World population is increasing. The number of full-time job vacancies is decreasing. Automation is reducing the number of lower-skilled jobs needed. Skills shortages will only get worse. Salaries and wages are not growing. Housing is getting unaffordable. These are some daily headlines that we are confronted with. What’s going on? Why do we need to worry about these trends? What can we do about it?
The Highly Competitive Market for Job-Seekers
According to the United Nations, the world population is estimated to increase from 7.6 billion in 2017 to 8.6 billion in 2030, 9.8 billion in 2050, and 11.2 billion in 2100. It’s no surprise that the International Labour Organization has said that the number of new entrants into the labor market will be increasing in many countries. Close to 40 million people will be entering the labor market each year. By the year 2030, the world economy needs to create close to 520 million new jobs in order to match the projected increase in the size of the global labor force. The International Labour Organization has warned that the growth rate of the available workforce shall exceed the rate of job creation. The total unemployment is estimated to exceed 201 million people. To make matters worse, McKinsey has predicted that by 2030, between 10 million and 800 million full-time equivalent workers will be potentially displaced by the adoption of automation. With the adoption of automation, employers will want more skilled employees to operate technologically advanced machines. McKinsey has also predicted that between 75 million to 375 million people globally will likely need to switch occupational categories by 2030, depending on how quickly automation is adopted in the countries where they live. On the state of our education systems, the U.S. Secretary of Education has said that “the factory model of education is the wrong model for the 21st century. Today, our schools must prepare all students for college and careers and do far more to personalize instruction and employ the smart use of technology. Teachers cannot be interchangeable widgets. Yet the legacy of the factory model of schooling is that tens of billions of dollars are tied up in unproductive use of time and technology, in underused school buildings, in antiquated compensation systems, and in inefficient school finance systems.” As a confirmation of this, research by The Foundation for Young Australians revealed that 25-year-olds are better educated and more invested in their education than ever before, but half of them can’t get a full-time job. Nearly 60% has tertiary qualifications, up from about 30% in the late 1980s. The U.S. Chamber of Commerce Foundation has reported that many of those looking for work do not have the skills required by businesses looking to hire, resulting in higher unemployment even as businesses desperately seek new talent. Let’s put this into context: From 1948 to 2000, jobs grew about 1.7 times over the rate of population growth. This means that there were more jobs available for people to dive into without any problems of finding work. But from 2000 to 2014, something has shifted. Instead, the population grew about 2.4 times more than jobs. This means that there are many more people going after fewer jobs. This trend will get worse and labor unions can’t do much about it. People are at a structural disadvantage more than ever before. With more competition for a limited number of job vacancies, there will be stagnant wage growth for many years to come.
Why do job seekers need to worry?
Whether we like it or not, these trends only show one thing: There’s a surplus of labor that employers do not want. You may disagree with the facts and figures presented above, but we cannot be complacent about the evidence from multiple sources showing a severe skills supply and demand problem. There are four things to note:
1. Increasing global population and immigration will only produce an increasing number of people looking for work to support themselves. When labor supply is more than employer demand, excess job seekers and workers will only be driving down salaries and wages, expanding the gig economy, and aggravating housing affordability issues.
2. Increasing automation and artificial intelligence is shifting employment requirements for higher-level skilled jobs that require technical college or university education to develop, deploy and operate high tech machines and robotics.
3. Faced with increasing digital disruption and severe business competition, employers and businesses are forced to focus on the short-term. They must quickly adapt to the competitive environment and compete by hiring specifically skilled workers who can immediately do the work without any form of retraining. Hence the growth of part-time and freelancing jobs and the decline of full-time employment and wage growth. To keep the cost down to survive, unproductive workers are terminated or restructured out.
4. Our current outdated factory model of education will not prepare workers to fully meet the work demands and the job requirements of employers. As universities are trying to justify their existence, workers are demanding just-in-time employable skills and experience at an affordable cost, rather than costly just-in-case unemployable knowledge. It has to come down to employability, cost, and duration of upskilling.
Here’s the thing. If you do not have the right education, qualifications, and experience that fully meet the demands of employers, then there is a higher likelihood that you will not get hired if you are a job seeker, or remain in employment for long if you are an employee. As businesses are desperately trying to cut or contain cost just to survive in competitive or severe business environments, employers are forced to hire skilled people specifically to do particular jobs on a short-term basis when they require them. Having skilled labor on a “stand-by” basis does not make good business sense. What we are seeing is that existing full-time jobs are constantly being restructured and decreasing in numbers. People who can no longer contribute or add value to the business will be terminated. They no longer have relevant skills to perform their jobs. The irony is this: Businesses are finding it difficult to find appropriately skilled workers who are job-ready to perform the work immediately when recruitment is on. They will maintain job vacancies even if they find it difficult to find qualified and skilled workers. In order for businesses to survive in competitive environments, they need appropriately skilled workers who are able to innovate and add value to their business immediately. With automation becoming more prevalent, businesses will require highly skilled workers who are capable to operate their high-tech machines.
Developing a Passion for Making Money
The secret is out: The authors of the research Implicit Theories of Interest: Finding Your Passion or Developing It? found that the usual advice to “find our passion” is flawed. From a motivational and expectation perspective, it was found that urging people to find their passion may lead them to put all their eggs in one basket, but then to drop that basket when it becomes difficult to carry. Discouragement will soon set in. They will lose interest altogether. Instead, the researchers found that it’s much better to develop a passion rather than trying to find something that is not there in the first place or maybe “elusive.”
To put the research findings to the test, I asked a group of friends about their passions. Most couldn’t clearly articulate what their true passions were. The reason to develop a passion must always start with our “whys.” Given that “how to make more money” (or variations of this) is one of the most searched terms on the Internet, we can safely say that people are desperately trying to earn or make more money just to make ends meet. We know that salary or wages growth is flat, the number of full-time jobs is decreasing, and unemployment rates for people in their 20s are rising. The need to survive or just to be able to pay the bills can be a strong motivation for people to find ways to make money for themselves. So, too, is the desire to be financially free. For some, the motivation to make more money is to bless others. Or it is to be able to support worthy causes that they believe in. Whatever your whys are to make more money, money is only the vehicle. It’s the means to an end. This strong WHY will ultimately drive and motivate you to develop your passion for making additional money for yourself. I have written about my whys here.
Given that you can develop rather than find your passion, why not start developing your passion for making money based on the things that you are already good at doing? There will be multiple benefits for doing so.
Job holders can get a head start by starting their side businesses.
Here’s the good news for job holders: You can future-proof yourself and increase your job security by starting a side business. Contrary to popular belief, job security is not dead if you want to future-proof yourself. In research from 2014 entitled Multiple Job Holding, Skill Diversiﬁcation, and Mobility, researchers found that individuals can use multiple jobs holding as a conduit for obtaining new skills and expertise. These additional jobs can be stepping-stones to new or better careers, even self-employment if they choose to do so. These jobs give economic security and upward mobility. What’s important to note is that having side businesses apart from just having regular 9-to-5 employment will give workers new or additional skills, knowledge, and expertise that will be immensely useful in the future. The acquired skills, knowledge, and expertise through having side businesses can give us diversity and security of income, increased job security, and a strong foundation upon which we can go for that dream job or do the things that we love. These side businesses are springboard jobs that could open up new doors and opportunities. When you have a 9-to-5 job, starting a side hustle is much easier from a financial perspective. There’s no intense pressure and stress to financially succeed to put food on the table and pay bills. Having a regular salary or wage will give you a temporary buffer until the next crises occur. However, complacency may set in. You may drift aimlessly. If you are really serious about developing a passion for making money and making a difference in other people’s lives, then launching a side business while having a regular job may be one great way to move the needle in the direction of developing your passions while acquiring new skills and experience for economic security and upward mobility.
Students, you can start developing your passion early.
If you are a student working towards getting that first job upon graduation, then having a side business while you are still in college or university can certainly give you a positive competitive edge over those students who don’t do anything apart from just studying. Having a side business or even just a part-time job at McDonald’s shows initiative, perseverance, and commitment. In addition to acquiring technical and business skills when you do have an online business, you are demonstrating positive behaviors and attitudes, as well as business acumen, that interviewers are looking for.
Getting that competitive edge over others for that first real-world job after graduation is so important when we consider the research by the Strada Institute for the Future of Work and Burning Glass Technologies. These researchers found that with the exception of some STEM disciplines like engineering, computer science, and a few others, if graduates started off working in jobs for which they were overqualified to perform, these graduates will have a higher likelihood of remaining in those underemployed positions for five years or more.
More than 40% of college graduates took positions out of school that don’t require a degree. These graduates are five times more likely to still be in such positions five years later. Ten years later, three-quarters of graduates who took jobs that didn’t demand a degree will still be in the same spot. These graduates will be earning around $10,000 a year less than their counterparts who started in jobs that required college degrees. What’s interesting is that more than 1 in 5 college graduates still aren’t working in degree-demanding jobs a decade after leaving school. It’s no wonder that many students are saddled with huge college loan debts for the rest of their lives because they cannot earn enough to pay them off.
Job seekers, there’s a solution to your worry.
If you are looking for a job, starting something small while still trying to find another job during this transition period will definitely help you keep up with what’s happening, maintain your connections, acquire new skills and knowledge, or just maintain what you already know professionally. Staying at home doing nothing productive will not help you secure your next job. One of my friends drove for Uber just to maintain his cash flow after he was retrenched from a full-time job. In comparison, another friend of mine just goes daily to McDonald’s when his children are at school, searching job sites and applying for jobs online throughout the day, hoping and praying to land that elusive job. If you were a recruiter, which of the two would you consider favorably? Just showing initiative does go a long way!
Find a Business Idea and Make it Work For You
You may be thinking: How does one start a side hustle when you don’t know what you’re passionate about? When you have decided to embark on a journey of entrepreneurship or freelancing, you need to find a business idea that sells. Here’s a seven-step process to explore some suitable business ideas, selecting that one idea that potentially sells, and making that idea work for you. In the process, develop your passion for helping people with your business idea.
Step 1 – You brainstorm and select your proposed business idea from a comprehensive list that I have compiled on https://allmoneymakingideas.com. Get your creative juices flowing
Step 2 – Develop an overall strategy for making money. This step requires you to determine your money-making criteria and meeting those criteria. You will need to update your strategy as you gather more information. Remember that people don’t plan to fail, they fail to plan.
Step 3 – Acquire or develop a product (e.g., e-Books, tools, coaching services, training, etc) that will help solve your target customers’ problem. The aim is to sell a relevant product to your customers and make money. Test out your proposed product by converting it into a minimum viable product.
Step 4 – Identify the best platforms and established marketplaces (e.g., eBay, Facebook, blogs, etc.) where the majority of your target customers hang out so that you can sell them your proposed product.
Step 5 – Validate your minimum viable product with your customers using these established marketplaces.
Step 6 – Work hard to market and drive Internet traffic to your chosen platforms so that you can convert your visitors into leads and thereafter transforming them into paying customers.
Step 7 – Depending on your testing results, you could scale-up selling this product on your own website, find another new product to sell, or ditch the product altogether.
Don’t follow the advice of many gurus. That is, to have a website first prior to vigorously validating your money-making idea and minimum viable product. Always get your money-making idea validated first by your customers before spending any more time, effort, and money. This will increase the likelihood of your long-term financial success using this risk-free strategy. It will reduce or minimize your financial exposure while preserving your investments in low-risk activities.
Always Have a Strategy
Whatever pathway you select to start your business, you should always think about drawing up your own strategy to make money including plans to execute the strategy. I am always reminded of a passage in Alice’s Adventures in Wonderland (chapter 6). It nicely captures the reasons why having a sound strategy is so important: “Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat. “I don’t much care where –” said Alice. “Then it doesn’t matter which way you go,” said the Cat. “– so long as I get SOMEWHERE,” Alice added as an explanation. “Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.” I have learned that developing my strategy as early as possible will focus my efforts to do the things that matter most and to earn an income in the future. I am always reminded of this quote by a successful online entrepreneur: “I initially failed in my quest to create a sustainable second income, simply because I didn’t have a clear strategy in mind. I didn’t follow a clear system. I did everything that everyone else seemed to be doing but I didn’t really know what my main goal was. Thankfully, now I do. Even better, I now know how to focus on my chief objective and more practically secure my present and future financial prosperity.”
Your strategy selection will depend on many factors like:
- Your desire to succeed, including time and commitment that you are willing to put in.
- Your personality and interest
- he audience that you are writing for and selling to.
- Amount of money or savings you have to finance your strategy.
Having a sound strategy to start a business and make money will be the key to developing your passion to help people at the same time.