It is no secret that the fund management industry has been under siege of late. Flip any newspaper that covers the financial services industry and you will see how active managers are finding it harder to justify their management fees, while fending off criticism on their inability to produce returns in excess of the benchmark. Banks are letting go of their employees to lower their costs from shrinking top lines.
With that said, certain sectors within finance have been more insulated than the others when it comes to layoffs. Having been on the buy side, I can attest to this. But I recently heard about the newest round of layoffs from a company I worked for previously. To my knowledge, they have never had to reduce their headcount here in the Singapore office. Up till now.
I had thought that people working there would be very safe against the usual banking-style hire and fire cycles. But it seems like business conditions have become so dire that they have no choice but to cut costs this way. It is yet another reminder to myself that there is no such thing as job security – even in workplaces where you think you can park yourself till retirement comes.
It also reminded me that we cannot rely on having just one source of income. The traditional “iron rice bowl” concept just doesn’t exist anymore. I do acknowledge that there are still companies that have many employees hanging around till they retire – and congratulations if you are in one of them – but for most people, that idea should no longer exist in their minds. Even so, most people still stick to having just one source of income i.e. their jobs. What happens when the axe falls?
I am big believer in diversifying sources of income. There are many ways to do this. Investing (be it stocks, bonds, funds, property etc) is one good way to achieve this. But doing so requires you to put up quite a large sum of money upfront. To those who do not have so much spare cash lying around, it can be difficult to start.
But there are so many other things that one can do to diversify. Starting a small project on the side that doesn’t take up too much time is a good way to dip your toes into the water. If you have a skill or knowledge that you can leverage on to earn extra income, why not? So many people talk about being disengaged from work. If they were to tap into their existing pool of experience and knowledge, and harness it to generate some spare cash, who knows what that could bring in the future?