Yahoo Finance 4 Ways to Protect Yourself From Retrenchment in Singapore
Recently, a friend of mine who’s been working at a bank for more than 10 years told me she’s been thinking of alternative career plans in case she gets retrenched.
She’s in her mid-thirties and has already been retrenched once, after which she managed to a job with her current employer.
But she insists that should she be retrenched again when she’s older, she might be forced to give up her banking career for good.
Whether you think she’s exaggerating or has good reason to be afraid, middle aged PMETs have been some of the biggest casualties of last year’s spate of retrenchments. This group of employees finds it hardest to find jobs and replace their lost incomes, with many giving up and abandoning their previous careers.
If that’s the future that awaits us in our careers, what can we do to make sure we don’t go under? Here are four ways all Singaporeans should protect themselves from the possibility of retrenchment.
Have a Plan B
Whether you love or hate your job, there might come a time when you can no longer do it. If you’re unlucky enough to be a middle aged employee who’s more expensive to hire than young punks in their 20s and 30s, it’s highly possible that your first job post-retrenchment will involve your taking a huge pay cut or be completely unrelated to your previous area of expertise.
That’s why it’s important to have a Plan B. Build up your interests and competencies in areas outside of your day job so that you’ll have other options if you get retrenched and don’t manage to replace your job.
For instance, if you’re a project manager in the IT field, don’t let your technical skills get eroded just because you’re now in management, as in the event of retrenchment you might need to look for a job lower down on the ladder.
Skills totally unrelated to your career can be just as useful. If you’re a good pianist, keep your skills sharp over the years and consider getting a diploma so you can teach piano on a freelance basis if you lose your job.
Live well below your means
Middle-aged PMETs have such a hard time dealing with retrenchment partly because many have signed up for hefty financial obligations such as car loans, mortgages, their kids’ education costs and so on.
It’s ironic that those with higher incomes are made out to be suffering more than those with less.
As a decently-paid employee, if you inflate your lifestyle to the point that a few months of employment will make you crash and burn, you have only yourself to blame.
It baffles the mind that this 48-year-old former senior banker, who used to earn $14,000, was desperate enough to work as a dishwasher after being retrenched. With an income that was more than 3 times the median salary, he could have built up a healthy amount of savings and investments over his banking career.
Know that a good salary can be taken from you at any time, and plan your finances accordingly. Live well below your means and save and invest wisely, so that if you’re retrenched in your 40s or 50s you’ll be in less of a panic to do any old job just to stay afloat.
Diversify your income streams
Letting your job be your only source of income spells disaster if something should happen to your employment status.
But finding an alternative source of income takes time. That’s why it’s important to start diversifying your income streams when you’re young and have time on your side.
For instance, if you wish to gain income by buying dividend-yielding stocks, it could take you years to build your portfolio up to the point where it becomes a decent income source. Starting early will enable your portfolio to grow. You want to aim to have passive income that can cover your monthly expenses by the time you hit middle age and are most vulnerable to retrenchment.
Your alternative income might also come from a side business or freelance work. Whether you wish to become a supplier for products sourced overseas, give tuition on the side or publish information products online, start planning as early as you can.
Keep yourself up to date
Some folks get retrenched simply because they’ve become obsolete, and younger, more tech savvy employees are able to do their jobs for less.
To be fair, this isn’t the case for everyone—there are many who simply become casualties of offshoring or restructuring.
But if you allow yourself to fall behind your younger colleagues, you are making yourself a prime target for retrenchment. To prevent that, always ensure you’re up to date on developments in your industry and that your skills remain relevant.
Often, when you’re in a management position, this could mean having to pick up skills that are usually delegated to your subordinates, or skills that your younger colleagues have that you’re lacking. For instance, middle-aged marketing professionals should familiarise themselves with the technical aspects of digital marketing and social media, which weren’t present when they started their careers.
So use those SkillsFuture credits and take it upon yourself to ask to be sent for courses and actively learn from colleagues, even if you’re at the stage where you can delegate much of the grunt work to others.
How vulnerable do you think you are to retrenchment in your line of work? Tell us in the comments!
The post 4 Ways to Protect Yourself From Retrenchment in Singapore appeared first on the MoneySmart blog.
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