You report to work everyday as required by the company. You work on assignments and projects given to you by your boss or by other managers in the company. Your paycheck comes from your employer, and your retirement plan and benefits package are handled by them as well.
You’re an employee, right?
You’re working for your company to support yourself and your goals right now. But your dreams, ambitions and goals are your own, and like the world we live in, they will change as time goes on.
This isn’t the Post World War II era anymore, and the job-for-life phenomenon ended long ago. Today, not only are job changes frequent, but so are career changes. We’re all responsible for managing those changes and all that goes with them.
Translated, even though you may work for someone else, you’re really self-employed! Over the course of your working life, you’ll be required to make all kinds of decisions about training and marketing yourself, taking different job and career paths, managing your money and a host of decisions that have far more in common with the self employed than they do with salaried employees.
This requires thinking in strategic terms, beyond the job and beyond the moment.
We might be tempted to believe that one of our employers’ basic functions is to provide us a career path, a ladder that we can climb steadily and faithfully so that we’re able to increase our earnings and become all that we’re meant to be. For better or worse, that isn’t the case.
An employer will only advance us as far as it benefits the company. Complicating this is the fact that some jobs are static—customer service, administration and clerical jobs—no matter how well you do the job you can only earn so much money. Other jobs are relatively static; for example, an accountant working for a computer software company is only going to go so far, and it probably won’t be anywhere near the corner office.
In reality, how far we advance in both position and income depends mostly on us and that sounds eerily close to self employment. Think of yourself as self-employed and always be doing the following:
- Constantly improving jobs skills, even if it means doing so on your own time and at your own expense. They’re your skills, not the company’s!
- Taking on major projects that will raise your value to the company (and also increase your skills and abilities)
- Positioning yourself as an expert, even apart from your company
- Letting your company know that you want to be advanced by both income and position as circumstances warrant. In sales, this is referred to as “asking for the order”
We can never afford to be casual, assuming that the company knows best and will take care of us in due time. Like a business owner, we need to take action to make things happen.
Synergistic meeting fodder aside, you and your company are not “one”. That fact becomes painfully apparent upon receipt of a pink slip. No matter how long we’ve been with them, or how valuable we may be at the moment, all employment is subject to company financial condition. Should that go south, all bets are off.
Ultimately, it’s we who are responsible for our income security, not our employers. We do this by accepting that in reality we actually work for ourselves, even though we may be employed by someone else. How do we best manage that?
Think of your coworkers as you customers. Should your company cut you loose, your coworkers may be your best contacts, not only for new employment opportunities, but also as references. This will be all the more important if your employment terminates over less than favorable circumstances.
Promote yourself. Make an effort to get noticed (and stay noticed) by competing employers. Not only can this raise your “street value”, but your employer may recognize what’s obvious to its competitors and reward you accordingly.
Maintain networking connections. Do this on an ongoing basis even when it doesn’t seem necessary. Keep your contacts up to date, including and especially with former coworkers who have landed at competing employers
Diversify income sources. This is just as important to an employee as it is to a business owner, and may be THE single most important step to securing our incomes. Always be on the look out for- and ready to pursue- additional income streams. This can include part time work, contracting assignments or developing a side business.
Working for a company doesn’t mean you’re taking an oath of dependence on them. Give your company your best effort at work, but pursue your own goals off hours.
Financial security and planning
Just because you have a steady paycheck and a retirement plan at work doesn’t mean your that fiscal house is in order.
If you were running your own business—which you actually are, except you may only have one client at the moment—you’d need to make sure that you would remain financially liquid in a variety of circumstances.
This would require that you maintain at least three viable savings vehicles:
- A cushion of three to six months living expenses to cover either a rash of expenses or a short term disruption of income
- A stash of unrestricted funds to have available to put into high percentage investments, business ventures or other income opportunities as they arise
- Tax sheltered savings, such as your company sponsored plan, for longer term retirement planning
In the event that you lose your job, all of the financial concerns attendant to self-employment could suddenly fall on your shoulders. Are you ready?
If you were running your own business, you’d be facing financial and business pressures typically unknown by salaried employees, which is a big reason why everyone isn’t self-employed.
There are many things you don’t have to worry about when you have a steady paycheck, and that might breed certain behaviors that aren’t exactly conducive to survival in a less structured financial situation. Since we should always be keenly aware that just such a situation could be right around the corner there are certain practices we should be avoiding:
- Thinking more of ourselves than we should–none of us are irreplaceable
- Failing to be sensitive to the operating and survival issues of our employers
- Going into debt under the assumption that the cash flow to service it will always be there
- Putting all of your eggs in one basket, be it a career or an investment
- Failing to concern ourselves with contingency planning under the assumption that “my company takes care of that”; it may require having independent life insurance, disability coverage and other plans which won’t disappear with the loss of a job
- Mistreating or dealing less than fairly with people in both our professional and non-business dealings. Everyone is a potential client, personal reference or business partner!
A steady paycheck still affords a certain amount of insulation, but as we’re seeing in the past few years, the walls of that cocoon are getting thinner all the time. The lines between salaried employment and self-employment are becoming more blurred as employees have greater responsibility and less job security than at any time in a couple of generations.
Recognizing that you’re really self-employed is one of the best strategies to keeping your finances and your life on track in a business environment that’s changing all the time.
Still think you’re an “employee” because you have a steady paycheck? Or are you really closer to being self-employed than you generally admit to yourself?
This post is from FiscalGeek staff writer: Kevin Mercadante. I’m very excited to have him contributing to the site. You can find out more about him at his own blog OutOfYourRut.com.
( Photo courtesy of whoohoo120 )