{"id":6925,"date":"2017-07-01T14:28:15","date_gmt":"2017-07-01T18:28:15","guid":{"rendered":"https:\/\/ioadvisory.com\/?p=6925"},"modified":"2024-03-09T13:48:21","modified_gmt":"2024-03-09T18:48:21","slug":"whats-riskier-late-career-job-vs-self-employment","status":"publish","type":"post","link":"https:\/\/ioadvisory.com\/blog\/whats-riskier-late-career-job-vs-self-employment\/","title":{"rendered":"What\u2019s Riskier for Your Career? Getting Hired for a Job \u2026 or Becoming Self-Employed? (Part One)"},"content":{"rendered":"<p><span style=\"font-family: verdana, geneva, sans-serif;\"><a href=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2016\/01\/Dr-Helen-O-career-and-HR-2016-B-checkerboard.png\"><img decoding=\"async\" class=\"alignleft size-medium wp-image-949\" src=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2016\/01\/Dr-Helen-O-career-and-HR-2016-B-checkerboard-176x300.png\" alt=\"Avatar of Dr. Helen Ofosu Career Coach and HR Consultant\" width=\"176\" height=\"300\" srcset=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2016\/01\/Dr-Helen-O-career-and-HR-2016-B-checkerboard-176x300.png 176w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2016\/01\/Dr-Helen-O-career-and-HR-2016-B-checkerboard-768x1312.png 768w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2016\/01\/Dr-Helen-O-career-and-HR-2016-B-checkerboard-599x1024.png 599w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2016\/01\/Dr-Helen-O-career-and-HR-2016-B-checkerboard.png 1182w\" sizes=\"(max-width: 176px) 100vw, 176px\" \/><\/a>Over the past five years, I\u2019ve had the opportunity to work with clients in their 40s and 50s while they were at a crossroads in their career. I consider this to be an exciting but challenging task because often these people are well-qualified in their professions and are also accustomed to excellent earnings. This means that the stakes are very high \u2013 they can\u2019t afford to go from a solid salary to a considerably lower income.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">In these clients\u2019 cases, something dramatic happened in their workplace. Sometimes it was an unexpected merger and consequently, their role became redundant. Other times, upper management chose to replace them with someone \u2018fresher\u2019 and more \u2018vibrant\u2019 (basically coded language for younger) who will work for less money, despite it being glaringly obvious the new employee didn\u2019t have the same level of expertise or work experience. In all these situations, my more mature clients were faced with the stressful choice between trying to find another high paying job or figuring out a way to become their own boss. Unfortunately, both options are associated with major risks.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Although what follows is based on past experience with established professionals, I anticipate that going forward, much of what I\u2019ll describe in this two-part blog will also apply to younger professionals who are facing job loss due to <a href=\"https:\/\/ioadvisory.com\/blog\/is-automation-your-newest-competition\/\">automation<\/a> (including artificial intelligence and <a href=\"https:\/\/www.sas.com\/en_us\/insights\/analytics\/machine-learning.html\">machine learning<\/a>) or other major <a href=\"https:\/\/en.wikipedia.org\/wiki\/Structural_change\">structural changes to the economy<\/a>.<\/span><\/p>\n<h2><span style=\"font-family: verdana, geneva, sans-serif; font-size: 12pt;\"><strong>Building Equity in Your own Livelihood<\/strong><\/span><\/h2>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">I\u2019ve come to realize that you don&#8217;t usually build \u201cequity\u201d as an employee the same way that you build equity as a business owner or self-employed person. Your \u201cvalue\u201d as an employee doesn\u2019t necessarily increase over time (see Figure 1). You do, however, develop transferable skills, experience, and grow a network as you progress in your career.<\/span><\/p>\n<div id=\"attachment_6926\" style=\"width: 310px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017.jpg\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6926\" class=\"wp-image-6926 size-medium\" src=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017-300x240.jpg\" alt=\"Graph showing no increased equity with time in career as employee\" width=\"300\" height=\"240\" srcset=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017-300x240.jpg 300w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017-768x615.jpg 768w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017-1024x820.jpg 1024w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017-1080x865.jpg 1080w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-1-Equity-as-Employee-May-30-2017.jpg 1511w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-6926\" class=\"wp-caption-text\">Figure 1 &#8211; Equity as an Employee<\/p><\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">On the flip side, as a self-employed person or business owner, one can and often does build equity in something that you have control over (of course, this assumes you\u2019re making it past the rocky early years &#8230; and the slope of the graph depends on many factors). See Figure 2.<\/span><\/p>\n<div id=\"attachment_6928\" style=\"width: 310px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017.jpg\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6928\" class=\"wp-image-6928 size-medium\" src=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017-300x203.jpg\" alt=\"Graph shows that equity increases over time in your own business\" width=\"300\" height=\"203\" srcset=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017-300x203.jpg 300w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017-768x518.jpg 768w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017-1024x691.jpg 1024w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017-1080x729.jpg 1080w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-2-Equity-in-own-Business-May30-2017.jpg 1791w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-6928\" class=\"wp-caption-text\">Figure 2 &#8211; Equity in your own Business<\/p><\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Typically, when I broach the idea of self-employment or propose buying a modest franchise, most of my clients don\u2019t even want to contemplate it. They\u2019ve grown accustomed to being valued employees, and feel more secure when they feel like their being taken care of by their firm or organization \u2013 and there\u2019s nothing wrong with that. Being a business owner or self-employed is perceived as <\/span>time-consuming<span style=\"font-family: verdana, geneva, sans-serif;\"> and high-risk. Many of my clients want to pursue something that they perceive as \u201csafer\u201d allowing them to maintain their lifestyle while meeting their established financial obligations. Those are all realistic (and desirable) concepts to be mindful of. But what if it I told you that it could be even riskier to go from one high paying job to another when you\u2019re well into your 40s or 50s?<\/span><\/p>\n<h2><span style=\"font-family: verdana, geneva, sans-serif; font-size: 12pt;\"><strong>Hidden Risks to High Earning Employees<\/strong><\/span><\/h2>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Let me explain. For many knowledge workers and professionals, as they progress in their careers, their income increases along with their expertise and work experience. This means they become more expensive to their employers. So, by the time a professional enters their late 40s or 50s, they are usually hitting their peak <\/span>income-earning<span style=\"font-family: verdana, geneva, sans-serif;\"> years (see Figure 3).<\/span><\/p>\n<div id=\"attachment_6929\" style=\"width: 310px\" class=\"wp-caption alignright\"><a href=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees.jpg\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6929\" class=\"wp-image-6929 size-medium\" src=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees-300x224.jpg\" alt=\"Graph showing risks increasing over time for employees in a career\" width=\"300\" height=\"224\" srcset=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees-300x224.jpg 300w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees-768x574.jpg 768w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees-1024x766.jpg 1024w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees-510x382.jpg 510w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees-1080x808.jpg 1080w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-3-Risk-Profile-Employees.jpg 1717w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-6929\" class=\"wp-caption-text\">Figure 3 &#8211; Risks Over Time for Employees<\/p><\/div>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Most organizations, find these hard-working, talented employees valuable to a certain point, but frequently they become too expensive to sustain. To cope, the business may pay those expensive, top-earning workers a fair severance and then hire someone less experienced who\u2019s prepared to work for much less and for more hours. It\u2019s a budgeting exercise. The counterintuitive reality is that it becomes increasingly risky to be an employee in the private sector where profit is the main motive. This is perhaps less of a concern in the public service and non-profit organizations.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">In contrast, over time, once a business owner or self-employed person is established and has a good business model, an adequate source of ongoing referrals, effective marketing, etc. then the risks <em>decrease<\/em> over time (see Figure 4).<\/span><\/p>\n<div id=\"attachment_6930\" style=\"width: 310px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business.jpg\"><img decoding=\"async\" aria-describedby=\"caption-attachment-6930\" class=\"size-medium wp-image-6930\" src=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business-300x216.jpg\" alt=\"Risks decrease for business owners and self-employed people\" width=\"300\" height=\"216\" srcset=\"https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business-300x216.jpg 300w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business-768x553.jpg 768w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business-1024x737.jpg 1024w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business-1080x777.jpg 1080w, https:\/\/ioadvisory.com\/blog\/wp-content\/uploads\/2017\/06\/Fig-4-Risk-Profile-Own-Business.jpg 1715w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-6930\" class=\"wp-caption-text\">Figure 4 &#8211; Risk Profile for Business Owners and Self-employed People<\/p><\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">There\u2019s more to this story but with all these graphs, etc. it\u2019s better to continue exploring this topic next week. It\u2019s a predicament many employees will face in the future and ultimately an important analysis for established employees who are sensing potential instability in their workplace\/position. This may start to apply more broadly as the impact of <a href=\"https:\/\/ioadvisory.com\/blog\/is-automation-your-newest-competition\/\">automation<\/a>, artificial intelligence, and machine learning become more prevalent in the coming years. The stakes are high so it\u2019s worth taking the time to spell everything out. So, stay tuned for <strong><a href=\"https:\/\/ioadvisory.com\/blog\/accept-job-or-become-self-employed-part-two\/\" target=\"_blank\" rel=\"noopener noreferrer\">part two<\/a><\/strong> of this article.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\"><strong>Note<\/strong> \u2013\u00a0this blog post is based on my reflections on my clients\u2019 circumstances and a conversation that I had at a trade show for franchisors with a representative from\u00a0<\/span><span style=\"font-family: verdana, geneva, sans-serif;\"><a href=\"https:\/\/www.frannet.com\/\">FranNet<\/a>.<\/span><\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\"><strong>If you\u2019d like to<\/strong>\u00a0<strong>discuss mid-to-late career changes or pivots<\/strong>, I invite you to contact me by\u00a0<a href=\"mailto:helen@ioadvisory.com\">email<\/a>, <a href=\"https:\/\/ioadvisory.com\/blog\/appointments\/\" target=\"_blank\" rel=\"noopener noreferrer\">phone<\/a>, or via direct message on\u00a0<a href=\"https:\/\/twitter.com\/drheleno_ca\">Twitter<\/a>,\u00a0<a href=\"https:\/\/www.facebook.com\/IOAdvisoryServices\">Facebook<\/a>, or\u00a0<a href=\"https:\/\/www.linkedin.com\/in\/helenofosu\">LinkedIn<\/a>.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">More than career coaching,\u00a0<em>it\u2019s career psychology<\/em>\u00ae.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\"><a href=\"https:\/\/ioadvisory.com\/blog\/\">I\/O Advisory Services<\/a>\u00a0\u2013 Building Resilient Careers\u00a0and Organizations.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-family: verdana, geneva, sans-serif;\">Easily share this article using any of the social media icons below!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the past five years, I\u2019ve had the opportunity to work with clients in their 40s and 50s while they were at a high-stakes crossroads in their career. In this article, I discuss some of the risks of remaining an employee vs the risks of self-employment.<\/p>\n","protected":false},"author":3,"featured_media":6926,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,7,262],"tags":[127,33,317,326,148,80,128,90,117,37],"class_list":["post-6925","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-career-advice","category-entrepreneurship","tag-ageism","tag-career-change-career-transition","tag-career-coaching","tag-career-counselling","tag-career-transition-later-life","tag-dr-helen-ofosu","tag-encore-entrepreneurship","tag-franchise","tag-franchising","tag-starting-a-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What\u2019s Riskier for Your Career? A Job \u2026 or Becoming Self-Employed?<\/title>\n<meta name=\"description\" content=\"I\u2019ve had the opportunity to work with clients in their 40s and 50s while they were at a high-stakes crossroads in their career ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/staging.ioadvisory.com\/whats-riskier-late-career-job-vs-self-employment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What\u2019s Riskier for Your Career? 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