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Fianacial Planning Cases
Occupation Change
After the foreign exchange crisis particularly the massive reorganizations, the concept of occupation changed considerably. Expressions such as “Oryukdo” (resigning at the age of 56) → “Saojeong” (retiring at the age of 45) → “Sampalseon” (retiring at the age of 38) explain the concept of “lifetime occupation,” which is gradually disappearing. The average working period has also shrunk.
In Korea, the trend in occupation change is generalized as in western countries. Thus, workers can choose from several kinds of occupations in their lifetime. According to the Korea Labor Institute, the rate of occupation change of a regular employee increased by 22.2% in 1998~2001 after the foreign exchange crisis from an annual average of 18.9% in 1993~1996. In particular, the rate of occupation change of men increased by 19.0% from 15.9% in 1993~1996 before the foreign exchange crisis.
What points should I consider before changing my occupation?
As stable occupations disappear and their change rate increases, continuous development of personal ability and proper career management have become increasingly important. On the other hand, you should not ignore the economic influence of an occupation change. Generally, the following measures are a must before you deciding on occupation change:
Judge whether the occupation change corresponds to your desire and your objective.
You have to assess prudently your personal cost and profit according to your occupation change. Instead of giving up various benefits offered by your existing occupation, you need to check thoroughly the perks you can get from your new occupation. In addition, you should think about how much your occupation change will contribute to your desire and objective as well as those of your family.
Secure your contingency fund.
Generally, professionals recommend that you prepare cash that can cover your expenses for 3 or 6 months before deciding to change occupations. Even if you are likely to land a new job after leaving your existing one, you don’t know for sure how long will it take for you to get your first salary.
Have a strategy for changing your occupation.
People often change a job to one in the same sector but whose treatment is better than the existing job. According to a survey, the transfer to another sector may cause higher possibility of losing a job than the transfer to the same sector. Whether or not you have the luxury of time, if you utilize an asset that you have considered in your plan, the occupation change can be executed naturally.
Practice strategic management in your career.
While an occupation may be temporary, a career builds up during your lifetime. For successful career management, you must possess the following traits: 1. Good communication with others and ability to cooperate; 2. Flexibility and openness with regard to new ideas; 3. Effective work habits; 4. Creativity and spontaneity to help others. Moreover, the desire for continuous learning becomes the basis of successful career management and economic stability. Today, many companies introduce and support duty improvement programs for workers such as professional vocational education and graduate course. You can extend your knowledge by exchanging information with your colleagues during learning meetings, etc.
Maintaining the insurance contract is a must.
If you lose a job because of a delay in the change of occupation, you are forced to cancel your existing savings or investment due to the pressure of dwindling cash. In case of a canceled commission or financial product with tax incentives, however, you have to think twice since the tax can be possibly collected additionally. More importantly, don’t cancel the insurance contract. The life insurance offered at the welfare level of the existing company or accident insurance is useless after you leave the company. If paying the insurance premium is difficult, you can avail yourself of an agreement loan and transfer it to the other type’s guarantee.
Utilize the employment insurance.
If a worker loses his/her job, he/she can still get paid while job-hunting at 50% of the average pay prior to unemployment up to a maximum of 240 days. Not all jobless people are this lucky, however; people who changed jobs for inevitable reasons after working at a workplace where employment insurance is provided for more than 1 and a half years can avail themselves of this benefit, but not any jobless person who left the company voluntarily.
Ministry of Labor’s network for steady employment
Employment insurance’s Internet service
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