Career transition: evolving in a changing world (thanks to your financial resilience)

Designing the present and positioning for the future by leveraging your past

 "As an architect, you design for the present, with an awareness of the past for a future which is essentially unknown...", Norman Foster, British architect.

Evolving in a multicultural environment (I grew up in England, moved to France 30 years ago and now live in Switzerland), I have often heard it said that in life there are those who live to eat, and those who eat to live; in the same way there are probably those who live to work and those who work to live.

Whatever the individual preferences may be, the period of career transition is typically a time of deep personal, professional, family, and financial reflection; it’s a time of decision making and change management, an opportunity to get better organised financially before embarking on a new professional activity. As with the architect, it is a time to become aware of your past professional and financial achievements which will facilitate the realisation of your future projects (despite the fact that the future is uncertain).

Businesses evolve

The Covid19 epidemic has imposed many changes in our daily lives, shaking up our habits, creating instability and sometimes resulting in a period of career transition. The Global Talent Trends 2020-21 report published by Mercer reveals that 45% of organisations are restructuring in response to Covid19, 34% are planning major training programmes and 29% are adjusting work flexibility.

Professionals reinvent themselves

When companies innovate, professionals need to reinvent themselves too.

For some professionals, the career transition period reflects a voluntary choice to better align the next career chapter with their own values, ambitions and goals. For others, it is a period 'endured', imposed because of an employer's decision and requiring the employee to make significant adjustments, to reconsider his/her working life in order to find a new career path.

A recent article in the Financial Times indicates a significant increase in business start-ups in Europe and the US in 2021; the professionals concerned are finding new ways of working, becoming entrepreneurs in a changing world.

These exacerbated uncertainties make it more difficult than ever to anticipate the future; a period of transition obliges the professional to take a step back, to reflect in order to move forward, to accept to question his or her initial plans and to prepare for the next steps both meticulously and exhaustively.

Finances at the heart of all projects

As I work in wealth management, at Piguet Galland, I regularly advise my clients on the management of their assets during career transition, and I have the privilege of collaborating with experts in this field. For my clients personalised wealth management becomes the keystone facilitating the realisation of their life projects.

During career transition the serenity generated by the resolution of their concerns about personal finances offers them greater resilience to focus on their professional projects.

Seeking advice is particularly important duting the following three phases:

1- Before the end of an employment contract

In particular, the need to review the potential fiscal impact of a severance package, or to consider a final buy-backin the 2nd pillar, as well as gaining an understanding of procedures related to unemployment benefit.

2- To analyse the overall situation once the work contract ends

For example, the setting up of one or two vested benefits accounts ("comptes de libre passage"), any necessary adjustment of loans, the organisation of the household budget, the financial impact of an early retirement or change of life...

3- Before launching into the next stage of the career

It's essential to understand the new occupational pension plan, to structure savings, to prepare early for future retirement...).

Financial building blocks

In these circumstances, I often suggest that the person going through a period of career transition identifies with an architect revising his or her plans (whether by choice or by obligation); in this context, the financial plan is a key element for the resilience of the overall project.

With a little imagination we could each assimilate our life to the construction of an extraordinary virtual palace, with spaces dedicated to leisure, spaces dedicated to personal life, and in general a section dedicated to professional life.

In this context, amidst potential life changes (such as divorce, moving to a new country and early retirement which often require a total fresh start), projects of career transition benefit from a certain consistency as one continues to build on the same foundations (professional and financial), sometimes with exceptional results.

As an architectural example, the Elbphilharmonie in Hamburg (a concert hall designed by the Swiss firm Herzog & Meuron) was built over warehouses without demolishing, in fact by reusing, the foundations; the result is the total transformation of a historic industrial building to create an international centre for classical music. As a professional example, in 1999 Marc Benioff took a 6-month sabbatical from the technology company Oracle to reflect on his career before creating the company Salesforce (50,000 employees and $ 17 billion turnover in 2020).

Experience is indeed a major asset. With a certain determination new skills may be developed whilst building on the same foundations; in a period of transition (chosen or imposed) these solid foundations allow the "architect" to continue to build differently but without reconsidering every angle. According to research by McKinsey (an international strategy consulting firm), about 30% of the working population in the US and Europe is self-employed; in these circumstances, working differently requires (re)considering the business plan of the career. However, the high failure rate among start-ups (estimated at 90% after 5 years), usually due to financial difficulties, requires even more vigilance.

To sum it up...

From a financial perspective, a period of transition offers the opportunity to mark a pause and analyse one's financial situation (including global assets and wealth) in order to validate or adjust the viability of future projects. Whilst a skills assessment is often useful during a career transition, a wealth assessment is always indispensable; it is the essential tool for analysing the financial base and determining the resilience of the levers available for implementing future projects.

So if you are going through a period of career transition, or if a friend or family member is concerned, make sure you consult a financial expert to accompany you in the construction of your future life. Become the architect of the virtual building of your dreams, take stock of your assets and review your plans. A small step in the right direction can change everything, for the better, bringing you greater financial resilience than ever before.