The Illusion of The 9-5 Job Security
The #Zillow catastrophe is just another reminder that job security should not be the sole reason you avoid a freelance career.
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Last month, it was announced that Zillow planned to lay off 25% of its workforce. This decision was made as the company shut down its house flipping strategy.
Zillow has hundreds of millions of dollars invested in residential real estate that is now expected to be sold at a loss. This failed business decision will cost ~2000 people their jobs.
As I scrolled through LinkedIn last night I saw announcement after announcement as “layoff plans” start to become reality for many former Zillow employees.
The Fallacy of Job Security
I’ve talked to a lot of people about my freelance experience. Inevitably I’m always asked about money and job security.
The answer is always YES. I do have job security concerns but not any more than when I was a 9-5 employee.
There is a common fallacy that if you work for a company and perform well that you can never be replaced and that your job is safe. This simply isn’t true.
Zillow is just one example of a poor business decision/execution costing people their jobs. It doesn’t matter how fantastic these individuals are in their roles.
Zillow Today - Your Company Tomorrow?
The reality is that no job is secure and everyone is replaceable. Ouch.
We discuss the Zillow situation today but what’s to stop it from happening to your company tomorrow?
Zillow makes more good decisions than it does bad which is why they are valued at over 13 Billion dollars. This bad decision just happened to impact 2000 individual jobs.
Sometimes bad decisions impact a lot of people. Sometimes situations impact just one person. Bad leadership, horrible managers, a toxic culture, and or co-workers can easily put any one person's job in a position of risk.
The good news is that there are precautions you can take to help soften the risk.
Freelancing Can Give You More Control
Back to my chats with people asking about job security. As I mentioned previously, yes, I am concerned about my next paycheck. However, I take several precautions to help mitigate some of the risks - some you can also do as a 9-5 employee.
I’m a firm believer in an emergency fund. It was priority #1 when I went out on my own due to being laid off with the arrival of COVID-19.
The amount you need in your emergency fund will be dependent on many factors and the level of risk you are willing to take.
I personally have about 5 months of expenses saved for my family of five. If I lose all my clients or even get injured, the goal is that this would make life easier until the next chapter begins.
All businesses run a significant risk anytime a large percentage of their revenue comes from a single source. If you lose one stream of income it shouldn’t destroy your business.
This is the ideal situation and not a reality for many companies AND freelancers.
I’ve worked at companies that tried to abide by a 10% rule (no more than 10% from a single source) as well as a company whose department relied on one client for 80% of its revenue.
As a solo freelancer, my scale works against me. I still try to keep my revenue at no more than 25% across my clients/projects. I’ll talk a bit more about other precautions I take in the next point.
Do you know your revenue and or profitability numbers at your 9-5? Some at Zillow likely knew and about the house flipping failure and flew the nest before this announcement even was pushed live.
Diversify Services and Products
In another perfect world, we all provide multiple services and products. If one goes to hell then we fall back on the other solutions. Again, not the situation for many businesses and can be an even higher risk for freelancers.
Even before going freelance full-time, I freelanced on the side to provide a safety net to my 9-5 salary. Now that I freelance full-time I’ve invested time, money, and effort into affiliate sites. I also have a few advisory board and agency consulting gigs that help me further diversify my consulting revenue.
The takeaway? Further, diversify your services and products in addition to your revenue sources to help lower the risk of any one (or three) events sabotaging your 9-5 or freelance career.
There is No Such Thing As Job Security
Today’s post is a shorter one. The takeaway is to not be afraid of a freelancing career (or even a different 9-5 role) strictly due to the “security” behind your current job.
As we found from the Zillow example above, sometimes it doesn’t matter what we do. Our jobs are always at risk. My question to you is, do you trust your leadership with your job? If not, you may want to reconsider freelancing if the illusion of job security is truly your deal breaker.
If you are a company looking for new talent, please make sure to review the LinkedIn posts hashtagged #Zillow as a lot of fantastic talent is now available for recruiting.
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