Amit Dugh & Ravi Dugh, May 19, 2020
Career change or choosing a career is fundamental to all individuals. This article will provide a decisive strategy for choosing the profession, and the skill-set needed to go along with it for a prospective future and command higher salaries.
In tough times of COVID 19, it is important as many individuals have been laid off or either at the risk of being laid off. Those who are about to start their chosen career have mixed opinions due to uncertainty about their career options. Students going to university or college wonder if their choice is right or wrong, only time will tell. Back in the 20th century, I heard wise men say rolling stone does not gather mass. It was unique to the Baby boomer generation, where loyally was vital, and staying in one job was possible for years. In the 21st century, the situation I have observed is that rolling stone gathers mass. The newer generations have different priorities and are not scared of changing jobs to get something better. So what did change other than the way generations think and behave?
There are six key questions to be answered to complete the career strategy, and the whole process is iterative. These include working rights, demographics, industry profitability, return on knowledge, risk of automation, and degree of differentiation. These are below:
- Working Rights: What are the working rights of an individual or where the individual does not need approval to be employed. Answer to this question is highly dependent on the citizenship of the individual. For example, A German national has full working right in all of the European Union, whereas a Chinese national has full working rights in all the Chinese territories. Similarly, the nationality of the individual decides the market where he or she is employable. It is important to note that working rights in some advanced countries can be made easy by studying. Graduating students can apply for a post-graduation work permit as a way to increase the skill set and possibly change the individual’s citizenship as long as they meet certain criteria.
- Demographics: Understanding the market dynamics and demographics of the market in focus is essential for the individual. It is like trying to understand the demand and supply of employable individuals in need. See below demographics by country explained.
Looking at the demographics of Japan, we can see the employment age envelope highlighted by yellow on the left from 20-24 to 60-64 yrs age group. The percentage of population exiting the working age in the next few years will be about 6%. The incoming population percentage will be 4.5%, which shows that the numbers of individuals seeking jobs are likely to reduce by 1.5% over the next five years. It indicates a decrease in competition to be hired, assuming that the economy continues to grow.
Reviewing the demographics of China, it can be said the percentage of population exiting the working age in the next five years will be about 5.4%, and the incoming population percentage will be 6%. It shows that the numbers of individuals seeking jobs are likely to increase by 0.6% over the next five years. It offers an increase in competition to be hired if everything else remains the same.
Reviewing the demographics of India, it can be said the percentage of population exiting the working age in the next five years will be about 4.3%, and the incoming population percentage will be 9.1%. It points out that numbers of individuals seeking jobs are likely to increase by 4.8% over the next five years. It shows a significant increase in competition to be hired if everything else remains the same here. It is crucial to consider that the younger population joining the workforce will drive consumption and provide a boost to the economy. However, the rewards of economic growth don’t go proportionately to all the sectors of the economy. Further, based on competitiveness, growth scenarios, some skills may be highly valued vs. some others.
- Industry Profitability: One of the most critical factors for selecting your next opportunity is industry profitability. A highly profitable industry generally offers higher salaries and better perks. While reviewing industry profitability, one has to check industry growth as well. A growing sector provides better employment opportunities.
- Return on Knowledge: One factor in the industry is the value of your skills. If you are in a profession in which your accumulation of knowledge improves your ability to command higher salaries, then you are well-positioned. On the flip side, if you are in a role where your skills don’t depend on knowledge but non-cognitive factors (e.g., driving, etc.), then with experience, you won’t be able to command substantially higher salaries.
- Risk of Automation: Further, one important factor to consider is automation, i.e., is your job subject to automation? Job functions that are regular and non-cognitive are most susceptible to automation.
Degree of Differentiation: An individual providing services as an employee to a company can be considered as a product. For an individual to demand a good salary, it is vital to choose the career which is a niche. Job seekers can differentiate their skill set from what is available on the market in a few ways.
- Low-cost provider: If a career that requires commoditized skills (i.e., a mature industry with ample supply of talent) is selected, it is imperative to analyze how the individual can differentiate with an additional skill set. For example, a skilled accountant does not distinguish themselves from other accountants. It means that when applying for a job where an accountant is needed, and no different specific skill set required, the salary for such position is meager. It is categorized as a “Low-cost provider,” or the job has no differentiation.
- Stuck in middle: For a job seeker to move away from being a low-cost provider, one must find ways to differentiate. For example, an accountant who is skilled and has specialized certification or accreditation like an accountant is a CA – Certified Accountant. It will make the accountant different from another to a degree but may not be highly differentiable, which could be categorized as “Stuck “in the middle. Such career profiles have better job opportunities than those which are categorized as “Low-cost provider.”
- Differentiate: Carrying on the example from above with the accountant, if the accountant is a CA – Certified Accountant, and has a skill-set in using particular ERP software systems like SAP, Oracle, etc. It makes this accountant highly different from another and provides the ability to demand a higher salary and better job security.
With differentiation, a career can be shaped to command higher salaries. Job seekers can move up the pyramid, and the competition reduces.
In conclusion, the six steps can be used as an iterative process to work out a career strategy. This career strategy can be used along with the likings on an individual or as a supplement to enhance the prospect of commanding better working conditions and job security.