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5 Things to Consider Before Switching Careers

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If you’re feeling like you’re not in the right career and perhaps it’s time to try something else, you’re not alone. In a 2019 survey of American workers by job-posting site Indeed, nearly half of the people they polled made a “dramatic career shift,” such as going from marketing to engineering. 

People change jobs for a variety of reasons – it could be economic or that interests have simply changed. Regardless of the why, it’s not necessarily an easy move. Matthew Atkinson, Global Head of Executive Assessment at Goldman Sachs’ Pine Street leadership-development arm, tells us he experienced this first-hand when he left a job in supply-chain management to follow his passion of business psychology. 

He says it’s easy to feel paralyzed when thinking about a jump. It’s because there’s more to this decision than simply not wanting to do what you’re currently doing. “People just don’t know what they’re supposed to do next,” Atkinson said. “They’ll say, ‘I don’t want to be doing this, but I don’t know what I want to do.’” 

So what do you want to do? That’s just one question of many you may need to answer before zeroing in on what your next career could be. We distilled our chat with Atkinson into five things to consider when looking for a new career path.

1. Consider more than the job

Atkinson says finding the right role requires more than just asking yourself what you’d like to do next. “It takes a lot of psychological work to get there because it’s an emotional decision as much as a rational one.” You first need to be mindful of how a new career will impact those to whom you’re closest. Any change to work schedules and finances can trickle down to your family. For example, the demanding hours of a new career could change the way you balance childcare and household responsibilities with your partner. Without considering these interconnections, the pressure of changing career will only be amplified by relationship stress. What it really comes down to, said Atkinson, is who you ultimately want to become. 

One simple exercise he uses to help executives envision this is to prompt them to pick a specific time in the future – two, five or even 10 years – and imagine where they’ll be. He’ll ask them to describe their surroundings, what they’re doing in that moment and who’s with them. Once they’ve made this scene as detailed as possible, he advises them to look it over from an outside perspective. 

All of these things provide valuable clues as to your ideal future and what you’ll need to achieve it. Maybe your vision is telling you, for instance, the reason you’re miserable isn’t actually your job, it’s your location. Alternatively, maybe it’s time to slow down, or to step on the gas, or to follow your true passion. Your interpretation of the whole scene will help define your goal.

2. Identify your strengths 

An important step in switching careers is being deeply self-aware. Said Atkinson: “People can be unhappy in their career without fully realizing why. Unused strengths and cultural mismatches can be major factors.” 

He often uses personality tests like the Hogan Assessments to develop a broad read on his client’s personality and strengths, such as whether someone is an extrovert or how open they are to new experiences. You might consider taking one or more such tests to see what your results say about you.

3. Decide how long you can give yourself

If your career move looks like it could cost you financially, it might help you to try to create parameters, like reframing the move as an investment and identifying your personal financial requirements.

For example, Atkinson said when he changed fields, he had a plan: “I took a 50% hit to my income, but I also set a 12-month limit.” I said, “If I’m not progressing in my new career by then, I’ll go back to what I was doing before. And I was confident I’d regain that salary. But once I made the change, I was happier, I was applying more of myself, I was doing better professionally and my salary increased.”

To help you create that sort of timeline, you could consider building a new budget, which will help you envision how long you’ll be able to sustain a lower income, potentially scale back on your discretionary spending and try to shrink any existing debt.

4. Keep an eye on taxes and retirement accounts

Changing careers can have a big effect on your taxes. If you’ll be self-employed, for instance, you’ll need to weigh the cost of self-employment tax. If you’re salaried at less than your previous income, you could be eligible for certain tax deductions or credits. Keep in mind any severance pay is still fully taxable. You’ll need to make sure enough taxes are withheld to cover this and any other taxes on payments resulting from accumulated sick or vacation time.

You’ll also want to consider how this move could affect your retirement accounts. See, for example, if your company’s 401(k) has a vesting schedule. If so, you may not be able to walk away with the match your company provided. Check with HR for details on your plan.

Be wary of cashing in your retirement savings: Withdrawing the funds early can mean paying taxes on every cent you take out. If you’re younger than 55 years old the year you make a withdrawal, you could also face a 10% tax penalty – although that fee will be waived for the first $100,000 you withdraw in 2020 if you’ve suffered financial hardship during the Coronavirus crisis, thanks to the recently passed CARES Act. Instead, you could consider opening an IRA account, which has similar benefits for your retirement planning but doesn’t require an employer to manage the funds.

5. Make yourself more marketable

You may be wondering whether you’re qualified to pursue your dream career. Going back to school for a degree or additional professional certification can certainly help in some fields, or even be mandatory for others. Sometimes a degree will help build credibility in your desired field, but may not be required. Be sure to research the qualifications for your dream job.

Regardless, said Atkinson, refreshing your resume is a must. This can be overwhelming when you feel like you lack experience in your desired field. But not to worry: Odds are more likely that your skills can translate to another job, Atkinson said. As you go through your career, you build a portfolio of accomplishments that showcase who you are and what you’re capable of, he explained. The trick is to reposition your past experience by using the terminology of the new field and highlighting what’s in common with the position you want. 

He also noted that it’s worth remembering that a cover letter is the perfect opportunity to sell the positives of your career move to a potential employer. “Having taken the steps to decide on your career move, you’re likely to be highly focused, energized, ambitious and committed. Above all, your professional accomplishments showcase your reputation,” Atkinson said. “Have confidence in the fact you’re hardly starting from scratch.”

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This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs®, but may not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.