Capital Career is key for your career, especially nowadays in our strange replica wax cake economy. The economy may look great like a wax model, but it’s not providing much beyond that.
Globally, we are having a long economic expansion (egghead for growing economy). Job numbers have been great and yet… pay has not grown (in the case of Canada not for 40 years). Higher demand (more jobs) should lead to higher pay (increased salary) or was Adam Smith just high when he wrote that?
The result is that many find it more difficult to save, buy property, retire and give their kids a head start. One solution is to ensure you have the right experience and skills or Career Capital to stand out among the crowd so you can demand higher pay and avoid this trend.
Manage Your Career Risk
In my last post, I argued that risk management doesn’t just apply to investment portfolios but also your career. Disruption comes in many forms – technological, economic, social, environmental etc. It offers new opportunities like blogging but also presents serious challenges like stagnant wages and jobs replaced with automation
A useful concept to manage your career is Career Capital – manage your career as an asset the way you would manage your financial assets. And like financial assets, you need to manage uncertainty and your emotions to make sure you make the best decisions.
Career Capital
In the book “Be So Good, They Can’t Ignore You“, Cal Newport uses the term Career Capital to describe valuable and highly sought after skills. These skills are leveraged to find “dream jobs” and kick-ass work.
The idea of Career Capital illustrates how skills and experience are assets. It also captures how the market-value of career capital is constantly in flux.
Just like Blockbuster Videos, a set of skills, experience and abilities that were traditionally in high demand (say a bank teller) can become less valuable over time. Conversely, traditionally unimportant skills, experience and abilities can become valuable career capital – like playing with toys on youtube.
Also, the value of career capital is not always clear until you try to exchange it. Value is very subjective and current perception plays a big role in its market place value. For instance, Apple stock price dipped significantly around the start of the year.
Did the company really change that much over a short period of time to lose 40% of its value? Probably not. The price change probably reflects the collective market’s perception of future returns rather than the current actual value of the company.
The same perception aspect applies to career capital. A large part of your career capital value depends on volatile perceptions of the future. The value won’t be certain until you go job hunting and test the actual waters.
Uncertainty in Investing in Career Capital
It is critical to update and grow your career capital to minimize the risk of change lowering your career capital value. This may be new training, changing jobs or gaining new experience. However, it’s not 100% certain where to invest your time upgrading your career.
However, the biggest risk of all is doing nothing – if you don’t grow its a certainty your career capital will lose values. As a personal example, I have been studying data science to improve my skills since a significant part of my work involves analysis. Partially because I enjoy it but also to build my career skills. Will it work out? Not sure but probably better than doing nothing… or sniffing glue.
Furthermore, like investing, there is the risk of following the herd and pursuing careers that lots of people are pursuing. Many people tend to focus on the same hot industry at the same time (like data science) while ignoring other areas with high demand like trades.
So expanding and upgrading your career capital involves careful deliberation.
Emotional Attachment to Career Capital
Another challenge is emotions distorting your career decision process. Common emotional challenges are:
Fear of Change
Changing and upgrading your skills and experience involves a risk of failure and engaging the unknown and uncertainty. You are also risking some resources. The little voice may say things like “What if I can’t find a job after going to the trouble of getting a degree? What if I don’t like the new job? What if I am not good at it?” Many of these doubts scare people into staying in jobs even if situations are getting worse.
Fear of loss
As society evolves, skills and experience can become stale and outdated or the industry can become less lucrative. However, people remember the good old days and assume they will return and don’t want to miss out. They value what their career capital has traditionally brought them and therefore they fear losing if they “move on”.
Career capital becoming your emotional identity
People will sacrifice to maintain their identity. For instance, a voter that strongly identifies with a political party may vote for a candidate out of “loyalty to the team”. They may hold onto a stock because they don’t want to look foolish for choosing the wrong stock. In the same way, a man who mines coal may not want to retrain as a healthcare worker because it’s not a “man’s job”. Their identity has become an inflexible anchor, holding them back from engaging in positive change.
Losing site of opportunity and refusing to change
Fear can blind people to the opportunities and the risk to their current Career Capital. Change becomes an “attack” on their life. They ignore opportunities to upgrade their “career capital” and try to maintain an increasingly unfeasible status quo.
At this stage, it becomes tempting to blame other factors (i.e. taxes, environmentalists, immigrants, etc.) rather than address the actual cause (less demand for product and services etc.).
Unfortunately, there are people out there who will encourage this behaviour for their benefit and your detriment. They will distract you from making vital but scary steps to improve your future. That’s why it’s very important to be skeptical and informed when industry leaders and politicians propose change and actions – it could directly impact your bottom line. Next post on this series we’ll look at an industry undergoing changes and how the above comes into play…
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