What is the risk in self-employment, changing careers, going back to college, a dead end job or a lateral move?

There is not much to fear from self-employment that doesn’t work out. Your career will suffer nothing more than a delay and employers will not hold your entrepreneurial effort against you when considering you for a job. Of course, going back to your former career becomes more difficult with the passage of time as your career skills and knowledge of developments in the field become rusty.

Going back to college is not a risk if you acquire technical knowledge usable on the job–electrical engineering, for example–or general business knowledge, as with an MBA. Otherwise the value gained may be less than what is lost by taking the time off from work.

The one exception is when one becomes qualified in an unrelated, but intersecting area. An engineer, for example, who earns a degree in law can move to their employer’s legal department and likely secure a substantial increase in compensation.

Changing careers is clearly a risk vs. reward proposition with outcomes ranging from completely unknown to relatively foreseeable. If the field in which you work is in decline (say, film-based photography), the lowest risk option is to leverage your existing skills to enter another field that has long-term growth potential, even if you must take a short term cut in pay.

When changing careers, the least risky move is one that leverages your most valuable knowledge and skills. An accountant who wishes to move into the nonprofit field would be well-advised to seek employment as an accountant or financial officer with a nonprofit, but seeking a position, say, in fundraising, public relations, or management would carry a much higher risk for failure and loss of income. Career risk is mitigated by having a fallback option whereby you seek re-employment in the field where your skills and experience are most highly valued.

Staying in a dead end job is like keeping your money in a safe deposit box–there is little risk of theft, but relative to funds deposited in an interest-bearing account, your asset looses value every day. Ideally, one avoids becoming employed in a dead end job in the first place, but for younger workers, a dead end job may be the best job available at the time a choice must be made. Most people solve the dead end job problem by moving on after several years when advancement in income and responsibility become less likely.

Making a lateral move is sometimes a better option than staying put. A job change which brings no immediate gain in pay or responsibilities is worthwhile if the new employer has significantly better growth potential and opportunity for advancement than the former employer.

Michael G Smith