Structural Unemployment - A permanent trend… Are you prepared?

During a casual conversation with a close friend over dinner and drinks when we talked about jobs, future, retirement, etc… my friend brought up this term “structural unemployment” and we start to have a long conversation on this topic. It was a very great insight and discussion and I thought it will probably be a nice article to share.

For a start, structural unemployment is defined as “unemployment resulting from industrial reorganisation, typically due to technological change, rather than fluctuations in supply or demand.” In the modern economy, one trend has become a norm, if you don’t know it yet, it’s called retrenchment. In the past, retrenchment happens when an organisation is not doing well in P&L and can no longer support the running cost of keeping all the staff. In these days, they can call it restructuring, retrenchment, golden handshake, downsizing, etc. They are all the same and the purpose is purely cost reduction. For simplicity sake, I am going to just use the term retrenchment here. Regardless whether companies are making profit or not, it is not the main driver for retrenchment. Some companies can report the highest profit and yet conduct retrenchment in the same year (you can google about it).

So what drives retrenchment? The one and only answer - shareholders’ expectations. Shareholders need to see return from their investment. When they appointed key personnel such as a CEO in the company, the first thing is to show increase in profit. Growth is important but it takes time, and CEO won’t last that long enough if he/she can’t show profit within a year to the shareholders.

Well enough said… this is a permanent trend. If you are going to believe that your job is going to last till retirement, think again and look around you… almost everyone got it once… at least… the main thing is, are you prepared for it?

Those are not prepared usually will either fall back more or find it hard to climb back up. Especially so if you are after your mid 40s. So how to be prepared?

Allow me to share my own experience. As you can see from my article picture, I have worked as a DJ, a chef de partie, a photographer, an engineer. In my walk of life, I met a lot of people and also discovered a lot about my strengths and weaknesses. I am always hungry for knowledge and because of that, I am blessed with superiors who imparted to me a lot of knowledge and wisdom from their experience. People see me as talented and gifted, but to be honest, I need to support myself at young age and I believe hard work can provide me with the needed skills. As I learned and polished my skills and knowledge, I became very good in what I do. Hence, people see that as talent. Currently I am still doing adjunct teaching and freelance photography as passive income. 

Why am I sharing this? All these experiences and skillsets have keep me going when I lost my jobs 3 times in my career. I was able to take up temporary and yet decent salary while searching for the next job. At the same time, I build up my network and met new people along the way, some open new doors for other opportunities. Basically I am planting seeds for the future.

The world is evolving very fast, industrial and technological are moving faster in the last decade than ever before. What you are doing now may no longer be needed in the future. If you are going to stay where you are and believing nothing is to change and affect your life, you failed to realise that change is the only constant, if you don’t embrace change, change is going to embrace you.

So what to do next? How to be prepared for structural unemployment and stay employed?

Here are some of my suggestions:

1. If you want to remain in your company, you need to do an important thing. As I said, it is about P&L in an organisation. Bring in a significant cost savings idea and be the driver/project leader for that. Do it so well that you can keep doing it for years.
2. Pick up a variety of new skills – skills that required human touch or any unique intellectual skills that is niche and yet cannot be easily replaced by technology such as AI. Just an example: musical instrument like piano can never be replaced by technology even if it can. Because music is about emotion and that can only be expressed perfectly via human touch. Never think you are too old to learn, you are born with no skills from the beginning.
3. Improve your interpersonal communication skills, spend more time face to face with people. Technologies like internet and whatsapp have reduced people social skills, the younger generations are becoming less expressive. In the near future, this will become a niche skill. If you don’t know how to go about this, feel free to approach me for consultation (www.t-labc.asia).
4. Build up your personal branding, let yourself be known in the job market. LinkedIn is one of the best platforms. Seek LinkedIn experts for training and “Plan your exit before it comes”. Find time to make friends with people from other industries, especially recruiters and headhunters during your spare time. You never know either of you can help each other in future.
5. Don’t just do what you are currently doing. Find out what your hobbies are and whether they can evolve into a business. Start from there and maybe make it into a small side-line. Trust me, if you only make $50 per month on this for a start, it is considered very good because as you build your branding and reputation, it will probably bring in more than you expect in a few years time. I still make around $1,000-$2,000 per month from a freelance photographer and that money does come in handy at times. But take baby steps and build something during your spare time. Don’t wait till you are jobless, you won’t have the mood and patience to start a sideline earning as little as $50 for a start.
6. You can never retire with one job, unless you are really holding a big position in your organisation and yet keeping a simple lifestyle. Hence, alternate passive incomes can build your retirement nest faster. Consider exploring e-commerce business which is the future business platform. You can message me for more information in this aspect.
7. Don’t be rigid and insist that you just want to use your qualifications and skills forever. The market may not have jobs for you in the future or the demand becomes a lot lesser & if you are in mid management, demand for your role is even limited. While you are employed, this is a good time to think of alternate career path. Usually those with higher qualifications & experiences are the more reluctant people to do career switch. It is hard to start over, so start now before the current one end.

The above are just some proven suggestions that either I have personally tried or have witnessed in others. The important thing is rediscover yourself and pursue new adventures and try new things. You will never be too old for anything unless you are reluctant to learn. At the end of the day, it is about your attitude.

“I don’t mean to say that I have already achieved these things or that I have already reached perfection. But I press on to possess that perfection for which Christ Jesus first possessed me. No, dear brothers and sisters, I have not achieved it, but I focus on this one thing: Forgetting the past and looking forward to what lies ahead, I press on to reach the end of the race and receive the heavenly prize for which God, through Christ Jesus, is calling us.” (Philippians 3:12-14)