Let's talk a little bit about wages.
I know, sensitive subject, indeed, one so taboo that most people, at least in the United States, tend to be more tight-mouthed about this particular subject than almost any other. Say that you're an analyst that researches the industry . If you're reasonably well known as an expert in your field, you can command $1,000 US for that analysis to the right company. That means that if you're on your own, you can just clear six figures ... IF you write twelve such analyses a month,
Now, that might not sound like all that much on the surface, but the reality is that you have to actually find customers that are willing to pay you for such analysis every month, and from personal experience, those analyses will require a week or more of research, a lot of phone calls and Zoom meetings, and a near-constant sales channel.
This consequently means that you also have to spend at least a portion of your time (say ten hours a week) on business-related calls, have to make a fair number of "free" calls just to get clients in the door, and have to take into account the time for bookkeeping, maintenance, and the like. Suddenly that three to four reports you're writing a month have to be done now not in 40 hours a week, but about 30 - or ten hours per report, doing nothing else. It's one reason why so many independent consultants can burn out so quickly.
Now, let's take that same person and put them on staff. They write 3-4 such reports a month, often with a considerable degree of support coming in from others in the organization. They are there in part because they are well-known enough to attract a following, which then flows up to the company. The work can be influential, but as to whether or not it really makes much of a difference to the bottom line of a company, that's very hard to measure.
The same can be said for the senior programmer, lead data scientist, or business analyst. Their value, ultimately, is not so much in the code that they write, but in their reputations, intuitions, networks, and experiences of what worked and what didn't. This is true of a great number of people in their fifties or older, especially but not exclusively for those that aren't specifically in key management roles. I tend to lump most of these people into the role of subject matter experts ... and they are about to become an endangered species.
Subject matter experts are those people who have accumulated significant knowledge in a field, and they are highly problematic for companies. On one hand, they usually have a wealth of knowledge, deep insights into problem domains, loads of experience, and are usually well known in their respective fields. On the other hand, they are expensive, likely do not immediately contribute to do-to-day operations, and typically lack the political clout within the organization to keep their jobs.
They are also old enough (typically in their fifties and sixties) that the likelihood that a competitor might snatch them up is comparatively small, particularly in the tech field where there's considerable pressure from younger experts who may not have all of the expertise but often may have newer technological skills that the SMEs are not as adept in.
Running a business always involves trade-offs, and one of those trade-offs tends to be whether you want expert skill sets at premium prices or adequate skillsets at much lower prices. When times are good, the premium skillsets do tend to pay for themselves. When times are not so good and the company in question is balancing between firing basic labor, subject matter experts, and senior management, the calculus becomes considerably more stark: you jettison the SMEs, and hope that you can hang on long enough that when markets improve, you can get younger, adequate talent at lower prices.
Every recession sees the same trends. It is illegal to fire people on the basis of age, but the penalties have been so watered down that these laws are seldom enforced. Typically companies will, at least at first, offer some kind of incentive package to quit, hoping to engender at least some goodwill among those older employees, but that usually also comes early in a business downturn. Once that window closes then the ax tends to fall (at least in the US) on older employees who are closer to having pensions, have higher healthcare costs, and often may also have some vesting in the company.
Europe has a somewhat different economic model, in part because age discrimination laws are more readily enforced. This tends to create companies that are more likely to be top-heavy with subject matter expertise but with comparatively fewer apprentice and journey-level experts. This can mean that it is harder for people to get into the fields, and innovation, which usually comes from the mix of different talents and skills, tends to become stifled.
As I write this, economic activity has dropped by more than ten percent in both the US and the Eurozone in 2020Q3, following a 3% drop in 2020Q2. In the US more than forty million people have lost their jobs in the last six months, with monthly consecutive drops of more than four million jobs. If by some miracle, a vaccine to the current Covid-19 pandemic is found before the end of the year, it is still likely to be well into 2021 before such a vaccine actually sees wide-spread distribution (and this would mark one of the fastest such vaccination discovery processes in history). Because of that, the economy will continue to erode for at least another six to nine months, even with a fairly optimistic timeline.
In the US, what this means in practice is that a significant number of the job cuts which are now happening (and will continue to happen) will most heavily hit older workers - those that are 50 and above. Not coincidentally, this cohort for the most part are not Boomers but GenXers, people who started out their careers in the 1980s and early 1990s at the very beginning of the explosion of the Internet.
So what happens to this population? In practice, my suspicion is that they are increasingly going into strategic independent consulting, teaching, and data journalism. Here's a little secret: not all businesses exist to become bigger ... indeed, I'm not sure the majority of businesses do. A significant number of businesses really are owned by a single person who sells their expertise and, perhaps more importantly, their experience and depth of connections. Occasionally, they may band together, but such consultancies act in much the same way that law firms do with the principles handing the most important cases and their associates either handling secondary cases or performing other actions in support of this goal.
You CAN make money as an independent consultant, but it requires that you shift the way that you think about work. You have to value your own time more, and you also have to be more picky about choosing your customers. This may seem counterintuitive to people who have received a steady paycheck most of their lives, but the reality is that most companies are not paying you for your skills when you are a full-time employee - they are paying you for your exclusive commitment to them.
Once you become an independent consultant, that changes. They ARE paying you for your expertise, and once they no longer need that expertise, they have no reason to keep you on board. They ideally want expertise transfer - they want you to educate their programmers so that they can do what you used to do or to educate their business people so that they get a better understanding about how to be more effective salespeople.
They also want your recommendations as an independent authority. This is especially true in tech journalism because most companies recognize the unfortunate reality that people do not put as much stock in a company's PR as they do in an independent journalist's endorsements. Unfortunately, this also comes at an ethical cost: paying for endorsements is a quid pro quo, and lessens the impact of the endorsement in the first place (or sometimes negates it altogether).
This is why becoming an authority, a data journalist, or a strategic expert in a field is so fraught with peril. The answer is that if you go this route, you also have to hold yourself to a higher standard. There are ways around this conundrum that are more ethical than pay for play but that still let you pay the bills.
For instance, you can become members of foundations or similar groups for advancing standards or promoting technologies. These don't necessarily pay as well, as working directly in the corporate sphere, but they often put you in contact with the movers and shakers in the respective industries and increase your network (and the possibility of other strategic engagements). You can also become members of corporate advisory boards: often these are seen as quasi-independent, and there are usually clear understandings that if you do advise a potential client about a company that you are an advisory member on, that you disclose that relationship.
You can also create podcasts, newsletters, or blogs, and either sell subscriptions or sell advertising (the latter is usually easier, the former, though, tends to be more lucrative if you can get a large enough pool). This takes time and requires consistency. I write at least one newsletter issue a week (such as this one), usually shooting for a Monday or Thursday release.
On a related note, you can also put together webinars, lessons, or presentations on YouTube, iTunes, and other similar media. This is actually a comparatively new option facing us graybeards and requires among other things becoming familiar with putting together effective media and presentations and learning how to be natural on camera. Additionally, these skills are becoming as important in the 21st century as learning to code was in the late 20th.
I think my experience is illustrative here. For quite a number of years, I tended to focus fairly heavily on programming and saw myself primarily as a programmer. Getting in front of clients for me was a painful experience, because while I could talk deeply to the code, what I wasn't doing was able to talk to the managers who were less interested in what the code was doing and more interested in how it would affect their bottom line. I had technical expertise, but I was a comparatively poor communicator, especially in person.
One day, I had a long discussion with a couple of mentors of mine, Wayne Applebaum and Casey Green, then both at Avalon Consulting, and I made a decision. I was going to write an article a week on Linked In. I learned from that how to write to a lay or lightly-specialized audience, what resonated, what didn't. I learned how to cut down jargon and find better metaphors. I learned how to vary my themes, and to keep the well from running dry. After a while, I reached 100 then 200 articles. This opened up an opportunity to write for Forbes for a little while, and also gave me more credibility. For me, the high point came when I attended a conference last year and found that I was quoted in not one but four different presentations.
I didn't become rich financially doing this, but it helped measurably in building up my contacts to the extent that other opportunities did come my way. I also learned some painful lessons along the way, two foremost - know yourself, and work with integrity. I'm not an artificial intelligence guru, and my programming skills are no longer quite so top drawer as they once were (and perhaps never were as high as I thought when I was younger), but people weren't coming to me because I was the best programmer or data scientists out there. They were coming to me because I could explain what the programmers and data scientists were saying and why it was important. They were coming to me for context.
Context is important, and in many businesses, it is often a very missing piece of the puzzle. I am all for machine learning and AI, they both have their places, but what neither can really tell you is what the lay of the land looks like: Who's doing what in the space? Who are the experts? Where is the expertise? What is a given technology useful for? What things are important to learn, and what's not? Experts write books, author white papers, create videos, not because these activities are all that profitable, but because such media teach the next generation what you learned.
I'm beginning to think that the old economy is breaking down even as the new economy is reshaping everything. Institutional experts - long term bureaucratic positions, professorships, corporate research fellowships, and so forth - are disappearing. The environment is becoming increasingly hostile to in-house subject matter experts in business, exacerbated by the coronavirus. At the same time, those same experts are finding more opportunities going independent, concentrating on the bigger picture, not so much because the money is better (arguably it's not) but because the reason that such experts become experts is that they have a passion about what they study, a passion which can translate into training, teaching and advising.
I'm also not so sure that longer-term this proactive effort won't pay off. The economy is not likely to immediately recover from the body blow that it took, but it will recover. Subject matter experts, "working old farts" as I like to call us, can provide the glue and cohesion to work across companies, industries, and governments, to mentor CEOs and CIOs and architects, to start giving forward the advice and help that we were gifted with when younger. In the long run, that's perhaps the biggest thing that matters.
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