Why working for yourself is the best job security

But among the tough lessons learnt this year, there’s one that was already evident to entrepreneurs, and is now apparent to everyone else.

It’s that the most secure job you’ll ever have is the one where you work for yourself.

The myth of job security

For years, we’ve been fed a lie that the most secure form of employment is working for someone else — preferably a large business or franchise.

I understand where this firmly entrenched myth comes from. Back in the 1930s during the Great Depression, our grandparents were doing it tough and the dream of a steady pay packet was akin to winning life’s lotto.

As the world emerged from that downturn, the catchcry was, “Get a job for life!”

“Work for an established business” was the sound advice dished out from once out-of-work parents to their children. It was all low risk/low return.

And then, as the years passed, people further expanded the idea of job security within the private sector. If you could lock in with a big company, you were certain to be looked after. You’d have a steady wage, reasonable working conditions and a modest pension on retirement.

But things have changed.

Here’s why I don’t subscribe to the theory that working for someone else is a sure thing in the modern era.

1. You’ll be poor in retirement

Your job might give you a sense of identity, and a work/life social circle offering companionship and collegiality.

It might also provide a regular income to help support you and your family.

But come the end of your working years, the money stops and what awaits those who haven’t made plans is little more than hovering just above the poverty line.

For older Aussies, it’s the pension which currently maxes out at around $470 per week. Barely enough to cover rent, food and utilities.

For the younger cohort, it’s compulsory superannuation that is supposed to be your saving grace, but most workers don’t add to super beyond their employer’s contributions (which are often factored into commission agreements anyway). If they’re lucky, they might leave work with a couple of hundred thousand in the bank that could support a modest existence for a few years.

In short, working for a company does not automatically deliver financial security in retirement.

2. Big companies go broke, too

Here’s another truth many workers try and ignore because it’s too stressful to imagine otherwise.

Big companies can go broke, too! That’s a tough lesson from this year.

Imagine all those people at Qantas and Virgin in December 2019 who were looking forward to a bumper year of travel and employment. How about everyone in high-street retail and hospitality?

Things move fast in this world now. The pandemic has upended the status quo and accelerated change. We have all transformed the way we consume, work and socialise, and any businesses that haven’t adapted have been left in a flailing heap, including big brands and multinational operations.

The same goes for real estate agencies. If you’re with a major franchise and things get tough, they’ll be looking to cut costs fast. In fact, if you’re commission-only, your pay packet is under threat every month depending on listing numbers and market performance.

Being with a big company doesn’t guarantee ongoing employment.

3. Society has changed

We live in a new world. The gig economy is upon us and freelancing is everywhere. Society on the whole has grown accustomed to small, specialist operators delivering great results without the need for covering massive running costs like premises rental. They’re scrappy, hungry and efficient.

Technology has made small operators just as powerful as large ones, and consumers are happy to do business with the best in their field regardless of who they work for.

In short, you don’t need to be employed by a company to build reputational status in your chosen field.

The primary advantage of self-employment

There is one thing that working for yourself delivers over and above anything else when times are tough — control.

Let me give you an example. I work with a large number of small businesses and independent contractors who run their own operations.

When the pandemic panic set in, they were, of course, concerned about losing income. But they could also control how their resources were managed. They could determine how aggressively they priced themselves in seeking new business. They could regulate how much income they took out of the business each week. They could pivot on their growth strategies or work to get government assistance.

And they could do all this without having to answer to middle management or an out-of-touch board of directors.

And you know what… none of them lost their jobs, because they are already the boss. There wasn’t a distant, faceless manager making wholesale cuts and major life decisions on their behalf all in an attempt to shore up some bottom line for shareholders.

The agents who started their own business with us were the same. They could decide how to distribute their limited resources, hustle and make it through.

Best of all, they’re coming out the other side wiser, more experienced and entirely capable of taking on challenges in the future.

So, don’t be fooled into thinking working for an agency is keeping you safe. In truth, the most secure way to achieve your goals is to work for yourself.

Dan Argent, UrbanX