Maximising the value of human capital

Are you a digital native when it comes to technology? Have you got a filing cabinet and a job description, or are you focused on the travelling you'll do during that career break you've planned?

These questions might sound flippant, but maximising the value of human capital within law firms demands a new paradigm. We live in a changing world, with multiple generations and different styles of working. We need to recognise that and find innovative ways to engage our employees.

This is the message from generational expert
Dr Paul Redmond, the director of student life at the University of Manchester and a keynote speaker on digital natives and the world of work.

This is vital given that December 2015 research from Hays Legal tells us that more than half of legal sector staff plan on moving jobs within a year, and that the sector as a whole is the
most vulnerable to staff movement. There are recruitment problems too, with 75 per cent of firms saying a lack of suitable applicants will
be one of their biggest challenges over the coming year.

The main motivation for a move appears
to be lack of opportunity, and figures from the Crowe Clark Whitehill 2015 law firm benchmarking survey suggest that solicitors without input on the strategic direction of their organisation are almost twice as likely
to leave.

Generation gap

An important place to start is by recognising
and understanding the generations that currently co-exist within the workplace. Most firms have
at least three - the boomers, generation X, and generation Y - but there are also the up-and-coming millennials.

The post-war baby boomers have defined the office environment as we know it. The style of office working - ranging from the pattern of holidays to job descriptions - originates with them. They are the most loyal generation, but
are now moving off centre stage.

Generation X were sold the myth of the leisure society, but find themselves likely to be working into their seventies. Work-life balance is very important and this generation uses, but is slightly amazed by, the power of technology. They are digital immigrants compared to the generation Y and millennial natives, for whom devices are not 'technology', they are just 'stuff'.

Generation Y do not know failure and believe that attendance is optional. They have more academic qualifications than any previous generation, and their boomer parents operate
as agents for them. They come into the world of work expecting a career break within five years, when they will go 'travelling', never 'on holiday'. Thrill-seekers, they are brand-aware and face ubiquitous globalisation in a world that is always on, anywhere and everywhere. One day they will work in jobs that do not yet exist, in markets not yet created.

The millennials are the thumb-generation: everything takes place on a device and they have never been left alone, or allowed outside on their own, by their 'helicopter' micro-managing generation X parents, which may put their future social skills into question.

New leadership styles

Differentiating is one thing, but knowing how to engage these staff is another. Lucy Adams, the managing director of Firehouse, offers some tips. As the former director of HR for the BBC, she oversaw staff relations and engagement during the broadcaster's biggest-ever period of change and her experience of working in a period of volatility will strike a chord with lawyers dealing with the significant changes taking place in
our sector.

Adams described today's business world as VUCA - volatile, uncertain, complex, and ambiguous. Originally coined by the US military, the term describes the extreme conditions in conflict zones such as Afghanistan, which forced a shift from traditional command and control military structures. The acronym made the transition into management-speak as corporate leaders faced up to an ever-shifting political, economic, and societal landscape. 

Engaging with this uncertainty demands greater agility and a new style of leadership. Relationships are more complex and nuanced, demanding more collaboration inside and outside the organisation, with reputation more important than ever. In this mix, it's vital to recognise the power that employees hold, as influencers and broadcasters, critics and ambassadors.

Generation Y are the first to have the power to make news before the broadcasting media, and they believe their own views matter as much as an official or original one. They have made the shift from consumer to 'prosumer' and they can damage reputations in an instant on social media.

To succeed in this disrupted, multi-generational world, Adams has highlighted the need for fundamental changes. Most important is a shift from 'parent-child' management styles, where absence of trust is inherent and policies are designed to stop behaviour. Younger generations will not accept parental-style relationships: they want to be running their own businesses before long and want your trust in the meantime.

Adult-to-adult relationships are the way ahead. A number of firms are working on new approaches, including Ashton KCJ in the east of England, which drew headlines by adopting an unrestricted approach to holiday leave, echoing corporates such as Virgin and Netflix. The policy is still in its infancy but the firm is reporting positive feedback so far. Similarly, firm leaders at Mogers Drewett in the South West have active, open dialogue with their people to establish how many feel they know where the firm is going and are motivated to help it get there. At the last count, that was some 90 per cent - what would your score be?

Training shift

When it comes to training, a figure from the US suggests that despite some $160bn being spent on training each year, 80 per cent of it is forgotten within 30 days. Enlightened leaders are calling for a shift away from training that addresses the remedial needs of the individual, replacing it
with an approach designed to identify what an individual is good at, focusing on those strengths and designing an individual's job around their attributes.

Data from the Investors in People 2015 job exodus survey suggests that 40 per cent of solicitors under 35 believe they don’t receive the type of feedback they need to develop their careers, and the annual staff appraisal is another target for change. The words ‘Can I give you some feedback?’ are said to have the same effect as someone approaching you from behind in a dark alley, shutting down the receptors you want to ignite. Regular, informal talks and rewarding group or individual successes are likely to generate better results, especially when using the right language to suit the audience and reflecting generation Y’s preferred learning style, which is experiential.

So-called ‘nudge’ tactics can be a valuable technique in dealing with generation Y, who want things to be easy, attractive, social, and timely – or EAST. It’s this generation for whom the government came up with auto-enrolment for pensions and why Uber devised its cashless, cost-effective, controlled solution to calling a cab. It’s why Apple puts so much emphasis on creating desirable products, and why Nike lets you personalise your own trainers and then ‘share’ them with your social media followers.

Much of this comes down to treating employees as consumers, as, just like with customers, one size does not fit all. Every workforce is a patchwork of different generations and personality types, and successful staff engagement demands new ways to incentivise.

Generation Y and millennials will make up the majority of the global work force by 2020. This up-and-coming cohort want competitive pay and benefits, and to be proud of the organisation they work for, but individuals in knowledge economies such as the law are just as likely to be motivated by autonomy and meaningful work as by the money. As the PricewaterhouseCoopers 2011 ‘Millennials at work’ survey shows, these generations are switched off by rigid hierarchy and traditional management styles.

Some firms are already responding to this shift. For Buckles in Peterborough, a three-pronged strategy has been designed to simultaneously develop and foster a culture of excellent client service, the firm's people, and long-term relationships. The strategy has seen high levels
of innovation, productivity, and performance among employees.

Another firm, Gardner Leader in Berkshire, has focused on enabling employees to take part in delivering collective objectives. Results show
that this has helped with the adoption of new practices designed to support future growth,
as well as being a vital component in achieving excellent customer service.

Devising strategies and tactics to tackle
the demands of this multi-generational,
VUCA world is undoubtedly a challenge,
and demands a major shift for many firms, but
I believe mid-size independent firms have a real opportunity: they are agile and have the potential to respond to change with greater immediacy
and effectiveness. SJ

Chris Marston is the CEO of LawNet