Navigating External Events: Risks and Opportunities for Your Career

AI, overinvestment by the hyperscalers, war in Iran. Do these impact our jobs?

Trends in politics, economy and industry - all create both risks and new opportunities for employment.

Understanding the likely impact of macro trends will help you manage your career, mitigate risks and open paths for new professional opportunities.

Economic

Recessions, as we experienced in 2008 – 2009 and during the Covid shutdown, trigger layoffs across industries as costs are aligned with the slowdown in business.

Job impacts are highest in sectors which have been overinvested in disproportionate to future growth outlook (housing, retail and retail banking in the 2008 recession).

This is also the risk when the AI hyper investments start to taper off (or down). We have already seen this the past some years in the layoffs with the hyperscalers as the YOY cloud growth has slowed.

Job creation tends to rebound after recessions as the economy starts to expand as in the decade following the 2008 recession, and again in the 4 years post Covid. The job expansions occurred in sectors with greater contemporary relevance. In the past cycles it was healthcare, homecare, e-commerce, logistics, AI, social communications, & cloud. The next one could be new sectors and health, and home care are evergreen as our populations age.

While a recession is painful if your job is impacted, it is also an opportunity to repurpose to alternative jobs and more future proof careers in skills and industries which are growing (AI themes, predictive analytics, logistics) or better aligned to demographic trends (healthcare & home care, leisure and travel, wealth management).

Political

Legislative actions impact employment, both positively & adversely.

Introduced in 2010 to regulate the banking sector, the Dodd Frank Act negatively impacted jobs in trading across asset classes. On the flip side, it led to a surge in jobs employed in identification, reporting, and management of process compliance and risk management.

In the same year, the Affordable Care Act led to enhanced enrollment in health plans and job opportunities with the health insurance companies. More recently though, the aggressive posture on public healthcare being advocated by the incumbent president must be giving health insurers a reason to be cautious about their investment plans and job additions.

Conflicts

Wars (physical or trade) create strife and uncertainty which negatively impact investments & employment in the affected regions.

The shrinking local investments in the Middle East region during the Iraq war.

On the flip side, wars also create opportunities and jobs.

Like all wars, the war in the last conflict in the Middle- East was a boost to defense companies and contractors, and jobs with them.

The tariff war triggered by the USA against its trading partners has impacted employment across export led industries outside the USA.

On the other hand, it has pushed countries to enhance self-reliance in defense to strengthen both local manufacturing and national security. Also driving supply chains and manufacturing are closer to consumers. All of these create new jobs.

Defense and security equipment and services will be beneficiaries from the new conflict with Iran. It will also add momentum to local defense production (and jobs) by countries across the globe.

Industry trends

The rapid growth in e-commerce led to retail store closures across the USA, and the shrinkage in jobs employed by them.

It also triggered a boom in investments and hiring in the logistics and distribution sectors. A study published by the Wall Street Journal cited that the total number of warehousing jobs created in a decade exceeded the job losses in retail stores.

The adoption of AI is automating many routine tasks and eliminating the need to have humans perform them.

On the flip side it has created a boom in jobs in data center construction, energy production, distribution, and the entire manufacturing sector which supports it.

Outsourcing and automation

For tasks which are performed by similarly multiple companies (e.g. payroll, accounting, infrastructure monitoring), third party providers like ADP, Hewitt, AWS, and TCS will build scale and processes to deliver these same activities at more competitive levels of quality and efficiency.

If employed in these job functions, your job is at risk of getting outsourced. It is also an opportunity to find employment with the outsourcers and potentially build an even better career in your field of work.

 If your job is a candidate for consolidation, work for the consolidator.

Similarly, if your work is repetitive in nature, be aware of the risk of automation. Which is also an opportunity to reskill into emerging and less structured work – giving yourself a new set of skills and more longevity to your career.

You might want to also read – Are Outsourcing/automation a risk to your job

The impact of your own professional actions

Just as events outside our realm of influence create opportunities and risks to our jobs, so do our own actions and behavior in the workplace.

Job Performance

Delivering on the goals and objectives of a job is essential. Doing well on them gets professional recognition and opens avenues for career advancement.

Equally important, putting in best efforts to meet and exceed goals is essential. Those seen as giving their best will always be appreciated and even cut some slack when they falter on goals.

On the flip side falling short creates a risk to continuing employment.

It is an opportunity to reflect on how to skill up, work harder and raise the bar of performance.

It is also an opportunity to assess if the current job is best aligned with your skills and interests. And if not, how to repurpose and redirect into a role closer aligned with skills and interests and where your job performance will be better.

Cultural alignment

Every organization has a work culture. In some, being seen as putting in long hours is the norm. In others, the hours you put in are less important as the results delivered.

Alignment with the culture makes you one of the team and can open up opportunities for career enrichment.

A lack of cultural alignment, on the other hand poses a risk of being seen as an outsider, less likely to be considered for important assignments.

Relationships with colleagues

Collaboration, and good working relationships with colleagues, and with your immediate supervisor, can both facilitate job success and advancement. (Check out – What are your professional assets).

All things being equal (and sometimes even being unequal), the person the group wants around will most likely be the one who stays on the job, gets the better opportunities, and succeeds.

And if the relationships are not working out – take it as an opportunity to explore newer pastures

In closing

Jobs and careers are often affected by macro events which are outside our realm of influence.

These could be political, legislative, economic or industry events and trends.

Keep a watch and be aware how these macro events can impact your job.

These may bring new opportunities into your existing area of work – or create opportunities in new and growth sectors.

Keep swinging!