Layoffs, downsizings, and workforce restructurings have become business as usual. Every worker is vulnerable. “Since jobs no longer offer security, we have to create it for ourselves,” declares Diane Mulcahy, an expert on short-term, variable work. In her new book, THE GIG ECONOMY: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life You Want (AMACOM November 2016), Mulcahy shares five ways to begin creating income security, regardless of your current employment status:
- Build Skills. “More than degrees and titles, the new labor market is a market for the specific, demonstrable skills we can bring to potential employers and clients,” Mulcahy notes. She advocates a proactive approach to expanding your skill set. Among the many options: taking courses through platforms like EdX, building experience and a reputation by using platforms like Upwork, starting your own blog or podcast, and obtaining certifications in skills from coding to actuary.
- Build a Pipeline of Opportunities. Building a pipeline covers more than just a job search. It means that you’re continually seeking out and marketing yourself for new jobs, projects, and gigs. It means that you’re part of what Mulcahy calls the “hustling class,” always looking for work, evaluating and updating our skills and value, and staying aware of potential future opportunities.
- Build Multiple Sources of Income. Having multiple sources of income, whether from working a side gig or leveraging an asset, increases your sense of financial security and insulates you against the shock of a crisis, such as getting laid off. It can also be a low-risk way to launch a business idea. Instead of quitting your job to hang out a shingle that could shatter, you can start slowly by testing the market, iterating the services you offer, and building revenue and customers on the side.
- Keep Fixed Costs Low. It’s difficult, risky, and stressful to commit to high monthly debt payments or fixed overhead costs if you don’t know and can’t rely on the amount of income you’ll generate every month or year. That’s the reality for not only independent workers at all income levels but, since all jobs are insecure, virtually everyone. Income security comes from keeping your fixed costs manageable so the income needed to cover them is reasonably easy to earn.
- Enter with an Exit Strategy. In today’s economy, workers need to know how to leave jobs well. Starting a job with an exit strategy forces you to consider and plan for what’s next, and ensures that you won’t be blindsided by a sudden layoff. “Layoffs are a much more attractive exit than quitting,” Mulcahy observes, “because getting laid off is the only time we get paid to leave a job.”
Adapted from THE GIG ECONOMY: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life You Want by Diane Mulcahy (AMACOM November 2016).
DIANE MULCAHY is a Senior Fellow at the Kauffman Foundation and an Adjunct Lecturer at Babson College, where she teaches “Entrepreneurship and the Gig Economy,” a popular MBA course that Forbes.com named one of the top ten most innovative business school classes in the country. Her work in venture capital and entrepreneurship has been featured on NPR and in the Harvard Business Review, The Huffington Post, Fortune, Forbes, The New Yorker, The Economist, and other national media.