At some point in life, it’s only natural to consider a career change
As humans, our priorities, expectations and desires can change over time, and the way we feel about work can too. Add in a global pandemic, and it’s no wonder that many Australians have been rethinking the meaning of work in their lives*.
While a change in career may be right for you, there are financial and lifestyle practicalities to consider and plan for, including whether your new career will pay your monthly bills and fit around your other responsibilities. Here are some things to think about if you’re serious about switching:
Road-testing your idea
One thing you can do when weighing up a new career, is to make sure you understand what it entails day-to-day. Looking from the outside in, you may have only been exposed to the ‘glamour’ side of the role. But are there downsides to consider, for example, a heavy administrative burden, weekend work, or late nights?
One way to take a look behind the scenes is to road test your desired career by securing some work experience. Using your immediate network as a starting point, you may be able to find a connection to someone working in your field of interest. Casual coffee conversations with the right people may land you with some good advice, a mentor, or even an opportunity for some unpaid work experience. Even one week’s exposure to a new career might be enough to do further investigation and road test whether it may be the right path for you.
Stress testing the numbers
Often, a change in career means taking a step down in seniority while you learn the ropes in your new industry. Being realistic on what starting salary you can expect is crucial in order to assess the financial implications of a change, and properly plan for it if you decide to go ahead. A good starting point might be searching for industry salary benchmarking reports from recruiters who specialise in the industry, or taking a look on job websites such as Seek or LinkedIn to see what level of salary your desired job is offering.
With the cost of living on the rise, it may be more important than ever to crunch the numbers. How would your household cope with a 20% drop in your income, for example? How secure is your potential industry and how would you cope if you were to lose your job? Do your medium-long term goals or current financial strategy need adjusting to accommodate a change in your finances? These are important financial questions to ask right at the outset.
Just as important is to consider your chances of securing your first job. Researching job availability and potential is crucial to assessing how long you may be looking for work. Government websites such as Jobs and Skills Australia, Labour Market insights or Your Career can be useful resources.
Looking at the practicalities from every angle
It may be that you’ve put in several years of study or gained significant experience to get to where you are today in your current career. What may be some of the requirements of your new career? Will you need to study, and if so, how will you manage this study (and the expense) around your existing work and family commitments?
And, when you’re in your new role, will the hours fit seamlessly into your family life, or will you need to make some adjustments. For example, if you’re thinking about becoming a teacher, you may need to be prepared to do some evening or weekend marking. If you’re considering a career in nursing, will you be prepared to work a changing roster that could involve night and weekend shifts? Could you handle a role where your physical presence was required, and flexible working was no longer an option? These are all important practicalities to weigh up as you explore a new career.
Planning your exit runway
If, after your research, you decide to go forward with a career switch, then you need to plan your exit runway. Your exit runway is your transition plan from your current career to your new one. It allows you the time (and money) to find your feet and get into full swing with your new career.
For example, your exit runway may include a plan for scaling down hours in your current job while you study or find part-time work in your new one. It may include having a lump sum amount of savings to support you during the transition, or while you look for a new job. How long your runway might be depends on your financial resources, family circumstances and your tolerance for uncertainty. Ideally, you may transition seamlessly from one career into another, but you need to be prepared that it may not happen this way.
Having a Plan B up your sleeve
Even with the best of intentions and groundwork, you may need to have a backup plan if your Plan A doesn’t work. For example, you may decide that your new career isn’t what you thought it would be. Or, you may even miss your old one and realise that it wasn’t a career switch, but a new job, you needed.
Once you cut ties with your current employer, it’s important to think about your options if you decide to go back to your current career, or if you want to keep looking for a new one.
This report is prepared by Bridges Financial Services Pty Limited ABN 60 003 474 977 AFSL 240837 (Bridges). Bridges is an ASX Market Participant and part of the IOOF group of companies. This report is prepared by the IOOF Research team for: Bridges Financial Services Pty Limited ABN 60 003 474 977 AFSL 240837, Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323, Elders Financial Planning ABN 48 007 997 186 AFSL 224645, Financial Services Partners ABN 15 089 512 587 AFSL 237 590, Millennium3 Financial Services Pty Ltd ABN 61 094 529 987 AFSL 244252, RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL 238429, Shadforth Financial Group Ltd ABN 27 127 508 472 AFSL 318613 (‘Advice Licensees’). The Advice Licensees are part of the IOOF group comprising IOOF Holdings ABN 49 100 103 722 and its related bodies corporate (IOOF group). The Advice Licensees and/or their associated entities, directors and/or employees may have a material interest in, and may earn brokerage from, any securities or other financial products referred to in this document or may provide services to the company referred to in this report. The document is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of the Advice Licensees. The Advice Licensees and associated persons (including persons from whom information in this report is sourced) may do business or seek to do business with companies covered in its research reports. As a result, investors should be aware that the firms or other such persons may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as a single factor in making an investment decision. The document is current as at the date of issue but may be superseded by future publications. You can confirm the currency of this document by checking the intranet site (links below). The information contained in this report is for the sole use of advisers and clients of AFSL entities authorised by the Advice Licensees. This report may be used on the express condition that you have obtained a copy of the Advice Licensees Financial Services Guide (FSG) from their respective website. Disclaimer: The information in this report is general advice only and does not take into account the financial circumstances, needs and objectives of any particular investor. Before acting on the advice contained in this document, you should assess your own circumstances or seek advice from a financial adviser. Where applicable, you should obtain and consider a copy of the Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before making a decision to acquire a financial product. It is important to note that investments may go up and down and past performance is not an indicator of future performance. The contents of this report should not be disclosed, in whole or in part, to any other party without the prior consent of the IOOF Research Team and Advice Licensees. To the extent permitted by the law, the IOOF Research team and Advice Licensees and their associated entities are not liable for any loss or damage arising from, or in relation to, the contents of this report. For information regarding any potential conflicts of interest and analyst holdings; IOOF Research Team’s coverage criteria, methodology and spread of ratings; and summary information about the qualifications and experience of the IOOF Research Team please visit https://www.ioof.com.au/adviser/investment_funds/ioof_advice_research_process.