This is a a slight fear of mine: that one day, I will wake up to a market that doesn’t want my skills any longer.
That being said, I would hope I am smart enough to watch for the warning signs and have an exit plan in place long before the market dries up.
It got me to thinking about realistic expectations of salary and being objective enough to stand back and say: Wow I really don’t have any skills that companies want.
My general philosophy has always been:
The job market determines what is important enough to pay top dollar for, not you
Disclaimer: This is not a slag on anyone or their jobs, or saying that if you earn a low salary you are useless or not deserving of a high salary.
I’m not trying to say that, I’m trying to see it from an objective, supply-and-demand perspective and to fashion out some general ground rules and philosophies.
You could be a wonderful painter, ceramicist, historian or even perfectly adept in one specialized software niche, but if no one (read: companies) want to pay for that, you are out of luck.
The reason why this came up is because I have a good friend who was laid off by her company last year. She has skills in a very specific software that doesn’t really seem to be in demand any more.
As she dug deeper, she realized that her skills in that software was actually more of a ‘nice-to-have’ or ‘bonus’ skill set if it was paired with another more in demand software.
As a standalone skill, it’s essentially worthless to companies. They won’t pay just for that skill, but they would hire you over someone else if you had the core skills that they want, AND that standalone skill.
But it’s just a bonus.
So when she puzzled that out, she was in despair. She wished she had branched out more in other areas and tried to transition to learn another software and to keep growing.
She picked up a job as an administrative assistant because she has nothing else (technical-wise) to offer, to stay in the IT industry. She doesn’t even have the proper skills to transition to the business side of what she used to work as. What she did was so technical, it can’t translate.
The only thing that worked to her advantage is that she is good at organization and planning, so the only company that offered her a job, making half what she used to earn, is where she’s at now — as an admin assistant.
When she called me, she lamented about how little she was making, about how she wished she had saved her money, paid down her debts and learned how to live on less.
Now it’s just a hard transition to learn how to live on much, much less, and figure out where she can grow from the job she’s holding now, into something more suited to her personality.
This made me come to my second conclusion:
Past salaries are not a defining factor in your future earnings
I know this sounds counter-intuitive. If you’ve ALWAYS worked for $40,000 and you are in the same industry, how can that change?
For me, it’s because of the following factors:
- Demand in general has dropped for what you do and they can’t sell your skills to other companies
- What others are making: More people are on the market & desperate enough to work for $20,000 not $40,000
- You were overpaid in your last job while the company was flush, but the job market has changed drastically
This is why having a finger on the pulse of your industry, reading up on news reports about how demand for what you do is growing or declining is so important.
Just because you’ve made $40,000 in the past, doesn’t mean you will make that forever.
You might make much less, or much, MUCH more, but that’s all based on other factors in your industry and environment, not on you per se.
Your past has no significant bearing on your future, in the same sense that you cannot use historical data from the stock market to determine how much you will make next year.
Just because a hedge fund did well one year, earning 500%, doesn’t mean they won’t lose their shirt the next year.
Sure, you can say: Well I did this job and earned $40,000. Now that I have 5 more years of experience, I can earn $50,000 because that sounds like a reasonable increase.
But nothing increases in a linear fashion. You have to look at the demand of the industry, the demand for your job, your hard, transferable skills and what others in your same position with varying levels of experience earn.
By the same token, you could earn $40,000 a year doing the same job, and $100,000 the next year because the market increased in its demand for your skillset.