The current Covid-19 crisis poses a “systematic risk” to careers in various industries.
Economist, Dr Allison Schrager is known for best describing the difference between this type of risk and “idiosyncratic” risks in a variety of scenarios. In short, as the terms imply, idiosyncratic risks are unique to a particular context or environment and systematic risks are those that affect the larger system beyond just the individual context or environment.
How do these apply to your career?
According to Dr Schrager, in the past, most risks to careers were largely idiosyncratic: a conflict with your boss, a poor job fit, or a company that has to close down because of poor management, rendering you jobless.
On the other hand, systematic events often happen because of large economic disruptions, such as recessions and technological advancements that render human labour redundant.
In such cases, those who lose their jobs may never find a similarly good one.
Being able to anticipate, understand and manage such risks is vital at all times, not only when the systematic event occurs. As such, we’ve always recommended having a career contingency plan in place.
In order to do this well, take the following steps:
1. Envision Your Ideal Career
Begin the process by envisioning your ideal career and where you want to be in five to 10 years. Then, work backwards, identifying what could possibly prevent you from achieving your goals. This will help you at least narrow down the list of risks and obstacles.
2. Develop Competencies that People Want to “Buy.” What You Want to “Sell” is Secondary
It’s critical to develop talents, skills and experience that employers are likely to want. Think of prospective employers as your “buyers” and of yourself as the “product.” This mindset will help you mitigate career risks as it will propel you towards developing your talents and skills in ways that would benefit those who are willing to pay top dollar for them.
3. Examine Your Assumptions and Data
Examine your assumptions about the career you’re in now. For instance, is your assumption that technology can’t replace your job function valid? Will this be valid five years from now? Trends that seem insignificant today could become much more significant in the future, rendering your assumptions irrelevant. Prepare for this eventuality.
In order to do this well, you must constantly update yourself on industry and related developments. Take a look at the available data and make intelligent inferences about the story behind the information.
4. Prepare for the Worst and Minimise the Impact of Career Disruptions
Covid-19 has managed to pulverise even the best-laid plans.
Think about how things could possibly degenerate and develop strategies to offset the impact of dramatic changes.
For instance, some professionals ensure they have multiple sources of income in case one disappears due to unexpected circumstances.
Others minimise the impact of career disruptions by developing a side gig that’s adjacent to your primary field but not entirely connected. Doing so would enable you to thrive in the event your entire industry is badly affected by a recession.
Putting all your effort in one place such as your full-time job might help you do well at work in a good economy, but in a bad economy and in the event of layoffs (which have been known to hit top performers too), it is likely to be hard to find a new job. Diversifying your portfolio of gigs, skills and investments would certainly help.
5. Recognise Your Vulnerabilities and Defend Yourself
You can’t prepare for every threat, but recognising your vulnerabilities will allow you to at least begin mitigating risks before crisis strikes. Doing so beforehand allows you to come up with solutions calmly and rationally rather than in a haphazard fashion in the midst of a catastrophe.
6. Broaden Your Definition of Career Success and Expand Your Options
Instead of having only a single career goal – for instance, to make more money, or get a purposeful job – ensure that your definition of a successful career is multi-faceted. This way, you won’t be unhappy should you have to give up one element of success for another.
With this definition in mind, develop broadly applicable skills that will increase your career options.