The key employment issues impacting the tech sector in 2022
The world of work is evolving in directions we would not have predicted two years ago. As tech employers adapt to the new world of work, the scrutiny on workplace culture continues. Many of these employment issues are interlinked, setting the scene for tech sector employers and their areas of focus for the year ahead.
The future of work
No one can ignore the impact the Covid-19 pandemic has had on the workforce and attitudes towards remote working. As many tech companies have already adopted hybrid working models, there will be new challenges and opportunities for employers to navigate in the coming months and years, from the impact on workplace culture, to the challenges of onboarding new teams and fostering inclusivity, to threats of cybersecurity and employee surveillance, to impacts on work-life balance and staff wellbeing.
Workplace activism
Workplace activism is fast becoming a defining feature of the workplace. It describes the actions taken by individuals (whether individually or collectively) to challenge working conditions or in response to broader societal, political, or environmental issues. With a heightened awareness of workplace rights and social media, employees can become activists within their workplaces very quickly. They are no longer prepared to sit back and let their leaders prioritise profit over people and the planet.
Activism has the potential to drive consumer trends, affect the ability to list, and even drive changes in the law. It also has the potential to hit the headlines, impacting share price and employer brand long after today’s headlines become tomorrow’s chip paper. We have seen high profile litigation result from activist workforces and lead to changes in business models of large tech organisations. Activism has also facilitated an increase in union representation across the sector – trends we have not seen since the 70s and 80s but now happening in professional, tech and gig-economy environments.
Diversity and inclusion
Criticism over the lack of diversity across the tech sector continues, along with enhanced scrutiny over new tech as AI and automated technologies have highlighted issues of racial bias. Increasingly, large tech employers are choosing to report on the demographics of their workforces beyond their legal and regulatory obligations. But with talk of the ‘Great Resignation’ and war for talent - and in a sector where competition for talent is already fierce and retention rates are already lower than other sectors - the focus on inclusivity is more important for tech companies than ever, as employers need to focus on their existing workforces to build their future talent pools.
ESG, diversity and the link with pay
With the ongoing focus on ESG and monitoring tech companies’ progress on D&I, many organisations are looking at ways in which they can use non-financial metrics in their performance and remuneration assessments. Investors, the media, and other stakeholders are increasingly holding companies to account for pay-outs which, while meeting agreed financial or business targets, are considered out of line with ESG, cultural or diversity objectives. Whilst doing so can demonstrate to the market that business leaders take ESG and D&I issues seriously, there are various issues for employers to be mindful of, from the reliability of data being used, to the evolving expectations around D&I for the tech sector and whether remuneration can truly help to improve diversity in a sustainable way. There is also the challenge of setting targets at an appropriate level by using short- and medium-term remuneration targets as part of wider and longer-term ESG and diversity objectives.
Team moves and the potential reform for non-competes
Post-termination restrictive covenants can be a key business protection for tech companies. Founders, creatives, and other key personnel can be assets to the business who are often well placed to take advantage of confidential information, strategic plans, and valuable IP after they leave. They can pose a serious risk to the business if they join a competitor or set up in competition themselves.
But as governments look to facilitate economic recovery following Covid-19, post-termination restraints can be seen as a barrier to innovation and competition. In the UK, the future use of non-competes is under scrutiny and potential reform is on the way. In 2022, we expect to see the Government’s consultation response on its proposals to scrap the use of non-competes altogether (similar to the approach taken in California after success in Silicon Valley) or introduce mandatory compensation for the duration of any restrictive period. Any change to the UK regime here would be a huge change in the law, and potentially have significant commercial and business impacts for tech employers.
Authors
Laurie Ollivent
Senior employment lawyer at Linklaters and member of the Linklaters Diversity Faculty advising businesses on legal and regulatory developments, market trends and diversity and culture issues.