What’s Riskier for your Career? Getting Hired for a Job or Becoming Self-Employed? (Part Two)
What’s Riskier for your Career? Getting Hired for a Job or Becoming Self-Employed? (Part Two)
Career change can feel like being between rock and hard place

It’s tough when you feel like you’re stuck between a rock and a hard place …

In part one of this blog post, I discussed some of the hidden risks of being a highly paid, experienced employee in the private sector. I noted that over time, there may be pressure to replace excellent but expensive employees with ‘good enough’ but significantly cheaper employees. This is great for people climbing the corporate ladder, but it can be catastrophic for someone in their late 40s or 50s who may have a hard time landing a similar position in another organization. The fact is that higher-paying jobs are not as plentiful as entry-level jobs. As a consequence, it will be harder to obtain one. By some estimates, beyond a base of about $40,000 or $50,000 per year in income, it takes approximately one additional month to find a job that pays an additional $10,000/year. This means that for jobs paying closer to $100,000 it may take 10 – 12 months to get hired. Depending on the size of your severance package, this may put you into significant financial difficulty.

Typical High Income Employee’s ‘Interrupted’ Career Path

Typical 'Interrupted' Career Path for High Earners

Figure 1 – Typical ‘Interrupted’ Career Path for High Earners

As I said in part one, most employees’ income increases as they gain experience and skill over the years. For this type of employee, here’s a typical career path (see Figure 1). I’ve shown the ongoing salary rises until the age of about 50 when this person’s employment is ‘interrupted.’



As a career coach who works with professionals, I have seen this up close. The stakes are extremely high. People in their late 40s and 50s often have mortgages, and they are trying to save money to help put their children through post-secondary education and be financially prepared and secure when it is time for retirement.

What happens next?

Figure 2 shows what happens when a well-paid person loses their full-time job around age 50 and only earns money during short-term contracts for the next 10-15 years.

Graph of Typical "Interrupted" Career Path

Figure 2 – Typical “Interrupted” Career Path

The purple blocks are times with zero/minimal income (e.g., while unemployed between temporary jobs or contracts). The green blocks represent times when there is money coming in from severance or employment. This situation is very problematic since most peoples’ salaries are peaking in their late 40s to early 60s leading into retirement.

The concern is that due to ageism and high wage expectations, people who are in their 50s and 60s (or look like they could be due to their work history and/or appearance), the risk of precarious employment is significant. The periods of minimal or no income really reduce the average yearly earnings. So even if the short term contracts pay well when you factor in the zero income periods, it’s tough to recover from the months or years of lost income.

There’s an Alternative Path

Although the prospects of becoming self-employed, starting a business, or buying a franchise are daunting for most people who have been employees throughout their careers, there are instances where some form of self-employment really is the best, the less risky way forward.

When ‘the worst’ thing actually happens, and you need to restart late in your career, sometimes it’s smarter to figure out what type of self-employment makes the most sense for your unique circumstances and skill set. As challenging as it feels (and is …), it’s much better to get started while you still have enough years left to work and some severance funds to get you going.

Graph of Alternative "Interrupted" Career Path

Figure 3 – Alternative “Interrupted” Career Path

A wise and prudent investment of your limited resources combined with some sweat equity can pay off handsomely and keep you in the driver’s seat of your own career. Once you get established, the risks and threats to your livelihood should decrease over time. As seen in part one of this series (see Figure 3 from part one), as an employee with a high income, there are risks that may prevent your income from rising over time. While planning, you’d do well to take stock of your strengths and weaknesses and get some support where needed (e.g., leadership development, business coaching, or mentorship) to offset the gaps in your knowledge and experience.


Note – this blog post is based on my reflections on my clients’ circumstances and a conversation that I had at a trade show for franchisors with a representative from FranNet.


If you’d like to learn more about self-employment and entrepreneurship for experienced/mature people, I encourage you to read “Encore Entrepreneurship, more common than you think” and this article published by the Kellogg School of Management at Northwestern University about the (higher) success rate among older tech founders.


If you’d like to discuss mid-to-late career changes or pivots, I invite you to contact me by email, phone, or via direct message on TwitterFacebook, or LinkedIn.


More than career coaching, it’s career psychology®.


I/O Advisory Services – Building Resilient Careers and Organizations.


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