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New Career Economy

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New Career Economy

  1. 1. Welcome Preparing yourself for the New Career Economy Presented by: Gus Iurillo www.TheESource.com/GIurillo
  2. 2. Data Sources for this presentation <ul><li>Empire Research Group study (engaged by The Entrepreneur’s Source) </li></ul><ul><li>The New American Workplace (James O’Toole, Edward Lawler, copyright 2006) </li></ul><ul><li>Going It Alone (Bruce Judson, 2006) </li></ul><ul><li>Wall Street Journal (Dec. 2008, Oct. 2009) </li></ul>
  3. 3. The Evolution of Work <ul><li>100+ years ago, we were all virtually self-employed in 3 primary careers: </li></ul><ul><ul><li>Farming </li></ul></ul><ul><ul><li>Craftspeople </li></ul></ul><ul><ul><li>Clergy </li></ul></ul><ul><li>With the coming of Age of the Industrial Revolution and the capital intensity required of business, we began to work for others </li></ul><ul><ul><li>Laborers (production) </li></ul></ul><ul><ul><li>Management </li></ul></ul><ul><li>The system evolved to promote people’s ability to join one or the other profession </li></ul><ul><ul><li>Technical/business schools/programs </li></ul></ul><ul><ul><li>Benefits designed to promote middle-class dream (pensions, health care, 40-hour workweek) </li></ul></ul><ul><li>Beginning in the late ’80s and early ’90s, things began to change…… </li></ul>
  4. 4. “ I never thought it would happen to me” <ul><li>In a government survey of how frequently workers are permanently dismissed from their jobs, the layoff rate from 2001-2004 reached 8.7%, or 12.3 million men and women age 20 or older </li></ul><ul><li>During 2008, over 2.5 million jobs were eliminated </li></ul><ul><ul><li>-Unemployment expected to rise from a low of 4.5% in 2006 to as high as 10%+ in 2009 </li></ul></ul><ul><ul><li>- That is the largest contraction since the Great Depression </li></ul></ul>Source: Bourne, J. You Are More Likely To Be Laid-Off Now, Than Anytime Since the Great Depression. 24 Aug 2004. http//forums.slickdeals.net. Ret 22 Mar 2006.
  5. 5. Fundamental changes are creating the “New Career Economy” <ul><li>Globalization and outsourcing reducing barriers to eliminating jobs that can be easily off-shored </li></ul><ul><ul><li>Internet and other technologies serving as enablers </li></ul></ul><ul><li>Quarterly market demands (Wall St.) provide little slack and short period to correct earnings misses, causing them to focus on labor cuts to placate shareholders </li></ul><ul><ul><li>- Recent debacle in the financial/housing sectors have had a ripple effect on the rest of the economy </li></ul></ul><ul><li>Companies now using force reductions as the norm to fine-tune the mix of skills needed to be successful </li></ul><ul><ul><li>Contract out jobs that are considered non-essential to core operations </li></ul></ul>
  6. 6. Lengthy unemployment can add to the uncertainty <ul><li>37% of employable people have been out of work six months or longer </li></ul><ul><li>The long-term share of total unemployment is expected to be more than 30% for the foreseeable future </li></ul><ul><li>ExecutiveTalent.net reports that senior (50+) executives make less money (18%) and spend twice as much time (up to 9 months) looking for replacement jobs than younger counterparts </li></ul>Source: Albietta, S. Unemployment rate and long-term unemployment continue to diverge . 18 May 2005. www.epi.org. Ret 22 Mar 2006.
  7. 7. People are working harder without realizing the benefits <ul><li>Most Fortune 500 companies have increased sales while reducing workforce </li></ul><ul><ul><li>Between 1975 and 2004, productivity increased 65% while median family income only up 22% </li></ul></ul><ul><ul><ul><li>One organization doubled sales while halving number employees over 5-year period </li></ul></ul></ul><ul><ul><li>27% workers feel often overwhelmed at work </li></ul></ul><ul><ul><li>25% report that work pressure is excessive </li></ul></ul>
  8. 8. Most incremental benefits accruing only to most senior executives in organization <ul><li>Between 1970 and 2000, average CEO pay increased from 39x average worker pay to 400X average worker pay ($10.8MM) </li></ul><ul><ul><li>CEO pay +571% during ’90s vs. 37% for average worker </li></ul></ul><ul><li>Majority of long-term compensation (stock options) also accrued to senior management: </li></ul><ul><ul><li>75% to CEO </li></ul></ul><ul><ul><li>15% (next 50 executives) </li></ul></ul><ul><ul><li>10% (everybody else) </li></ul></ul>
  9. 9. Executive survey indicates “loyalty bond” no longer exists <ul><li>Question Great/very great extent </li></ul><ul><li>Rewards tied to seniority 5% </li></ul><ul><li>Loyalty to company rewarded 16% </li></ul><ul><li>Outstanding performers job for life 27% </li></ul><ul><li>Nobody has a secure job 31% </li></ul><ul><li>Career development responsibility of worker 46% </li></ul><ul><li>Rewards ---  individual performance 60% </li></ul><ul><li>Employee loyalty and achieving company goals deserve employment guarantee: </li></ul><ul><li>56% (1989) ------  6% (1999) </li></ul>
  10. 10. Companies continue to slash health care benefits <ul><li>45 Million Americans have no health care – that’s 1 in 7 people </li></ul><ul><li>A recent Kaiser Foundation study found that nearly 80% of companies with 200 or more workers will increase the amount paid by their employees for health care plans </li></ul><ul><li>The Houston Chronicle reports that 72% of U.S. citizens work for an employer who does not pay their full medical insurance </li></ul>Source: Aeppel, T. Skyrocketing Health Costs Pit. Colleagues Against Each Other. Wall Street Journal Online. www.careerjournal.com. Ret 26 Mar 2006. Source:KaiserFamily Foundation Health research & Educational Trust, 2005.
  11. 11. The reward of progress? Longer work hours <ul><li>Americans have less leisure time, paid vacation, sick leave and less time with their loved ones </li></ul><ul><li>&quot;Workers in the United States are putting in more hours than anyone else in the industrialized world” - Lawrence Jeff Johnson, International Labor Organization chief labor market economist </li></ul>Source: Anderson, P. Study: U.S. employees put in most hours. CNN.com 31 Aug 2001. http://archives.cnn.com. Ret 15 Mar 2006. Source: American Time-Use Survey, BLS, 2004.
  12. 12. Pensions plans are becoming extinct <ul><li>Pension plans in America are seriously under-funded </li></ul><ul><li>50% of the pension plans in the country have been lost in the past decade, according to the American Benefits Council </li></ul><ul><li>The Pension Benefit Guaranty Corp. estimates that traditional &quot;defined-benefit&quot; pensions are about $450 billion short on assets </li></ul><ul><li>“ The American pension system is heading for a crisis, or maybe two” – Ellen Simon, Associated Press senior business correspondent </li></ul><ul><li>Only 34% expect to have enough to retire comfortably </li></ul>Source: Isidore, C. How private employers' plans took a hit, and the changes being proposed; is your money at risk? 17 Mar 2006. http://money.cnn.com. Ret 17 Mar 2006. Source: www.chartingtheeconomy.com, 2006.
  13. 13. Companies spend huge $ on training but workers not leveraging it effectively <ul><li>Companies spend $60 billion on training annually </li></ul><ul><ul><li>Much of the training is company-centric vs. career-building skills </li></ul></ul><ul><ul><ul><li>Only 29% workers believe management cares about advancing employee skills </li></ul></ul></ul><ul><ul><li>Only 18% employees take advantage of company-sponsored programs (e.g. Executive MBA programs, etc.) </li></ul></ul><ul><ul><ul><li>College degree offers 45% premium vs. HS diploma but real salaries for bachelor’s degree have been flat for last 5 years </li></ul></ul></ul><ul><ul><ul><li>Top 1% earners (i.e. advanced degrees) captured 16% income in 2004 vs. 9% twenty years ago (Wall St. Journal, 10/06) </li></ul></ul></ul><ul><ul><ul><li>People with advanced degrees have shorter durations of unemployment </li></ul></ul></ul><ul><ul><li>Over next 10 years, 96% of new job growth will require a bachelors degree or higher </li></ul></ul>
  14. 14. What does “career” mean in the New Career Economy? <ul><li>If you are a W-2 wage earner, you can expect: </li></ul><ul><ul><li>To have 6 to 8 job changes within a chosen profession in your working lifetime </li></ul></ul><ul><ul><li>To completely change your working profession at least 3 times in your life </li></ul></ul><ul><ul><li>Every time you change direction, you could fall farther behind! </li></ul></ul><ul><ul><li>70% Americans expect to work after “retirement” </li></ul></ul>Source: Dept. of Labor Statistics, 2000 ; USA Today, 2/9/04
  15. 15. How do you stay ahead in the “New Career Economy”? <ul><li>You need to adopt more of a “Free Agent” mentality </li></ul><ul><ul><li>Resiliency/pro-activity/skill enhancement need to become part of your lexicon </li></ul></ul><ul><li>Continue to develop skill sets and seek education that makes you more versatile, flexible and balanced vs. focusing exclusively on functional or company-specific skills </li></ul><ul><ul><li>Choose employers that offer substantial and flexible education and training benefits or develop them yourself </li></ul></ul><ul><li>Diversify your revenue streams beyond the “job” </li></ul><ul><ul><li>People can no longer count on a job as their only/primary source of income </li></ul></ul><ul><ul><li>Investments (real estate, stocks) as part of the solution </li></ul></ul><ul><ul><li>Business ownership as a career alternative; it’s now easier than ever </li></ul></ul>
  16. 16. Many workers long to have their own business <ul><li>56% workers dream of owning their own business yet, on average, only 5% ever do so </li></ul><ul><ul><li>67% don’t feel motivated to achieve company goals </li></ul></ul><ul><ul><li>50% feel disconnect with their employers </li></ul></ul><ul><ul><li>Only 40% trust their company to keep its promises </li></ul></ul><ul><ul><li>Only 20% feel they’re empowered to do their best work every day </li></ul></ul><ul><li>FEAR (False Evidence Appearing Real) holds back many from exploring this option </li></ul><ul><ul><li>Too risky </li></ul></ul><ul><ul><li>Too much money to get started </li></ul></ul><ul><ul><li>Afraid to walk away from company benefits </li></ul></ul>
  17. 17. Use outside resources (i.e. coach) to get you on the right path <ul><li>We haven’t developed the skill sets to navigate this “New Career Economy” because, heretofore, we haven’t had to </li></ul><ul><li>You need to understand the landscape and the rules of engagement before jumping in head-first </li></ul><ul><ul><li>What are your goals </li></ul></ul><ul><ul><li>Where do I find the best opportunities (answers are counterintuitive) </li></ul></ul><ul><ul><li>Someone objective to help you make fact-based decisions </li></ul></ul><ul><ul><li>Someone who can teach you “how to fish” </li></ul></ul><ul><li>Whether you like it or not, you OWN your career: </li></ul><ul><ul><li>You can either manage it to your success OR </li></ul></ul><ul><ul><li>Put your head in the sand/nose to the grindstone and hope for the best </li></ul></ul>
  18. 18. Self-Employed vs. Business Owner <ul><li>Take a hobby/pastime/functional expertise and turn into a business that revolves around them doing this activity (e.g. like to cook – start a restaurant) </li></ul><ul><li>“ Work in the business” - 60+ hours/week doing the actual work of the business </li></ul><ul><li>Generally don’t make it or wind-up scraping by on $30-60K year, if lucky, and no equity-build because they are the business </li></ul><ul><li>Wind-up hating what they do because they took a perfectly good pastime and turned it into something they “have to do” </li></ul><ul><li>Determine what activities they are good at/enjoy doing and find/develop a business that allows them to “do what they love” (e.g. like to work with clients – develop/find a great B to B concept) </li></ul><ul><li>“ Work on the business” – 40 or fewer hours/week driving strategy/fine-tuning the system </li></ul><ul><li>System allows them to generate 6-figure income, continue to grow as desired and build equity for long-term </li></ul><ul><li>Enjoy what they do because they create a system over time that aligns with their life goals (personal, professional, financial) </li></ul>Self-Employed Business Owner
  19. 19. Why use a business ownership coach? <ul><li>56% of corporate employees desire to own their own business but only 5% do on their own </li></ul><ul><li>The majority of franchises succeed but 35% of owners wish they had chosen a different franchise, after the fact </li></ul><ul><li>95% of our clients ultimately discover an option that they said they would not have considered on their own </li></ul><ul><li>9 out of 10 of our clients discover the right option from the 1st 3-4 concepts we present them </li></ul>

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