-altering experience we all shared over the last two years, the COVID-19 pandemic. Indeed, the pandemic is the driving force behind many of the changes we will be discussing today.
Let’s zoom out. What do you predict will be the same about work, the workforce and the workplace 10–15 years from now? What do you predict will be different?
Working from home, to a greater or lesser extent, is still going to be with us 10 to 15 years from now. Similar to the way September 11 fundamentally changed the way we go through airport security, the pandemic and the work from home phenomenon that it spawned have fundamentally changed the way we work.
Flexibility will be the key to the new workplace. From remote work, to hybrid working arrangements where employees spend certain days in the office and others working from home, to non-traditional weekly work schedules, flexibility is the new expectation. Employees got a more than a taste of it during the pandemic, it became a habit. Now, they do not want to give it up. And employers that want to attract and retain talent will want to continue to offer it where possible and appropriate.
If there is anything the last two years have taught us, it’s that the world is unpredictable. Perhaps one of the best lessons that employers and employees can take from the COVID-19 era is that flexibility and the ability to pivot are key. But I think one constant about work and the workforce will continue into the future — talent and hustle will continue to be rewarded.
What advice would you offer to employers who want to future-proof their organizations?
Employers need to really listen to their employees. In the wake of the pandemic and The Great Resignation, in which millions of workers have quit their jobs or retired, employees’ expectations and bargaining power have changed considerably.
As of December 31, 2021, there were 10.9 million job openings in the U.S., but only 6.3 million unemployed people looking for work. This imbalance in the labor market, a tremendous labor shortage, has sparked a serious run on talent, much like a run on a bank. It’s an employee’s market right now. And employees became very introspective during the pandemic, thinking about what they really want to do with their lives and their work. All of this mixed with the flexibility and uncertainty they have experienced over the last two years has created compelling conditions for change.
Smart employers don’t want that “change” to mean their employees are leaving or being poached in droves. Accordingly, they are really taking the time to evaluate their workplaces at the strategic level, seeking employee input, and doing the best they can to make their workplaces and careers attractive and rewarding for employees.
For example, many employers have been considering whether the permanent remote working or hybrid working arrangements so many talented employees desire may work for their business. There is no one-size-fits-all answer to this question. Every business is different. Every job is different. Every employee is different. Every industry is different. Many jobs simply must be done in person and cannot be done remotely. But executives who want to future-proof their organizations will want to give serious thought to these issues, seek employee input, and come up with answers that make the most sense for each of their individual organizations.
What do you predict will be the biggest gaps between what employers are willing to offer and what employees expect as we move forward? And what strategies would you offer about how to reconcile those gaps?
As I alluded earlier, employees tend to hold good hands of cards right now. As The Great Resignation’s unprecedented labor shortage drags on, more and more savvy employers are seeing recruiting as a means to obtain a competitive advantage. Indeed, in a tight labor market, if you can hire away your competitors’ talent, you can provide more products or services to customers, while your competitors will have a harder time doing so. Hence, we are experiencing the run on talent that I mentioned.
The imbalance in the labor force, and the resulting run on talent, have skewed bargaining power in favor of workers. A significant number of workers in a surprising variety of positions are now being treated a bit like professional athletes, with employers and prospective employers offering them higher wages, signing bonuses, retention bonuses, flexible working arrangements, and other perks. In just the month of November 2021 alone, employees who stayed with their jobs saw their wages rise 3.2% on average, but employees who switched jobs reaped a 4.3% average increase that month.
Nevertheless, it’s not just about the money. A good strategy for employers seeking to “reconcile the gaps” and attract and retain talent, is to make sure they listening to current and prospective employees and offering what they really want. For many, flexibility is more important than money or shiny perks right now.
We simultaneously joined a global experiment together last year called “Working From Home.” How will this experience influence the future of work?
Working from home is, where possible, going to be a significant part of the future of work. For those positions in which working from home has been possible, employers have, in the vast majority of instances, found working from home to be effective and efficient. While the pandemic initially forced employees to work from home, most of them, not all but most, have grown to love it. They have gotten used to it during the lengthy pandemic. Now, in this employee-friendly labor market, they are demanding it for the long term.
Almost no one enjoys commuting. The work from home phenomenon has made employees realize that they do not necessarily need to waste considerable time, gas, and mental energy slogging through traffic.
There are numerous additional reasons why people want to work from home. Some want to be home with their families. During the pandemic, many have had to work from home so that they could take care of their kids while schools were requiring remote-only learning. If their job did not allow them to do that, this put pressure on them to quit their job and find another job that would allow them to work from home. Others simply want the flexibility to be able to live wherever they want, as opposed to close to work, and working from home allows them to do that.
But not everyone is going to work from home in the future. For many jobs and industries, working from home is either not possible or not practical. Additionally, there are still considerable benefits, both to employees and employers, to working together at a place of business.
Collaboration is much easier in person. Synergies are easier to achieve in person. Particularly important for younger and newer employees, training, mentoring, and networking opportunities are more readily available when working with colleagues in person. The more frequent and direct social interaction of in-person work also makes it easier to develop camaraderie with co-workers. This is the glue that keeps employees at companies. If employees like the people with whom they work, they are much more likely to stay. This is critically important to businesses that want to attract and retain talent in our current tight labor market. Changing jobs is often much easier if someone only works from home because there is less connection to co-workers and the only office “move” is for them to sit in the same chair and log in to a different employer’s system.
We’ve all read the headlines about how the pandemic reshaped the workforce. What societal changes do you foresee as necessary to support a future of work that works for everyone?
Even after reading the headlines, many do not realize how the unprecedented labor shortage resulting from the pandemic and The Great Resignation is detrimentally affecting our day-to-day lives. Things are not getting done and there are product shortages and price increases because of this. While there are and have been many contributing factors to the inflation, bare store shelves, and supply chain issues we have been experiencing, the multi-million-worker labor shortage has certainly contributed to the supply chain issues and product shortages that have plagued many industries, as well as some of the wage and price inflation we are seeing.
Inflation has been rising while our labor force participation rate has plummeted to 61.9%, back to around where we were in the mid-1970s. In other words, only about 3 out of 5 working-age adults are actually working right now.
So, what societal change is necessary for the benefit of all of us? We need to get more Americans working again. The jobs are available. Wages are going up. For those considering going back to work, there is no better time than now. Whether employees work from home or at a business, if we hope to solve supply chain problems, get products back on shelves, and at least hinder the rise of inflation, we need to get Americans back in the workforce and doing their part to improve the future for all of us.
What is your greatest source of optimism about the future of work?
Innovation. Spurred on by the pandemic-induced introspection we discussed, many employees recently decided to become employers and start their own businesses. From January through November of 2021, approximately 5 million new businesses were started in the United States. This is a 55% increase over the same period in 2019, which was a boom year right before the pandemic. That’s a huge increase.
While we all are aware that starting a business can be difficult and the success rate for new businesses is generally not high, I commend them for their bravery and wish them all the best. Their entrepreneurial spirit is the same spirit that helped build our country. We are in a very interesting time in history right now. While it’s true that record numbers of workers have been abandoning the workforce, it’s also true that this period in history has been marked by incredible innovation, creativity, and entrepreneurship. That gives me hope for a brighter future.
Our collective mental health and wellbeing are now considered collateral as we consider the future of work. What innovative strategies do you see employers offering to help improve and optimize their employee’s mental health and wellbeing?
We are all creatures of habit. Before the pandemic, for as long as any of us can remember, most peoples’ daily work routine consisted of waking up, getting ready for work, commuting one way or another to a work location, working a full day, and then returning home. Rinse and repeat. For many of us, the pandemic tore us away from that comfortable routine. On top of that, we have been through difficult and uncertain times in the last couple of years. People have been stressed out. If you want to get an idea of how stressed out, ask your dentist. Your dentist will tell you about the incredible spike in people grinding their teeth because of all of the stress since the pandemic began.
Employers that are in tune with their employees have recognized that mental health is especially important to employees right now. While it is beyond the pale for an employer to try to fix what can be complex and difficult individual employee mental health issues, I have seen employers do their best to bring attention to employee mental health and ensure that employees are aware of mental health resources available to them under employee benefit plans or elsewhere. Employers have also held mindfulness and stress reduction training classes for employees. Some are actively encouraging employees to be sure to take the vacation time available to them.
Further, in this work-from-home era, several employers have made an effort to ensure that employees working remotely do not burn out. Burnout is a real problem while working from home. When employees leave a work location, there is a defined end to the day and they can clear their mind, be present with family, or engage in other personally gratifying pursuits. They are less likely to check e-mails during that time. But when they work from home, there is no defined end point to the day and the e-mails keep coming (often because some other employees or customers work from home later at night), so they keep on working and feel that they still need to be “on” through the evening even while at home. Employers seeking to remedy burnout stemming from an undefined work day can do something as simple as provide training to employees on burnout, work expectations, and proper e-mail etiquette for late night, Friday afternoon, or weekend e-mails (such as letting the recipient know that there is no need to respond until the next day or the following Monday).
It seems like there’s a new headline every day. ‘The Great Resignation’. ‘The Great Reconfiguration’. And now the ‘Great Reevaluation’. What are the most important messages leaders need to hear from these headlines? How do company cultures need to evolve?
While we’ve discussed The Great Resignation and covered The Great Reevaluation, which is the pandemic-induced employee introspection we talked about without naming it, a very important one we haven’t yet discussed is The Great Reconfiguration, or, as I like to call it, The Great Reallocation. For those who may not be familiar, The Great Reallocation is the tremendous reallocation of talent we are currently seeing in the workforce, where, in this hot job market, talent is gravitating toward employers that pay well and provide employees with the opportunities and level of flexibility that they desire.
Quite simply, the most important message leaders need to glean from The Great Reallocation is thus — leaders taking the time to evaluate their workplaces at the strategic level, seeking employee input, and doing the best they can to make their workplaces and careers attractive and rewarding for employees will reap the benefits of the Great Reallocation. Those who do not will suffer its wrath.
Let’s get more specific. What are your “Top 5 Trends To Track In the Future of Work?”
- The Run on Talent. Because of the unprecedented shortage in the labor market, powered by record numbers of workers leaving the workforce in The Great Resignation, employers are engaged in a run on talent that will continue or even intensify in the foreseeable future. In this tight labor market, with several million more job openings than unemployed workers looking for jobs, employers are realizing that recruiting talent away from competitors is a means to obtain a competitive advantage. Employers are getting aggressive with hiring and employees have more bargaining power than I have seen in 25 years of practice.
- Higher Wages. To lure prospective employees and retain their current employees in this hot labor market, employers are offering higher wages. Until the worker shortage is resolved, pay will continue to increase and employers will continue to offer enticements like signing bonuses, retention bonuses, private offices, and hybrid or fully remote working arrangements.
- Remote and Hybrid Working Arrangements. With so many forced to work from home at the onset of the pandemic, and the overall success of working from home, the flexibility that accompanies working from home has now become ingrained in people’s psyches. Many workers love working from home and want to continue doing it. But there are still advantages to working together in person, so some employers are compromising and offering hybrid working arrangements where workers are scheduled to go in the office on certain days of the week and have the option of working from home or at the office the rest of the week.
- Nationwide Recruiting of Remote Workers. The success of the work from home phenomenon and the shortage of available worders have caused several employers to embrace nationwide recruiting of remote workers. These employers greatly benefit from mining a nationwide talent pool and their employees love being able to live where they want, work from home, and still receive great pay. Now, if you want to live in a cabin in Montana or a beach house in Florida, you can do that and still get Silicon Valley-level pay.
- Our Low Labor Force Participation Rate. With a near 50-year low of only about 3 in 5 working age adults actually working right now, not enough people are working to meet our country’s needs. As a result, we are seeing supply chain issues, product shortages, and rising prices. To help solve those issues, we need to get more Americans working again. It is an employee’s market right now, and there is no better time than now for people find a good job.
I keep quotes on my desk and on scraps of paper to stay inspired. What’s your favorite “Life Lesson Quote”? And how has this quote shaped your perspective?
I like your style. I have several favorites. One that jumps to mind is: “Whatever your hand finds to do, do it with all your might.” If all of the good people in the world did this, especially in service to others, the world would be a better place. This quote encapsulates my approach to many things and I try my best to follow it.
We are very blessed that some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US, with whom you would love to have a private breakfast or lunch, and why? He, she, or they might just see this if we tag them.
Elon Musk. I love innovation. He is one of the greatest innovators of our time. It would be incredibly interesting to talk with him.
Our readers often like to continue the conversation with our featured interviewees. How can they best connect with you and stay current on what you’re discovering?
If they click on the link to my firm bio at the top of this article, they will find my contact information, a list of and links to some of my recent publications, and links to several of my radio and TV interviews and podcasts.
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Thank you for sharing your insights and predictions. We appreciate the gift of your time and wish you continued success and good health.