How to invest in your career for better job prospects and a more secure financial future
Gone are the days when jobs used to fall in your laps. Now, you need to constantly prove that you are suitable even for the one that you have.
But what about the concrete foundation on which all these things are perched precariously? One solid blow to it and your house of cards could begin to collapse. Yet, our greatest asset-career-is the one that we ignore most often.
After all, bragging rights seem to be reserved for the best that our money can buy. A job is just another word for drudgery, and the only rapturous event in our work schedule is pay day. So, what have you done to ensure that you continue to get a pay cheque the next month or the months and years after that?
Gone are the days when jobs used to fall in your laps. Now, you need to constantly prove that you are suitable even for the one that you have. The only way to get ahead in your professional life is by constantly investing in your career. "Most people worry about their jobs, not their career. Jobs can come and go, but a career needs to be nurtured," says Sanjeev Parida, vice-president, HR, Tech Mahindra.
Even a tiny investment in terms of time and effort can help you reap rich rewards. The difference between the earning potential of a high performer and a poor one is a whopping 875% (see Returns from your career). Complacency at workplace will only earn you a standard increment of 5% a year, or worse, none at all. This is even lower than the prevailing inflation rate. So, effectively, you're becoming poorer each year. Not a very happy scenario, is it?
On the other hand, a high performer has a good chance of getting a 15% increment a year, since his employer will be keen to reward and retain him. It's obvious at first glance that he will earn more money, but the difference in the earning potential of the two over the long term, say, 35 years, can be a massive Rs 19 crore.
Even if both workers invest just 30% of their income every year in an investment that delivers 8% returns, the high performer will have a comfortable retirement corpus of Rs 13.14 crore, six times more than his lackadaisical colleague's Rs 2.39 crore. Enough of an incentive to start taking a more active interest in your career, isn't it?
What's the plan?
Now that you've woken up to how important an asset your career is, you need to start formulating a career plan. Set down short-term goals that you want to fulfill in the next five years, and long-term ones that you aim to reach in 10 years, 15 years and 20 years. Then write down what you have done to achieve these objectives or what you will need to do.
"Your career goals could be centred on learning, monetary benefits, designations and the nature of roles. A good way to keep track is to update your resume every quarter. If, for two quarters, you have no achievement to list, you're not adding value to the role or yourself," says Naveen Narayanan, global head, talent acquisition, HCL Technologies.
A lack of value addition will reflect in your work and no employer is going to reward you if your contribution at the workplace isn't satisfactory. "Most employees live in an assumption mode. They need to be realistic about their work and a candid appraisal provides a true picture of this. Use this feedback to understand how well you are contributing to the company," says SY Siddiqui, managing executive officer, administration (HR, finance & IT), Maruti Suzuki.
So, you may believe that you are slogging and sweating at the office, but the end-of-the-year result could state differently. Before you start screaming that people are out to get you at the office, understand that your appraisal is a clearer reflection of your performance as it measures your output vis-a-vis that of your peers. You may not be able to get a peek at their report card, but the salary hike is a good way of measuring how the company values you (see What your increment says).
In the current job market, where competition is high and lay-offs are just around the corner, you need to be proactive and more flexible at the workplace. Remember, rigidity is a sign of rigor mortis. So, be willing to take on extra responsibility, juggle your work hours a bit, face new challenges and learn niche skills.
More importantly, focus on the long term and keep track of the new developments in your field. If you want to remain relevant in the job market, you need to constantly reinvent yourself. "The skills that you require in your profession are constantly evolving and if you don't adapt, you'll become obsolete. There are thousands of people graduating from institutes every year, so you need to bring something different to the table," says Bimal Rath, founder, Think Talent Services.
Vaishali Gupta understood the need to widen her knowledge base when she started her career as an interior designer in 1999. "A few clients began asking me about vaastu. There was a fledgling interest, but I knew that this would deepen," says the 34-year-old. So, after three years of work and another three years of trying her hand as an entrepreneur, Gupta began studying vaastu science in 2005.
Over the next four years, Gupta built a steady reputation and client portfolio. In 2009, after her second daughter was born, she set up a full-fledged practice. "I read up on everything related to the subject, including pyramidology and astrology," says Gupta, who meets 2-3 clients every day and also offers advice on Shraddha TV. Her fee ranges from Rs 11,000-51,000.
IS YOUR CAREER ON THE RIGHT TRACK?
Like a financial plan, you also need to review your career portfolio regularly. Take this quiz to find out whether you're navigating correctly to reach your professional goals.
Are you happy with your latest appraisal?
A. Yes, it's favourable.
B. There are a few points I'm not comfortable with.
C. No, it's unflattering.
Have you received a good promotion in the past three years?
A. Yes, I'm doing better than my peers.
B. The promotion was in name only. Much hasn't changed on ground.
C. Isn't three years too less to get prmoted?
Have you achieved your current position within the time frame that you had planned?
A. I've beaten the clock.
B. I'm right where I thought I would be.
C. I'm supposed to have a career plan?
Is your salary appropriate for your level according to industry standards?
A. I'm well ahead of the pack.
B. I'm taking home a comfortable salary.
C. How do I check the industry standard?
Have you pursued any course in the past two years?
A. I attended a two-week programme on soft skills.
B. I've been reading a lot of books on different subjects.
C. Who has the time?
What percentage of your salary have you devoted to learning new skills?
A. About 10%
B. About 5%
C. Why should I waste money?
Do you handle some projects alone or is there someone always looking over your shoulder?
A. My boss trusts my work and only checks the end result.
B. I usually approach a senior colleague to help me out.
C. Why do people hover around every time I switch on my PC?
How often do your colleagues ask you for help?
A. I've helped out quite a few colleagues on various projects.
B. I've contributed to other people's work a few times.
C. I have lots of advice to give, but why should I make the effort?
How often do you propose ideas in a meeting?
A. I always have some ideas and a few of them even get implemented.
B. I usually have to rack my brains during a meeting.
C. I'm brimming with ideas, but the nincompoops refuse to listen.
Mostly As: You're really enjoying your work. You obviously have a well-thought out strategy in place and are intent on building a strong network by lending a helping hand. You're a keen learner and willing to put in effort to remain ahead in your field.
Mostly Bs: You're comfortable in your current job but are losing passion for your work. You're probably chafing at the bit and would like to experiment in another area. Make a list of the things you enjoy doing and see where your skills can be utilised best.
Mostly Cs: You need to revaluate your career. Fast. You're complacent about your work and on the way to becoming obsolete. You may believe that you're a good worker but the lack of work coming your way should be a wake-up call to straighten up things.
How do I reinvent my career?
To ensure better career prospects, you need to review your career portfolio at least once a year. Here's a three-point agenda to help you with the task.
Ask yourself, am I happy at my current post? What's my weakest point? Are my colleagues beating me in the rat race without breaking a sweat? However, don't jump jobs simply because you suffer from an itch. "Don't resign just because ‘something's missing'. No job can be customised to your requirements. If even 50% of the profile meets your needs, it's a good one," says Sunil Goel, director, GlobalHunt.
List what's making you unhappy at the job. Is it just the workplace, your career as a whole, or your own attitude? Can you improve the situation by tweaking your current profile? If your employers have been satisfied with your work, ask them for a department or even a location change, so that you can get out of the rut.
When you review your career, don't just focus on your own achievements, but compare it with your peers within the office and in the industry. Have they completed more projects? How are they staying ahead of the curve? You also need to take a hard look at the company and sector where you are working. Does your organisation encourage learning? Will the industry continue to do well in the next 10 years? If the future seems a little dim, start looking at other industries.
However, plan carefully before making a career switch or it will leave you floundering in the new sector. Most importantly, never be in a hurry. Vinay Unni waited for months before he switched from the hospitality sector to banking. The 36-year-old started his career as a management trainee with The Leela Group, Mumbai, in 1997. However, 12 years, a marriage and a baby later, Unni realised the working hours weren't conducive to a comfortable family life. "I was spending 12 hours a day and six days a week in the office," he says.
Opportunity knocked when a headhunter from Hong Kong asked him to join a bank for a pilot project. The recruitment process took three months, enough time for Unni to research the feasibility of the switch. "I spoke to friends in the banking sector to understand the challenges and growth prospects," says Unni, who is currently working as a branch manager at Standard Chartered Bank.
"It wasn't all smooth sailing after I picked up the reins as a branch manager. There was some fire-fighting, mostly related to core banking issues, such as an audit, but I've been learning on the job and am more confident after two years," he adds.
Updating your skills is the most important step. Whether you take a long-term sabbatical or pursue a part-time course, strive to learn something new every year. But choose your field of knowledge carefully. "If you're a chartered accountant, will doing an MBA be helpful or will it be beneficial to learn new technology, say an ERP financial module, which can be integrated well with the knowledge that you already have?" asks Goel.
When Noida-based Feroz Zaidi decided to switch careers from the printing industry to the software sector, he was confident of his marketing skills. However, he understood that he needed to upgrade his own knowledge if he didn't want to be caught unawares when clients began spouting technical jargon. "So, I pursued a course in software development from NIIT for six months to understand the basics of software development," says Zaidi.
If you believe you are a domain guru, widen the scope and learn a new hobby. "Try to develop a skill set that is different from your full-time job, so that if there's need, you can use it as a back-up career option," advises Parida.
Should I opt for a sabbatical?
A good way to make an effective career transition is to either enrich your academic profile or try your hand at another industry for a short time. If you don't want to leave the security of a job, begin by freelancing in the sector you have chosen or pursuing a short-term/part-time course.
"Most people leave it to their employer to train them further, which is incorrect. Apportion a percentage of your salary to invest in yourself, by pursuing a course or attending workshops and conferences. Work in at least one international programme, because if you want to succeed in today's world, you need exposure to various verticals and a global mindset," says T Muralidharan, chairman, TMI Group.
Mumbai-based Prasun Bhowmik kept all this in mind when he wanted to experiment after working as a consultant with Pricewaterhouse Coopers for three years. "I decided to study further, but couldn't make up my mind about which course to choose. So, I opted to work in a totally different sector and joined Teach for India, a non-profit organisation that provides education in low-income areas," says the 26-year-old graduate from the Birla Institute of Technology, Ranchi.
Bhowmik's salary reduced drastically from a starting pay package of Rs 6.2 lakh a year to Rs 13,500 a month, but over the next two years, it exposed him to the vast opportunities in the social services sector. However, to ensure that he wasn't financially strained and could steadily build an education fund, Bhowmik invested 80% of his PwC income in equity, lived with his parents to cut down rental costs, opted for public transportation and ensured personal expenses were only bare necessities.
"I invested about Rs 7 lakh in equities when the Sensex was fluctuating between 8,000 and 10,000 in 2008-9," says Bhowmik, who will be joining the Massachusetts Institute of Technology, US, this year. His savviness helped him earn 130% returns when he sold his stocks two years later.
However, experts advise that if your investment tenure is so short, it might be better to stay away from such risky investments. "You need to protect your capital, so you should invest in bank fixed deposits, fixed maturity plans or ultra short-term debt funds," says Jayant Pai, VP, Parag Parikh Financial Advisory Services. A big no-no is to take any type of loan.
However, if the aim of taking a sabbatical is to set up your own venture, you may have to make a few risky investments to earn high returns and build a substantial corpus.
"You should have a fund that can cover at least three years' expenses. One, it will ensure that you try hard and not give up if you don't succeed within two years. Secondly, even if you start making a profit within the first year, it will provide you the leeway to reinvest the money in the business rather than paying yourself a salary," says Kartik Jhaveri, director of Transcend Consulting, a wealth management firm.
If you're wary of taking such a big risk, take a leaf from Kirthana Ramarapu's book. After living in the US for 12 years and working there for half that time, when the 42-year-old mother of two returned to India in 2005, she wanted to be her own boss. But the risk of starting a business from scratch was daunting. She chose the next best option: franchisee.
"I wanted to work with children and had known about the Kinderdance programme while I was in the US. So, I approached them with the proposal of starting a franchise in Bangalore," says Ramarapu. Over the past three years, Ramarapu has extended the programme to 40 schools and 25 centres in the city, as well as franchised out to eight other people in Bangalore and Chennai.
Obviously, like every other asset you own, your career too needs to be overhauled regularly. Polishing it ocassionally and adding new accesories will ensure that you shine brighter in the job market.
What your increment says
Your current appraisal and resultant salary hike or promotion are the best barometer to gauge how good a worker you are. Here’s how to interpret your increment.
2-5%: We hope you realise that your increment is much lower than the prevailing inflation rate. Obviously, your employers aren't happy with your work and see no reason to be concerned about your welfare. Approach your boss and ask how you can contribute more. If possible, work with a senior colleague on a project to pick up tips on where you're going wrong and how you can improve.
6-9%: You're probably just plodding along at the workplace, one among hundreds who is churning out work, but not standing out. Remember, it's not just quantity that counts, you need to improve the quality of your work too. Identify your weakest point and work on it. Take a short-term course or request a colleague to review your work for a few weeks before you submit it.
10-13%: You're certainly a valued employee and the company is keen to reward you, but don't give in to complacency. Evaluate why you are a notch below and how you can catch up. Take on extra responsibility and start training junior colleagues on some aspects of your work. This shows your willingness to work and leadership qualities.
14% and above: You're obviously the brightest star and the company's reward is a clear indication that it would like to retain you for as long as it can. This gives you the bargaining power to choose what you would like to do. After all, you've already proved yourself in the current position. So, take up new challenges to expand your skill set.
The back-up plan
Whether you take a sabbatical or lose a job, be prepared for a financial exigency.
Contingency fund: Yes, we bring it up frequently, but it's importance can't be stressed enough. Always have a contingency fund that is equal to six months' expenses. If you're taking a long break, ensure that you can afford personal expenses without dipping into this fund. Think of it as a minimum balance that your bank insists on.
Health insurance: Never be without a health plan. Be religious about renewing it and don't just rely on your employer's health policy. Nothing can deplete your bank account faster than a medical crisis, so ensure that you and your family are always covered.
Life insurance: You may be sure that you will recoup the amount you're investing in your career, but what if you're not there any more? If you think a job loss is a financial strain, how will your family fare without you? So, buy a term plan to take care of your children's education and support your spouse throughout life.