Focusing on skills and personal finances will go some way to preserving your income in the years ahead.
Frequent news that technological advances, particularly artificial intelligence, will replace many jobs in the near future makes Australians uneasy. The fear of losing your income can cause stress and anxiety, but take some comfort knowing there are strategies you can apply now to protect your income-earning power.
In-demand industries of the future
The most reliable way to keep money flowing into your household is to have steady employment. Twenty years ago manufacturing and agricultural jobs featured heavily in Australia, but what industries are more likely to have strong job demand into the future?
According to the Australian government’s Job Outlook initiative, over the next four years job growth will largely come from the services industry including:
- healthcare and social assistance - including aged care
- education and training professional
- scientific and technical services.
Echoing this forecast, Centre for Future Work director Jim Stanford says while the landscape for future jobs in Australia will be different to now, some industries will continue to remain steady because they are an inherent part of the economy and provide services which are necessary for Australia.
“These industries will continue to be important sources of new work at least for the foreseeable future,” he says. “They include private-service industries such as the hospitality sector, and some business services like finance, but also public services.”
Stanford says the strongest sources of new jobs in Australia over the past five years have been in caring services such as healthcare, aged care, education, and disability support and this will likely remain the case.
Focus on your basic skills
There are some essential basic skills more likely to enhance your future employability and income-producing power. Rather than trying to predict a specific skill that may be in demand, Stanford says what needs to be encouraged are workers’ basic skills and building-block capacities.
According to Stanford this is because although we can predict which Australian industries are likely to experience job growth, it’s impossible to predict the precise high-level skills or qualifications needed to ensure employability down the track.
“People should be doing more in the areas of problem solving, verbal and written communication, and the ability to communicate and work in teams, as this is what employers will need and will also determine people’s ability to adapt to a changing world,” he says.
ANZ chief economist Richard Yetsenga adds technology is not necessarily the “job enemy” people believe it to be. He says the more you can incorporate technology into your role, the greater your chances of retaining work will be.
“But we should debunk the myth that people are unemployed because they got the wrong education or the wrong skills; that is not the problem," he says. "The problem with unemployment is the economy is not creating enough work for people and that represents a failure of macroeconomic management.”
Be better prepared financially
Considering what skills may make you more employable and being aware of Australia’s growth industries are important. Aside from employability, another way to manage risks to your income is to manage your money well, today.
ANZ’s Financial Wellbeing Report showed two behaviours – active saving and not borrowing for everyday expenses – contributed the most to a person’s overall sense of financial wellbeing.
The results also indicated having a savings buffer of at least $1,000 was associated with higher financial wellbeing. Aim for $1,000 in savings to begin with and then work towards a larger financial buffer for a greater sense of security. You can use ANZ’s Savings Calculator to get started.
Another strategy to help cope with change is to ensure you’re protected with income protection insurance. Income Protection can offer financial support in the event of serious illness, injury or involuntary unemployment. This type of insurance can provide a monthly payment while you’re out of work so you can stay on top of household expenses like, food, bills and the mortgage.
How long can you go without your income?
For a lot of people, if something did happen, they would find themselves in trouble pretty quickly. James Mathison looks into this for us.
Get comfortable with change
Understanding growth industries and the working skills desirable to employers is a good starting point to future proof your earning power. Creating financial breathing space through savings and income protection insurance can also help reduce the stress around an unknown future.
But as you navigate the changing world of work, being mentally prepared to accept and adapt to change is invaluable—in addition to protecting your income in all the ways you can.
“The only thing we know about the future is that it is not going to look like the future of today,” Stanford says. “From an individual’s perspective, choose something that you’re interested in and excites you, but don’t think a degree is going to protect you.”
ANZ’s Yetsenga agrees that when it comes to maintaining earning power, a mindset shift is required: “There is no longer any status quo around careers. You might be happy with your work and not want to change, but the chances are your job will still change regardless.”