Can you rely on your job? i posed this question to one of my clients. We were discussing the job stability part for Home Loan planning. Based on my experience with my clients, I receive “NO” as an answer from 8 out of 10 clients in their 30’s. The ratio is much better for clients in 20’s. 70% of the young workforce is assured of their job stability. One of the reason is that young workforce is lower down the corporate ladder and at much lower salary therefore Job Stability is very much assured. As i mention in my previous posts related to the career that an employee is on the radar of an employer once salary exceeds 1 lac per month. This range vary from industry to industry but 1 lac is ballpark for new age sectors like IT, E-Commerce etc. Though i listed this post in Views category but it is relevant from Personal Finance perspective as the Job Stability index help to take a lot of personal and financial decisions in life.
There is a famous quote that “Either change yourself with a Change or Change will Change you”. We cannot be ignorant of what’s happening around us. Moreover, we have to come out of the mindset that what is happening to others cannot happen to us. Almost every other day, we come across a news article on cost cutting or job retrenchment. It’s across the industry and across the spectrum of corporates. Though i can discuss this topic in length but will keep it short and simple. Let’s check out key reasons which are contributing to unstable job scenario
Reasons for unstable Job
1. Large Pool of Workforce: Whether we accept or not, but there is a large pool of workforce which is available. The funnel is very narrow as someone move up the corporate ladder. In the corporate lingo, organization say that “Only Best will Survive“. In other words, others are not required. Therefore, competition increases as and when you move up the ladder. Now one way to look at it is that you should not move up the corporate ladder to retain your job. You will not believe that last year one of my friend refused Job Promotion as he felt that in a new role he will be vulnerable because of high competition and other reasons. It might sound foolishness to some but in my opinion, it was a wise decision. Only flip side is that organization may think that employee is not willing to learn or grow. As he is working in one of the traditional corporate houses therefore it is fine. I am not justifying his decision but just sharing a perspective.
2. Cheap Workforce: People are willing to work at the lower salary. Also, organizations are focusing on quantity rather quality. By removing one mid-level manager drawing a salary of 2 lac per month, an organization will hire 3 junior staffers at Rs 50k salary per month. Still a savings of Rs 50k per month. This is the reason one of the IT giant which retrenched large mid-level workforce sometime back is now hiring thousand’s of freshers.
3. New Thought Process: In new age sectors, the importance of experience is being replaced by the new thought process. This virus is being spread by 3rd party consultants hired by organizations to improve efficiency and productivity. I heard so many HR friends saying that new employee will bring new thought process. In my opinion, this is not the case. HR has to justify their role, therefore, this is the best way to keep churning the human resource portfolio and justifying their own job at the cost of others. I am sorry for being harsh, but this is the reality. In my opinion, an experienced employee is worth more than a recruit with the new thought process. It is now reflected in the performance of IT giant which has removed a large pool of experienced mid managers.
I have highlighted many more such reasons in my post, Employee Layoff – The Real Story. Even if someone lose the job then he/she should be financially and mentally ready for the same. You can check my post, How to handle job loss?
All these reasons help you determine your job stability i.e. if these factors/symptoms are relevant for your job/department/sector/company.
How to handle this situation?
1. Identify Sunrise Job/Sector: You should always identify the emerging trends and try to shift in job/sector/industry which is sunrise or emerging. It will help you to remain relevant in the corporate world. One of my known persons shifted to E-Commerce from IT in the year 2012. At that time, all friends thought that it is a foolish decision but today everyone acknowledge that it was a wiser decision. To take these decisions, a person should have good judgmental power and well versed with the future economic environment.
2. Create a Niche for yourself: In layman terms, create a dependency of your organization on your job profile. An organization should think that no one else can do this job. Normally, organizations don’t like such situations and always create a backup for critical profiles. Therefore, the focus should be to create a situation that no one can do it better than you.
3. Create Alternate source of Income: I covered this in my post 5 ways to create a second income.
4. Keep Shifting your Job: Though it may sound a bit off track and illogical. Based on my experience till date with my clients, i can say with 100% conviction that you should shift job every 2 years. The data points available with me indicate that Job stability decrease with your stay in the company. Most of the retrenchments is from the older lot. Reason being, 1st 6 months is a honeymoon period in the company wherein employee understand the system. Next year or so the productivity is high as new employee bring new thought process and fresh ideas. Roughly after 2 years, the employee enters into a cycle of redundancy. Therefore, to remain relevant and if you would like to answer the subject of this post in NO then you should change job regularly. Of course, the period of 2 years will depend on profile and industry.
Hope you liked the post. You should catch early signals of shaky job stability. Remember the golden words of Dr. APJ Abdul Kalam “Love your job…But don’t love the company you work for. Because you may not know when you company stops loving you“
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