Income & Employment Risk

I happen to be lucky enough to have secured a full-time job after graduation, so I’ll be thinking about the topic of reducing income risk retrospectively.

I’m in a major (actuarial science) that trains students for one specific career path (being an actuary). As a result, there’s a defined set of actions students can take to make themselves more attractive to employers when they’re looking for full-time employment. There are some things that students can do that relate to academia that make them more eligible candidates – getting good grades, passing actuarial exams, adding another major or minor, and taking coursework that relates to the skills used on the job. There are also things students can do that don’t relate to academia – taking leadership positions in organizations, working actuarial internships during the summers (and if you’re lucky, during the school year), and developing interpersonal skills. In addition, if a student is interested in working for a particular company, it helps to get to know the recruiters for that company through attending the presentations they do on campus and through talking to them at our annual career fair.

I’ve been working toward getting a full-time job since my freshman year. I went to all but 2 of the many company presentations offered during my first semester, and started my first actuarial internship at the start of my second semester. Throughout my time here I’ve continued to attend presentations and talk to recruiters at companies, even if I wasn’t interested in them at the time. I’ve also worked to pass actuarial exams and keep my grades up, as well as adding majors and minors. All of this effort was at the expense of free time, meaning that I chose to do something that would help my future career over something that seemed like a better option in the moment. So, I was very risk-averse with regards to my future employment.

I would like to note, however, that my main motivation wasn’t reducing income risk, but reducing job satisfaction risk. Actuaries overall are well-paid, so my main goal was to ensure that when I got to the point of looking for full-time employment, I would be able to work in the position that I would enjoy the most – not necessarily the one that paid the most. My perception of what I would enjoy the most changed over the course of my education here, so I was very glad that I’d talked to companies during my freshman and sophomore years that I wasn’t interested at the time but became interested in later.

Most people do not use my strategy, and for good reason – it’s incredibly time consuming and most people strive for more work-life balance than I do. For these people, there are some times where doing something they want to do now is worth more than doing something that might or might not help them in the future. The outcomes are varied – some are able to secure a full time job without a problem, and some graduate without finding employment in the actuarial field. From what I’ve observed, though, the more effort someone puts in and the longer they’re actively improving their qualifications, the better chance they have of being where they want to be after graduation.

From this, we could infer that the more risk-averse a person is with respect to their future employment, the more they would actively participate in recruiting activities and improve their skills. If a person was alright with taking on more risk (or if it wasn’t a top priority), they would spend less time working to make themselves as employable as possible. I happen to be very risk-averse, but different approaches are appropriate for people with different preferences.