Are there any good metrics an employee can calculate to determine job stability, and the pressing need to look for other work

Question

Are there any good metrics an employee can calculate to determine job stability, and the pressing need to look for other work.

In a personal finance course I recently came across the notion of income commutativity and income volatility. The former is akin to what I'm asking about, but not the same. I've also come across employability ratings and such.

But it got me thinking about how I can decide of my current job, given my time served, rank and position, pay compared to others, my credentials, productivity, reliability, the current state of the market, the industry, etc., whether or not the employer is looking to hire or looking to cut hours, etc. How can I factor this in to decide of my job is stable or if I should be beginning to look for work elsewhere.

It might seem rather convoluted but a lot of the metrics in a personal finance course usually are. The teacher doesn't know of anything that fits my bill, but if any of you do, please. It doesn't have to be a super accurate rating, just something semi-empirical from which to base certain financial decisions.

Definition: Income commutativity is basically a measure of your ability to get a new job of equal or greater pay. Income volatility is essentially how unreliable your take home is, if fluctuates a lot. I've come across a few employability ratings, including how long it takes to land a new job of equal or greater pay. These aren't all defined consistently either. Not really relevant. I'm trying to measure how stable my current employment is

Answer 1

Focus on the risk to your job role/category

All sorts of factors go into determining how stable your specific job is that it would be difficult to create a formula or even get reasonable numbers to put into the formula. I actually had a discussion with a stats prof at a hackathon over modelling this and this is where he pointed me. Remember, risk is a probabilistic thing and the smaller the system, the more it can be impacted by out of the blue random events. You boss could get hit by a bus one day and replaced by someone's nephew who wants to bring in his siblings.

The key question is not whether you need to be looking for work but whether you can obtain new work easily. It is extremely unlikely for a random event to repeat itself through a job category.

What you really need to be concerned about is the "income commutativity" you talked about. Focus not so much on whether this one particular job is risky, but whether it and similar jobs are risky. That is something you test relatively easily.

If you are a rather generalist full stack software engineer like myself, you might just send out resumes periodically or dump them on resume sites. A bit annoying dealing with recruiters as they can come in waves, but it gives you a sense of where the market is for your skills and they do the work for you. This would probably work in any case where you as an individual are not that particularly special, there are thousands of people like you, and thousands of jobs you can plausibly take that fit your current income range. Your metric can be how often a recruiter comes along or what percentage of your applications get a reply. I also force myself to have a call with any recruiters that come along, as they have a good sense of the market.

That will give you a sense of what demand there is for your skillset, how easily you can get an interview, whether the marketing is weakening or strengthening, etc.

Not sure how you can do this if you are more specialized and at a skill and experience level where there are fewer positions, but that would be a good question to ask on here.

Answer 2

Your question has a major flaw. Job stability is not something calculated with 100% objective data.

For example, nepotism will give you more job stability than advanced degrees, and that's not something you can necessarily "gain" in the traditional way like a skill or a degree.

Conversely, if you have a skill that an employer needs, but he hates you, your stability goes down because your job stability is heavily influenced by how much your boss likes you. An OK employee that a boss like will be more stable than an excellent employee that a boss hates.

Answer 3

Are there any good metrics an employee can calculate to determine job stability, and the pressing need to look for other work?

No.

There is no magic formula you can use.

Instead, you must rely on your own knowledge regarding what is going on in your company, your domain, your market, and your unique circumstances.

Use your experience and perhaps conversations with friends and coworkers to get a sense of what is happening and come to your own conclusions. Math simply isn't helpful in this context.

Keep yourself current in your work domain. Network. Make sure you have an emergency fund to tide you through any unexpected unemployment situations. Stay flexible. That way, you'll be ready when the time comes.

Answer 4

The metrics I concern myself with is more related to my personal finances instead of job stability.

• Debt elimination
• Emergency fund total
• Six to 12 months reserve total
• Passive income generation
• Retirement account growth

I do stay on top of what is happening with my current employer, the industry I'm in, what skills are in now and tommorow,and future trends. However I place financial stability higher than than job stability because that I have more control over.

Look up what happened to Enron and Wework. It was decisions at the top that screwed up the job stability for the people at the bottom. What metrics would've predicted or prevented those situations?