Introduction
Job interviews are undergoing a significant transformation. Traditional approaches—emphasising personality, presentation, and educational qualifications—are being re-evaluated in favour of methods prioritising skills and competencies. One movement driving this change is the “Tear the Paper Ceiling” initiative, which advocates recognising candidates based on their skills and experiences rather than formal degrees. The increasing focus on skills-based and competency-based interviews reshapes hiring processes across industries and sectors. However, confusion persists about these two seemingly similar approaches. This essay delves into the similarities, differences, benefits, and practical strategies for implementing a blended approach that leverages the strengths of both methods.
Understanding Skills-Based and Competency-Based Interviews
“Skills-based” and “Competency-based” interviewing are often used interchangeably, but they serve distinct purposes in the hiring process.
Skills-Based Interviews
Skills-based interviews evaluate specific technical and practical abilities required for a job. These skills, such as proficiency in software applications, analytical techniques, or project management tools, are typically observable and measurable. For example, a candidate for a software developer position might be asked to write code or solve a programming problem during the interview. This format aims to determine whether a candidate can perform the day-to-day tasks required for the role.
Competency-Based Interviews
On the other hand, competency-based interviews assess a broader range of attributes, including behaviours, attitudes, and underlying traits that contribute to job performance. Competencies encompass skills, knowledge, motives, traits, self-concepts, and values (Boyatzis, 1982). This type of interview delves into areas such as leadership, teamwork, problem-solving, and adaptability—traits indicative of a candidate’s potential for long-term success in various scenarios. For instance, candidates might be asked to describe a situation where they overcame a significant challenge, focusing on how they applied their competencies to achieve a positive outcome.
Similarities Between Skills-Based and Competency-Based Interviews
- Standardisation and Structure: Both methods employ structured formats to reduce subjectivity and bias. Structured interviews, which use predetermined questions and evaluation criteria, have been shown to improve the selection process’s reliability and validity (Campion, Palmer, & Campion, 1997). Standardisation ensures all candidates are assessed on a level playing field.
- Evidence-Based Evaluation: Both approaches require candidates to provide concrete examples of past performance. Skills-based interviews might involve practical tests or demonstrations, while competency-based interviews rely on behavioural questions that elicit detailed narratives of how candidates handled specific situations.
- Alignment with Organisational Needs: Effective skills-based and competency-based interviews are closely aligned with the company’s strategic goals and the position’s specific requirements. For example, a role requiring innovative thinking might assess technical creativity skills and problem-solving competencies.
Differences Between Skills-Based and Competency-Based Interviews
- Focus and Application: Skills-based interviews concentrate on specific technical abilities and task execution—what a candidate can do. Competency-based interviews take a broader perspective, examining how a candidate’s combination of skills, knowledge, and behaviours contributes to overall job effectiveness—how they do it.
- Contextual Understanding: Skills-based interviews are often transactional, asking “Can you perform this task?” In contrast, competency-based interviews are relational, exploring “How do you approach challenges, and why?” This distinction is crucial for roles where cultural fit and adaptability are critical.
- Measurement of Potential: Competency-based interviews are future-focused and explore potential by assessing how a candidate might behave in hypothetical scenarios. Skills-based interviews assess current capabilities based on observable technical proficiencies.
Theoretical Underpinnings
The competency approach is grounded in the work of psychologists like David McClelland (1973), who argued for assessing competencies rather than traditional intelligence measures. Competencies are seen as better predictors of job performance because they encompass underlying characteristics that drive behaviour. Additionally, the Competency Iceberg Model suggests that observable skills are just the tip of the iceberg, with underlying traits and motives forming the larger, unseen portion that significantly impacts performance (Spencer & Spencer, 1993).
Why Blend the Two Approaches?
A blended interviewing approach can yield a more holistic view of a candidate’s suitability. Here’s why integrating skills-based and competency-based methods is beneficial:
- Comprehensive Talent Evaluation: Combining both methods allows organisations to assess what a candidate can do (skills) and how they do it (competencies). This dual perspective enables employers to evaluate technical readiness, cultural fit, and long-term potential.
- Enhanced Fairness and Reduced Bias: Blended interviews reduce reliance on subjective factors like gut feelings. Structured interviews decrease bias and increase the likelihood of selecting the best candidate (Schmidt & Hunter, 1998). Organisations can make more informed and equitable hiring decisions by evaluating a more comprehensive range of qualities.
- Better Predictive Validity: Research indicates that combining skills and competency assessments improves the predictive validity of the hiring process (Spencer & Spencer, 1993). This is because it captures observable actions and underlying motivators, leading to a more accurate prediction of future job performance.
Potential Drawbacks and Ethical Considerations
While blending these approaches offers many benefits, there are challenges to consider:
- Standardisation Difficulties: Competency assessments can be subjective and more complex to standardise compared to skills assessments. Ensuring consistent evaluation requires well-defined competencies and trained interviewers.
- Unconscious Bias: Competency-based evaluations may be influenced by unconscious biases related to gender, race, or cultural background. Organisations must be vigilant in training interviewers to recognise and mitigate these biases (Lievens & Chapman, 2010).
- Resource Intensiveness: Developing and implementing a blended approach can be time-consuming and resource-intensive. It requires careful planning and possibly more extended interview processes.
Implementing a Blended Approach
To effectively implement a blended interviewing strategy, consider the following steps:
- Analyse Job Requirements: Begin by thoroughly analysing the job description to identify the necessary skills and competencies. Tools like competency models can aid in defining the attributes required for success in the role (Lievens & Chapman, 2010). For example, a project manager might need technical skills in scheduling software and competencies in leadership and communication.
- Develop Mixed-Question Frameworks: Create an interview framework that includes skills- and competency-focused questions. Skills-based question: “Can you demonstrate how you would use Excel to perform data analysis?” Competency-based question: “Describe a time when you had to persuade team members to adopt a new process. How did you approach it?”
- Use Multi-Modal Assessments: Incorporate various assessment methods, such as technical tests, behavioural simulations, and situational judgement tests. This approach provides a fuller picture of skills and behavioural tendencies (Pulakos, 2005).
- Train Interviewers: Ensure those conducting interviews are trained to assess skills and competencies effectively, recognising and mitigating potential biases. Training can include workshops on structured interviewing techniques and diversity awareness.
- Implement Standardised Scoring Rubrics: Use clear, standardised rubrics to evaluate responses consistently. For instance, skills might be scored on technical proficiency levels, while competencies are rated based on behavioural indicators demonstrated during the interview.
- Learn from Successful Implementations: Study organisations that have successfully implemented blended approaches. For example, companies like Google and IBM have integrated skills and competency assessments into their hiring processes, leading to more effective talent acquisition (Lievens & Chapman, 2010).
The “Tear the Paper Ceiling” concept promotes skills-based and competency-based hiring. This campaign advocates recognising the millions of Skilled workers Through Alternative Routes (STARs), such as community colleges, military service, or on-the-job training. It challenges the “paper ceiling” created by rigid degree requirements, which often exclude capable candidates.
The initiative encourages organisations to broaden their view of talent by emphasising competencies and practical skills. Skills-based and competency-based interviews help realise this vision, enabling employers to tap into a more diverse and often overlooked talent pool. This shift enhances diversity and inclusion and addresses talent shortages in critical areas.
The Benefits of Skills- and Competency-Based Hiring
- Increased Retention and Engagement: Employees hired through these approaches are more likely to stay longer and be engaged at work because they fit well with the job requirements and company culture (Gallup, 2017). When employees’ skills and competencies align with their roles, job satisfaction and productivity tend to increase.
- Greater Diversity and Inclusion: Removing unnecessary degree requirements opens opportunities to diverse candidates with varied experiences, contributing to a more inclusive workforce. This diversity can enhance team creativity and problem-solving (Cascio & Aguinis, 2019).
- Improved Performance: Studies have shown that structured, evidence-based selection methods improve job performance (Schmidt & Hunter, 1998). Organisations can improve overall performance and competitiveness by accurately matching candidates to job demands.
- Addressing Skill Gaps: Skills-based hiring allows companies to fill critical skill gaps by accessing a wider talent pool, including STARs. This approach is particularly valuable in fast-evolving industries where specific technical skills are in high demand.
Conclusion
As job interviews evolve, blending skills-based and competency-based approaches emerges as a strategic way to enhance the hiring process. This method offers a balanced view of a candidate’s capabilities and potential. With initiatives like “Tear the Paper Ceiling” leading the charge, organisations recognise that effective hiring requires looking beyond traditional qualifications to uncover true talent.
Implementing a blended approach can unlock a broader talent pool, reduce bias, and lead to better hiring decisions. By integrating skills and competencies, companies can build a more inclusive, effective, and future-ready workforce—one that truly reflects the diversity and dynamism of the modern job market.
More on Interview Techniques
Skills-Based Hiring: Transforming Ireland’s Employment Landscape
Exploring the Perfect Fit: Insights on Workplace Culture and Personal Growth with Dr. André Martin – Podcast
Lars Schmidt: Redefining HR and Empowering the Next Generation of People Leaders– Podcast
Sources
Tear the Paper Ceiling. (n.d.). “The Paper Ceiling.” Retrieved from https://www.tearthepaperceiling.org/the-paper-ceiling.
Boyatzis, R. E. (1982). The Competent Manager: A Model for Effective Performance. John Wiley & Sons.
Campion, M. A., Palmer, D. K., & Campion, J. E. (1997). “A Review of Structure in the Selection Interview.” Personnel Psychology, 50(3), 655–702.
Cascio, W. F., & Aguinis, H. (2019). Applied Psychology in Talent Management. Cambridge University Press.
Gallup. (2017). State of the American Workplace Report. Retrieved from https://www.gallup.com.
Lievens, F., & Chapman, D. S. (2011). Recruitment and selection. In S. Zedeck (Ed.), APA handbook of industrial and organizational psychology (Vol. 2, pp. 135–176). American Psychological Association.
McClelland, D. C. (1973). “Testing for Competence Rather Than for Intelligence.” American Psychologist, 28(1), 1–14.
Pulakos, E. D. (2005). Selection Assessment Methods: A Guide to Implementing Formal Assessments to Build a High-Quality Workforce. SHRM Foundation.
Schmidt, F. L., & Hunter, J. E. (1998). “The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 85 Years of Research Findings.” Psychological Bulletin, 124(2), 262–274.
Spencer, L. M., & Spencer, S. M. (1993). Competence at Work: Models for Superior Performance. John Wiley & Sons.
Introduction
Music has been an integral part of human culture for millennia, serving as a source of entertainment, a means of expression, and a tool for communication. In today’s modern workplaces, music is more accessible than ever, thanks to streaming services and personal devices. Employees often plug in their headphones to drown out distractions, elevate their mood, or find a rhythm in their tasks. But how exactly does music influence work productivity? Can the right playlist make us more efficient, or does it sometimes hinder our performance?
This article delves into the relationship between music and productivity, exploring how different types of music affect various tasks, the psychological mechanisms at play, and practical tips for harnessing music’s potential to enhance work performance.
The Multifaceted Impact of Music on Work Tasks
Repetitive or Monotonous Tasks
Music can be a powerful ally for repetitive or monotonous tasks—such as data entry, assembly line work, or filing. Studies have shown that music helps to reduce feelings of fatigue and boredom, making such tasks more enjoyable and less taxing. According to research published in Nature, listening to music during repetitive work can improve concentration and increase speed and accuracy. The rhythmic elements of music can help workers maintain a steady pace, effectively synchronising their movements with the beat and enhancing overall efficiency.
Creative or Analytical Work
The impact of music on creative or analytical tasks is more nuanced. These tasks require a high level of cognitive processing, problem-solving, and deep concentration. In such cases, music—especially complex music with lyrics—can become a distraction. A study featured in Oxford Academic found that background music, particularly when it includes lyrics, can interfere with reading comprehension and information processing. The brain may struggle to parse language from the music and the task, leading to decreased performance.
Music as a Mood and Motivation Modulator
One of the most significant effects of music is its ability to alter our mood and motivation levels. Upbeat music can inject energy into a sluggish morning, while calming melodies can soothe nerves before a big presentation.
Boosting Positive Emotions
Music triggers the release of neurotransmitters like dopamine and serotonin, which are associated with pleasure and happiness. An upbeat song can elevate mood, increase arousal, and enhance motivation. This positive emotional state can lead to greater engagement with work tasks and increased productivity.
Reducing Stress and Anxiety
Conversely, slower-paced, calming music can reduce cortisol levels, the body’s primary stress hormone. In high-pressure work environments or during stressful tasks, such music can create a soothing backdrop that promotes relaxation and focus. A study cited in the Inquiries Journal highlighted that music therapy could effectively reduce anxiety levels, suggesting potential benefits for stressful work situations.
The Importance of Music Selection
Not all music affects us in the same way. The genre, tempo, complexity, and presence of lyrics can significantly influence how music impacts our productivity.
Instrumental vs. Lyrical Music
Instrumental music is generally more conducive to maintaining focus, especially during tasks that involve reading, writing, or complex thought processes. Without lyrics, there’s less linguistic interference, allowing the brain to concentrate more fully on the task. Many professionals choose classical music, ambient soundscapes, or instrumental jazz.
On the other hand, music with lyrics can be distracting, mainly if the task requires language processing. The words in the music may compete for cognitive resources, making it harder to concentrate. However, for some individuals and tasks, lyrical music may not pose a significant distraction and might even enhance mood and motivation.
Tempo and Rhythm
The tempo of music can also play a crucial role. Fast-paced music tends to be more stimulating, increasing heart rate and arousal levels. This type of music might be beneficial for tasks requiring quick thinking or physical activity. For instance, a graphic designer might find that an upbeat playlist helps generate creative ideas more rapidly.
In contrast, slower-paced music is associated with calmness and can aid in tasks that require sustained attention and precision. A software developer debugging code might prefer a slower tempo to maintain a steady focus.
The “Mozart Effect” and Genre Considerations
The “Mozart Effect” refers to the theory that listening to classical music, particularly compositions by Mozart, can temporarily enhance spatial-temporal reasoning abilities. While some studies have suggested a potential link, the effect is not universally accepted, and its applicability to productivity is debated.
More importantly, personal preference and familiarity with the genre play significant roles. If a person dislikes classical music, forcing it upon them is unlikely to yield positive results. Similarly, a genre that one finds engaging and enjoyable may provide the right emotional and cognitive environment for increased productivity.
Personal Preferences and Individual Differences
The Role of Personality Types
Personality traits influence how music affects an individual during work. Research has indicated that introverts and extroverts respond differently to background music. Introverts are more likely to find music distracting during complex tasks. Their sensitivity to external stimuli means that music can overload their cognitive resources, leading to decreased performance.
Conversely, extroverts may thrive with a certain level of background stimulation. Music can provide the external arousal they need to maintain focus and engagement, potentially enhancing their productivity during tasks that hinder introverts.
Mood Congruence and Familiarity
Matching music to one’s current mood, known as mood congruence, can also impact productivity. Listening to energetic music can amplify that positive state if someone feels upbeat. Conversely, if they’re feeling anxious, calming music can help stabilise their mood.
Another factor is familiarity with the music. Familiar songs are less likely to be distracting because they don’t introduce new auditory information that the brain feels compelled to process. This familiarity allows the music to fade into the background, providing the benefits of mood regulation without the cost of attention diversion.
Limitations and Considerations
While music has the potential to enhance productivity, it’s not a universal solution. Several factors need to be considered to ensure that music helps rather than hinders.
Task Complexity and Music Choice
Even instrumental music might be a distraction for highly complex tasks that require significant cognitive resources. Silence or ambient sounds like white noise may be more appropriate in such cases.
Volume and Disruptive Elements
Music played too loudly can be overstimulating and may impair concentration. Similarly, songs with sudden tempo changes, high levels of dissonance, or unexpected elements can draw attention away from work tasks.
Individual Variability
People’s responses to music are highly individual. What enhances productivity for one person might be distracting for another. Personal experiences, cultural backgrounds, and associations with certain types of music all affect how music affects us.
Practical Tips for Incorporating Music into Work
To harness the benefits of music while minimising potential drawbacks, consider the following practical strategies:
Opt for Instrumental or Ambient Music
Choose instrumental music or ambient sounds when working on tasks requiring concentration and cognitive processing. Genres like classical, jazz, lo-fi hip hop, or electronic ambient music provide a backdrop that can enhance focus without the interference of lyrics.
Use Familiar Music
Listening to music you’re already familiar with reduces the likelihood of distraction. The brain doesn’t need to process new auditory information, allowing you to maintain focus on your work.
Match the Tempo to the Task
Align the energy level of the music with the nature of your task. Upbeat music can be motivating for tasks requiring high energy or physical movement. Slower, calming music may be more appropriate for tasks that require meticulous attention to detail.
Be Mindful of Volume
Keep the volume at a moderate level. The music should be audible but not overpowering. This balance helps prevent overstimulation and ensures the music remains a background element.
Personalise Your Playlist
Curate a playlist that suits your preferences and work style. Experiment with different genres and observe how they affect your productivity. Remember that self-awareness is key; pay attention to how different types of music impact your focus and adjust accordingly.
The Case for Silence
It’s important to recognise that sometimes, the best environment for productivity is silence. If you find that music, in any form, distracts you or if your work demands intense concentration, embracing a quiet environment might be the optimal choice. Noise-cancelling headphones or quiet workspaces can help minimise auditory distractions.
Conclusion
Music’s relationship with productivity is complex and highly individualised. It can be a powerful tool to enhance mood, increase motivation, and make work more enjoyable. For repetitive or monotonous tasks, music often serves as a beneficial companion, reducing feelings of boredom and fatigue.
However, music can sometimes be a double-edged sword for tasks requiring deep cognitive engagement. The type of music, its complexity, the presence of lyrics, and its volume all play crucial roles in determining whether it aids or hinders productivity.
By understanding the psychological mechanisms at play and being mindful of personal preferences and task requirements, individuals can make informed choices about incorporating music into their work routines. Whether selecting the right genre, adjusting the volume, or choosing silence when necessary, intentional use of music can significantly enhance work performance.
In the end, there’s no one-size-fits-all answer. The key lies in self-awareness and experimentation. By paying attention to how different sounds affect your focus and productivity, you can tailor your auditory environment to support your work effectively.
More on Focus
How to focus and become indistractable with Nir Eyal – Podcast
Schopenhauer and the Workplace
Game Changer: Mindset Mastery with Christian Straka – Podcast
Sources
- Nature: Forrester, N. (2023). Sounds of science: how music at work can fine-tune your research. Nature, 616(399-401). https://doi.org/10.1038/d41586-023-00984-4
- Oxford Academic: Dobbs, S., Furnham, A., & McClelland, A. (2011). The effect of background music and noise on the cognitive test performance of introverts and extraverts. Applied Cognitive Psychology, 25(2), 307–313.
- Inquiries Journal: Dolegui, A. S. (2013). The Impact of Listening to Music on Cognitive Performance. Inquiries Journal, 5(09).
These studies and articles provide valuable insights into how music affects cognitive performance and productivity. They emphasise the importance of context, individual differences, and task complexity in determining the optimal use of music in the workplace.
Introduction
Speaking at the Democratic National Convention in Chicago in August, Hilary Clinton spoke of her hope that Democratic presidential nominee Kamala Harris could finally break the “highest, hardest glass ceiling” in America by becoming the first female president. “When a barrier falls for one of us, it clears the way for all of us,” she said, echoing her convention speech from eight years before. [1]
The President of the United States is the leader of the free world, in charge of the largest global economy, and boasts an unimaginable amount of power –– and yet the glass ceiling still affects who may get the role. If it is a factor in this most upper echelon of society, you can bet your bottom dollar it is also a factor in other lower rungs. Still, somehow, after all this time.
The glass ceiling
The term “glass ceiling” refers to the invisible barriers that prevent women and minorities from ascending to the highest levels of professional success. It was first used in 1978 by writer and consultant Marilyn Loden at a panellist discussion about women in the workplace [2]. Loden was describing the cultural challenges women face when their careers stagnate at middle-management roles, preventing them from attaining higher leadership or executive positions.
Despite progress in gender equality, the glass ceiling remains a persistent challenge in workplaces worldwide. The glass ceiling is not just a metaphor for gender-based barriers but also encompasses biases related to race, ethnicity, and other marginalised identities.
The numbers
Despite efforts to promote gender equality, women continue to be underrepresented in leadership positions across various industries. According to a report by Grant Thornton Belgium, a consulting firm with expertise in audit, accountancy, tax & legal and advisory, 33.5% of all senior management positions worldwide are held by women today, compared to 32% last year and 31% in 2021. At this rate, we will not reach parity until 2053. [3]
Then there is the gender pay gap. According to the World Economic Forum’s Global Gender Gap Report 2023, women globally earn on average 16% less than men for similar work [4]. In the United States, the pay gap is slightly narrower, with women earning 82 cents for every dollar earned by men, according to Pew Research Center [5]. That number was roughly the same as in 2002, when they earned 80 cents to the dollar. Notably, this gap widens significantly for women of colour, with Black women earning 70% as much as White men and Hispanic women earning only 65% as much. [6]
The problem is no less prevalent in Ireland. According to a 2022 report by the Central Statistics Office (CSO) of Ireland, women held only 32% of the nation’s senior management positions [7]. The situation is slowly improving. One in four (24.7%) enterprises had at least 40% female representation at Board level in Ireland in 2023 compared with 18.4% in 2021 [8]. The European Institute for Gender Equality’s Gender Equality Index 2022 placed Ireland in the upper half of EU countries, yet significant gaps remain, particularly in economic power and decision-making roles. [9]
The gender pay gap in Ireland, as reported by the CSO, stood at 11.3% in 2022 [10]. Although this is below the EU average of 13%, it still represents a substantial disparity in earnings between men and women. Furthermore, the gap widens in certain sectors, such as finance and insurance, where women earned on average 21.3% less than men.
These statistics demonstrate the expansive reach of the problem. Gender bias is embedded in every walk of life and every country, no matter how liberal it proclaims to be. The underrepresentation of women in leadership roles and the persistent pay gap are not merely the results of individual choices but are deeply rooted in systemic biases and organisational cultures that perpetuate these disparities.
Factors contributing to the glass ceiling
Several factors contribute to the pervasiveness of the issue. Organisational culture, for one, plays a significant role. Many companies operate with an implicit preference for male leadership styles and behaviours, which can marginalise women who do not conform to these expectations. This “think manager, think male” mindset leads to a lack of diversity in leadership and reinforces gender stereotypes.
Moreover, the persistence of male-dominated networks within organisations often excludes women from informal decision-making processes and opportunities for career advancement. Women may also face higher scrutiny and harsher criticism compared to their male counterparts, which can hinder their ability to progress within the organisation.
Unconscious bias –– the attitudes or stereotypes that affect our understanding, actions, and decisions unconsciously –– is another pivotal factor. In the workplace, unconscious bias can influence hiring, promotion, and evaluation processes, often to the detriment of women and minorities. For example, studies have shown that identical resumes with male and female names receive different evaluations, with male-named candidates being perceived as more competent and hireable [11].
These biases extend to leadership evaluations as well. Women are often evaluated more harshly than men for displaying the same leadership behaviours, such as assertiveness or decisiveness, which are typically associated with male leaders. This double standard reinforces the glass ceiling and perpetuates gender inequality in leadership.
Work-life balance challenges also tend to disproportionately affect women, particularly in societies where caregiving responsibilities are held to be a primarily female responsibility. The lack of family-friendly policies, such as paid parental leave and flexible work arrangements, can make it difficult for women to balance their professional and personal lives. As a result, many women opt out of the workforce or settle for lower-level positions that offer more flexibility but fewer opportunities for advancement.
The “motherhood penalty” is a well-documented phenomenon where women experience a decline in earnings and career progression after having children. A study by the Institute for Fiscal Studies in the UK found that by the time a woman’s first child is 12 years old, her hourly wages are on average 33% lower than those of a man [12]. In 2022, 70% of mothers ages 25 to 34 in the US had a job or were looking for one, compared with 84% of women of the same age without children at home. This amounted to the withdrawal of 1.4 million younger mothers from the workforce. [13]
Additionally, mentorship and networking are critical for career advancement, yet women often have less access to these opportunities than men. Mentorship can provide guidance, support, and advocacy, helping women navigate the challenges of the workplace and advance in their careers. However, the lack of female role models in leadership positions can make it difficult for women to find mentors who understand their unique challenges.
Networking is equally important, as it provides opportunities for women to build relationships with influential colleagues and leaders. However, women are often excluded from informal networks, such as social events or “old boys’ clubs,” where important decisions and career opportunities are discussed. This exclusion further limits women’s access to workplace parity.
So, how do we fix the problem?
Breaking the glass ceiling: Organisational cultures
Organisations must actively work to create inclusive cultures that value diversity and provide equal opportunities for all employees. This includes implementing policies and practices that promote gender equality, such as equal pay for equal work, transparent promotion processes, and family-friendly policies. Companies should also encourage diversity in leadership by setting targets for female representation in senior roles and holding leaders accountable for meeting these goals.
Training on unconscious bias can also help employees recognise and mitigate their biases, leading to fairer hiring, promotion, and evaluation processes. Additionally, companies should ensure that women have access to the same networking and mentoring opportunities as men, including formal mentoring programs and leadership development initiatives.
Breaking the glass ceiling: Work-life balance
Work-life balance is crucial for enabling women to pursue leadership roles. Organisations can support work-life balance by offering flexible work arrangements, such as remote work, flexible hours, and job-sharing options. Paid parental leave and affordable childcare services are also essential for helping women manage their professional and personal responsibilities.
In addition to organisational policies, societal changes are needed to challenge traditional gender roles and promote shared caregiving responsibilities. This includes encouraging men to take parental leave and participate more in household duties, thereby reducing the burden on women and enabling them to pursue their careers without sacrificing their personal lives.
Breaking the glass ceiling: Mentorship and sponsorship
Organisations should establish formal mentoring programs that pair women with senior leaders who can provide guidance, support, and advocacy. Sponsorship goes a step further by involving senior leaders who actively promote their protégés for high-visibility projects and leadership roles. “While a mentor is someone who has the knowledge and will share it with you, a sponsor is a person who has power and will use it for you,” Herminia Ibarra writes in Harvard Business Review. “When it comes to this important distinction, the evidence is also clear: women tend to be over-mentored and under-sponsored.” [14]
Women can also benefit from building their networks outside of the workplace, such as joining professional associations, attending industry conferences, and participating in women’s leadership programs. These networks can provide valuable connections, resources, and opportunities for career advancement.
Breaking the glass ceiling: Policy changes
Policy changes at the national and international levels are essential for addressing the systemic barriers that have protected the gendered status quo for century upon century. Governments can play a crucial role by enacting laws that promote gender equality, such as mandatory pay transparency, quotas for female representation on corporate boards, and anti-discrimination legislation.
Moreover, international organisations and advocacy groups can raise awareness of gender inequality and hold companies accountable for their diversity and inclusion efforts. Public pressure and consumer demand for gender equality can also drive change, encouraging companies to adopt more inclusive practices and policies.
The fight continues
The glass ceiling remains a significant barrier to gender equality in the workplace, preventing women from reaching their full potential in leadership roles. While progress has been made, much work remains to be done to break down the barriers that limit women’s career advancement. By promoting inclusive organisational cultures, supporting work-life balance, encouraging mentorship and sponsorship, and advocating for policy changes, we can begin to dismantle the glass ceiling and create a more equitable and inclusive workforce for all.
Breaking the glass ceiling is not just a matter of fairness; it is also essential for the success of organisations and societies. Diverse leadership teams bring different perspectives, foster innovation, and improve decision-making, leading to better outcomes for businesses and communities alike. As we move forward, it is crucial that we continue to challenge the status quo, advocate for gender equality, and create opportunities for women to thrive in all areas of their professional lives. As Sheryl Sandberg, COO of Facebook, put it, “In the future, there will be no female leaders. There will just be leaders.” [15]
More on Diversity
Designing workplace equality – Podcast
Diversity and Conflict for a Plural Workforce
Sources
[1] https://www.bbc.co.uk/news/articles/ce317d27l7zo
[4] https://www.weforum.org/publications/global-gender-gap-report-2023/digest/
[7] https://www.cso.ie/en/releasesandpublications/ep/p-wami/womenandmeninireland2022/
[9] https://eige.europa.eu/gender-equality-index/2022/country/IE
[10] https://www.cso.ie/en/statistics/earnings/genderpaygap/
[14] https://hbr.org/2019/08/a-lack-of-sponsorship-is-keeping-women-from-advancing-into-leadership
[15] Sandberg, S. (2013). Lean In: Women, Work, and the Will to Lead. New York: Knopf.
Introduction
An increasingly globalised world has made business travel par for the course. For a large number of the modern workforce, international travel is an accepted, even fundamental part of their job scope. Some see that travel as a perk of the job –– a chance to see new places, meet new people, get out of the office and into the world. But for others, it’s a burden. Travel can be tiring –– airport tedium, time away from home, jet lag, plane food. Even those enthusiastic at first can quickly become hardened and weary from excessive trips, resulting in burnout.
This article seeks to offer some solutions as to how one can better manage travel, cutting out burnout and making work trips an energising benefit of the job rather than a tortuous additional task.
The problem: Stress
According to a new study conducted by Opinium and commissioned by World Travel Protection (WTP), workers feel a sense of anxiety (34%), stress (34%), homesickness (30%) and exhaustion (29%) while travelling for work [1]. Meanwhile, a survey by the International SOS Foundation and Kingston University found that, of the 200 frequent travellers that took part, 45% reported higher stress levels than normal while on work trips. And 31% said they experienced emotional exhaustion –– one of the major risk factors of burnout –– on a weekly basis. [2]
The problem: Bad health and burnout
“Burnout is an accumulative process,” says Dr. Rachel Lewis, associate professor of occupational and business psychology at Kingston University, who carried out the research for International SOS. “It starts with a reduction in factors that support our ability to cope, such as eating a balanced diet, getting quality sleep and regular exercise. If this combines with increased external demand, the result is stress. If stress is ongoing, it can lead to the first stage of burnout, which is emotional exhaustion. If this is left unchecked, stage two is depersonalization, becoming cynical and critical of both yourself and others. Stage three is reduced personal accomplishment, the feeling that you are incompetent or that you are not achieving. If that continues, you have reached burnout.” [3]
The trouble is that frequent travel severely impacts the core pillars of well-being that are controllable when we’re at home. Our diet, exercise routines, sleep patterns, all so vital for maintaining our circadian rhythm, are sacrificed at the altar of work travel, and suffer greatly. Indeed, the Kingston University research found that 76% of workers are less likely to have a balanced diet or exercise when travelling for business, and 73% experience reduced quality sleep. At the same time, 46% say they are more likely to consume alcohol while travelling for work, and 35% are more likely to visit bars and nightclubs. [4]
“Because international travel disrupts the circadian rhythm, which is crucial for underpinning all of the body’s processes, our physical resilience is lowered, which means we have an increased need for a nutritious diet, quality sleep and regular periods of relaxation,” says Jayne Morris, an executive coach and author of Burnout to Brilliance: Strategies for Sustainable Success [5]. And yet oftentimes that fundamental need is not met. As we slip out of our daily routine, we start to form bad habits. The airport pint or that why-not McDonalds start to accumulate and take a toll.
The problem: Additional hours
The problem is not just that we slip out of our old, better habits, but that we develop new, worse ones. Or, more accurately, they are thrust upon us in the form of boundaryless work schedules, which tend to accompany working abroad. Employees operating across differing time zones often find themselves having to work a double day, picking up emails and calls from colleagues back home, as well as working a full day at their destination. In the Kingston study, 73% of those surveyed said they worked longer hours while away. [6]
“There’s this feeling among business travellers that they’re constantly on duty, answering emails at all times of the day, with their phones always on,” says Matthew Holman, founder of Simpila Healthy Solutions, a consultancy that addresses mental health issues in the workplace. “Most important [if we are to fix this problem] is the ability to switch off from work when your local time-zone clock says the work day is over. Unfortunately, as we work more and more in global roles, the time merges through the day, and the ability to switch off becomes harder. Workplaces have to embrace the switch-off culture so that employees can enjoy a positive work balance.” [7]
The problem: Expectations
As noted earlier, some people love the travel aspect of their job –– and not unreasonably so. There can be genuinely exciting aspects and opportunities that should be enjoyed and cherished. However, there can also be a sense that employers feel their workers should be grateful for the trip they’re undertaking, and that any complaints or even lack of outright enthusiasm would be in some way sacrosanct.
The expectations are not just that one should throw themselves into the work aspect of the trip –– which is an understandable expectation, a level of professionalism should be maintained at all times –– but also that employees have an obligation to be fully engaged in the social environment. They should be at the bar every night, interacting with their fellow employees/clients/counterparts. They should be totally “on” 24 hours a day. But those employees are not being paid to work 24 hours a day. The basic managerial trait of man management is required here –– not all workers are the same, some will prefer time alone, or simply may not thrive in such a full-on environment. Too often it’s the case that bosses think their staff should simply work these additional hours and be grateful for the opportunity to do so, irrespective of their distinct personality types or personal situations. Such an approach fails to factor in the difficullties many employees face when undertaking time away.
A lot of workers have families, maybe even young children. Being forced to be away from them is not necessarily the privilege that higher-ups think it is. Given the Kingston research found a quarter of frequent travellers have experienced mental health issues such as depression and anxiety, perhaps a greater level of sensitivity is required. Some employees will be in their element. Others will not. For managers, it’s important to cultivate an environment that works for all, where additional hours don’t come with a sense of high stakes obligation.
How to work away
So, those are the problems facing workers who travel often. But what are some solutions that can, if not fix everything outright, certainly make the situation a little easier?
The fix: Time management
As noted, travel tends to disrupt established routines, which can have a hugely detrimental effect on workers’ mood and productivity. To negate the disruption to the best of your ability, it is a good idea to try planning your travel around your existing routine and work schedule. If you’re most productive in the mornings, try to schedule your travel during the afternoon. If you sleep well on planes, opt for a night flight. Equally, try to use your travel time in a way that benefits you. Some people find the entrapment of a plane or train carriage to be useful for productivity, stripped of the distractions of ordinary day-to-day life. If you’re not that type, don’t try to force it. Travel is tiring. Get as much rest as you can. The likelihood is you’re going to need it.
The fix: Don’t neglect your mental health and well-being
Sleep, diet, exercise. These are the core pillars of our mental and physical well-being. They also tend to be the first things cast aside once we hit that check-in counter. To maintain a healthy routine when travelling is difficult and requires active effort, but it is doable. Many hotels have gyms or swimming pools where travelling workers can exercise. If not, a quick workout in the hotel room using an online routine is more than sufficient.
To protect your sleep routine, try, if you can, to stave off jet lag by either staying up a few extra hours to sync your sleep schedule with your new location or to hit the hay early rather than staying up late into the night. Think about what you’re putting into your body –– caffeine late in the day or the fast food option at the airport may feel like a good idea at the time but it is going to have a negative impact in the long haul. That’s not to mention the late night drinking sessions which sometimes can be worthwhile, othertimes less so. Try to use your judgement to make sure you’re getting the balance right.
The fix: Work-life balance
Just because you’re on the road doesn’t mean work should take over your entire day. Set clear boundaries for when you’ll be “off the clock.” This might mean deciding not to check work emails after a certain time in the evening or scheduling activities to give yourself time away from work. These boundaries are essential to prevent burnout and ensure you have the mental space to recharge. Meanwhile, be sure to make a concerted effort to stay in touch with family and friends. It can be all too easy to feel a sense of isolation and disconnection when we’re away, harming our emotional well-being. Don’t fall into the trap. Reach out to a friend or family member. Communicating across oceans is easy these days, why not make use of it?
Equally, make the effort to carve out time for yourself. If you’re in a new city, take a few hours to explore a landmark, visit a museum, or enjoy a local restaurant. If you’re exhausted, take a few hours to sit in your room, where you can sleep, meditate, call a family member or stick a film on –– it doesn’t have to be all work all the time. You know best what it is your body needs, don’t be afraid to take some time for yoursef.
The fix: Take advantage, with a positive mindset
For all the negative trappings mentioned above, there is often a lot to enjoy about a trip away, even if it is primarily work-focused. Rather than falling into a negative feedback loop regarding all the inconveniences of your trip, try to see the sunny side. If the location you’re in is nice, try to take advantage of it. And even if it’s not, there are likely to be professional opportunities available to you. You don’t have to network every hour of the day, or to engage in any of the more repercussion-heavy forms of networking, such as the late nights and empty glasses. Rather, set yourself a specific period of time in which you’re going to commit to making connections. Put a smile on your face and see where it gets you. They say travel broadens the mind, why shouldn’t it broaden your career prospects too?
Travelling for work
Travel presents all sorts of challenges, from stress and burnout to disrupted routines and emotional exhaustion, but it is possible to manage these negatives or even turn them into positives with just a few simple changes. With effective time management, a greater focus on prioritising mental and physical well-being, a commitment to setting boundaries for your work day, and adopting a positive mindset, it’s possible to reduce the negative effects of travel and even find enjoyment in the experience.
While the demands of travel may never completely go away, with the right mindset and strategies in place, you can stay ahead of the curve and continue to grow both personally and professionally, no matter where your job takes you.
More on Burnout
The Million-Dollar Impact of Burnout & Busyness Culture
Manage Your Energy, Not Your Time
Sources
[2] https://businesstravelerusa.com/lifestylewell-being/burned-out/
[3] https://businesstravelerusa.com/lifestylewell-being/burned-out/
[4] https://businesstravelerusa.com/lifestylewell-being/burned-out/
[5] https://businesstravelerusa.com/lifestylewell-being/burned-out/
[6] https://businesstravelerusa.com/lifestylewell-being/burned-out/
Introduction
A recent article in The Economist observed the increasing prevalence of the word “nice” in business and leadership spaces. “Kindness is in the air,” the article said. “Publishers produce business books with titles like ‘The Power of Nice’ or, simply, ‘Kind’…[while] firms publicly embrace the values of compassion.” [1]
As the author notes, there is nothing particularly revolutionary in the ideology itself –– “being nice is better than being mean” is hardly a novel concept. That said, in these particular worlds, there has, until very recently, been an emphasis on what could be thought of as the “nice guys finish last” mantra. The prototypical “effective leaders” of the epoch were not known for their kindness. Steve Jobs is hailed as revolutionary, meanwhile almost every employee who ever worked under him has gone on record to say he was an asshole. Recent on-screen representation of leadership has come in the form of Jordan Belfort’s debauched greed in The Wolf of Wall Street or the Roy clan’s myriad personality deficiencies in Succession. Meanwhile, Donald Trump, the original TV boss in The Apprentice, graduated to become western world boss in 2016. Even The Donald’s most loyal supporters would struggle to list kindness as one of his core strengths.
Essentially, then, the accepted leadership ideal of the era was that of a shouty, ego-driven, take-no-shit macho. “Nice” was not a factor.
Thankfully, that era is now over. But what does its ending mean for modern leadership? As
Pilita Clark writes in the Irish Times, “Kindness in business is oddly complicated. We delight in it on a personal level, yet we are unsure it is a good or even necessary quality in the workplace.” [2]
This article will attempt to get to the bottom of just how “nice” one should be in the office –– is it an obvious positive or can it go too far?
The nice guys
The Economist article cites a recent meta-analysis of research into niceness and effective leadership by Andrew Blake of Texas Tech University and his co-authors, which found that “the two do often go together.” A boss’s “agreeableness” was found to be tied to ethical behaviour, workplace trust and psychological safety, among other beneficial things. [3]
Meanwhile, a recent paper by Charles O’Reilly of Stanford University and his co-authors looked at the relationship between chief executives’ personalities and reviews of their organisations’ culture on the employee-ratings website Glassdoor. It found that “agreeable bosses were associated with cultures that were more collaborative and innovative.” [4]
Similarly, researchers Amy J.C.Cuddy, Peter Glick, and Anna Beningera determined that warmth breeds trust, and “trust increases information sharing, openness, fluidity, and cooperation.” [5]
Unsurprisingly, then, a level of compassion and empathetic leadership can be effective in the workplace –– not just for office dynamics and morale, but in inspiring innovation and teamwork too.
Even in areas of worklife where a certain level of harshness is to be expected, such as in sales or negotiations, some have argued that it is possible to be more effective if leading with kindness. “When I have taught negotiations skills to leaders, I have often referred to sources such as the Power of Nice by Ron Shapiro,” writes Joyce E. A. Russell, Ph.D., who was Dean Emeritus and Professor of Management at the Villanova School of Business from 2016 to 2023. Russell says she uses the expression “be soft on the person and hard on the problem” mentioned by Fisher, Ury and Patton in their Getting to Yes negotiations book in her coaching. “I firmly believe you don’t have to be aggressive or nasty to get what you want in a negotiation nor in business,” she says. [6]
Being too nice
There we have it then: Being nice is great and businesses can be soft and cuddly at no extra cost to their effectiveness. We can all go home, bake a cake, and count our fortunes.
Except we all know that’s not true.
The machismo ego-trip of the “nice guys finish last” approach is stupid. But it didn’t come from nowhere. There’s a reason a lot of the greatest business people of all time are not on everyone’s Christmas card list. It takes a level of ruthlessness to get to the top. That doesn’t mean we have to be cold, calculating monsters in order to survive. Rather, it means, as organisational psychologist Dr. Nicole Lipkin writes in Forbes, that “there are nuances to being “nice” that can make or break you.” [7]
“Being an empathetic, sensitive person who cares about their employees is one thing,” says Lipkin. But, “If you’re too nice you risk being a pushover; you might keep an employee beyond their expiration date; you might see deadlines come and go; you might become too close with your employees at the expense of being able to give them tough feedback.” [8]
Russell agrees. “It is problematic if the culture is so nice that no one speaks the truth or is afraid to upset anyone,” she says. “That will make it difficult to bring in new ideas and innovations. It may make it harder for the current employees to adapt to newcomers who bring in diverse perspectives.” [9]
Sometimes, then, “nice”, or at least “too nice”, isn’t the answer. Something different is required.
People who score less well on agreeableness are liable to be less trusting, more competitive and more confrontational, says The Economist [10]. In certain business contexts, those traits are exactly what is needed. Wharton professor, Adam Grant, stresses that for the “givers” in the world, empathy can be a leadership trap. “If empathy isn’t paired with 360-perspective-taking, defined as taking all viewpoints and needs into account including the needs of the company, then feelings may dominate over objectivity,” says Lipkin, giving the example of a salary negotiation in which the manager overly empathises with the employee and puts their needs over the company’s [11]. Indeed, a recent paper by Daniel Keum and Nandil Bhatia of Columbia Business School found that “during periods of intensifying competition [agreeable leaders] were more likely to be replaced by less caring types.” Because “when layoffs are necessary, boards don’t want Samaritans in charge.” [12]
The nuance
So far this analysis has been overly simplistic, focusing on roaring corporate sadists and bleeding-heart samaritans with no in between. But as Lipkin noted, it’s the nuances in being nice that make the real difference, and it’s perfectly possible to deal with confrontation, feedback and negotiations in rational, business-minded ways while still being kind. Indeed, it’s probably the best way to do so.
It takes a total misunderstanding of what it is to be “nice” to think that it means not stepping on any toes or ever going against the grain. Oftentimes, the kindest thing you can do for someone is tell them the truth, especially if you are giving feedback on a piece of work or a general in-office demeanour that isn’t up to scratch. Saying nothing and giving a smile in such circumstances isn’t kind, it’s cowardly and harmful. One can give criticism with compassion and one can have conflict with compassion –– it’s what adults do. To think it is a black and white case of either screaming bloody murder or giving concessions is reductionist and immature.
Russell gives an example of an executive she used to coach who “always gave honest constructive feedback no matter how hard it was to give or for the person to hear.” Rather than recipients of this feedback taking his honest, sometimes critical words to heart, the executive “mentioned how he often got really positive comments from people after receiving the feedback, noting they often commented that no one had ever given them “real feedback” before.” [13]
The executive is not being cuddly, that doesn’t mean he’s not being nice. Equally, on the other side of the coin, it is perfectly possible to be very kind and smiley to someone’s face while saying horrible things behind their back to their colleagues and higher-ups. “Nice” can be purely superficial. So, when we talk about being “nice” at work, it’s crucial to stop thinking about the purely cosmetic aspects of niceness and focus instead on the genuine approach.
As Lipkin says, “It’s important to redefine what “nice” means when it relates to leadership. “Nice” shouldn’t mean being a pushover, always saying yes, being incapable of giving constructive feedback, and/or not letting people go. That need will stifle creativity and objectivity and breed a lack of respect toward you by employees. [Instead] “Nice” needs to be defined as having a positive impact on your people and the organisation as a whole , i.e. positive leadership.” [14]
Positive leadership
So, what does that positive leadership look like in action?
Russell offers some practical advice. She advises leaders: “Look for the good things that people do and comment on those instead of their errors; encourage individuals and support their efforts; share positive news about individuals with others (instead of negative gossip); send thank you notes, and smile at people at work.” This may sound simplistic, but she contends that “just thanking people and celebrating their successes is huge. It is surprising to me how often coworkers are jealous of each other and don’t celebrate successes or take the time to thank each other for what they do.” [15]
Meanwhile, Lipkin points to research by Kim Cameron and colleagues at the University of Michigan, who claim there are four essential qualities for cultivating positive leadership and having a positive impact on your organisation. Those four essential qualities are: Fostering social connections, showing empathy, going out of your way to help others, and encouraging people to talk to you –– creating a relationship grounded in psychological safety where people can express themselves, even if it is difficult. [16]
In order to do these things without falling into the trap of being too nice, Lipkin recommends workers reshape their relationship with nice, look at their values as a leader and pinpoint the most important traits that they want to emulate. She also suggests they avoid taking a 180-degree behavioural shift so as to not unsettle any employees, and, if struggling, to hire a coach to help guide, mentor, help break the unhealthy patterns, and offer suggestions.
How “nice” should you be at work?
In conclusion, the concept of being “nice” at work is far more nuanced than a simple dichotomy between kindness and ruthlessness. While the era of aggressive, ego-driven leadership is fading, the pendulum should not swing too far toward a culture of superficial niceness that stifles innovation, honesty, and constructive feedback. True positive leadership lies in the ability to balance empathy with decisiveness and compassion with accountability. Leaders who foster trust, support, and open communication while remaining firm and focused on business goals can create a thriving workplace culture. Ultimately, redefining “nice” to include authenticity, respect, and clear expectations is key to effective leadership.
More on Empathetic Leadership
The Role of Empathy in the Workplace: Impact and Implications
Emotional Intelligence and Engaging Others
What is the State of Workplace Loyalty in 2024?
Sources
[1] https://www.economist.com/business/2024/09/19/should-you-be-nice-at-work
[3] https://www.economist.com/business/2024/09/19/should-you-be-nice-at-work
[4] https://www.economist.com/business/2024/09/19/should-you-be-nice-at-work
[5] https://hbr.org/2013/07/connect-then-lead
[6] https://www.forbes.com/sites/joyceearussell/2019/06/24/being-honest-and-nice-at-work-actually-works/
[7] https://www.forbes.com/sites/nicolelipkin/2018/11/15/the-downside-of-being-a-nice-leader/
[8] https://www.forbes.com/sites/nicolelipkin/2018/11/15/the-downside-of-being-a-nice-leader/
[9] https://www.forbes.com/sites/joyceearussell/2019/06/24/being-honest-and-nice-at-work-actually-works/
[10] https://www.economist.com/business/2024/09/19/should-you-be-nice-at-work
[11] https://www.forbes.com/sites/nicolelipkin/2018/11/15/the-downside-of-being-a-nice-leader/
[12] https://www.economist.com/business/2024/09/19/should-you-be-nice-at-work
[13] https://www.forbes.com/sites/joyceearussell/2019/06/24/being-honest-and-nice-at-work-actually-works/
[14] https://www.forbes.com/sites/nicolelipkin/2018/11/15/the-downside-of-being-a-nice-leader/
[15] https://www.forbes.com/sites/joyceearussell/2019/06/24/being-honest-and-nice-at-work-actually-works/
[16] https://www.forbes.com/sites/nicolelipkin/2018/11/15/the-downside-of-being-a-nice-leader/
Introduction
In a world where the job market is becoming increasingly competitive and specialised, many recent graduates or even current professionals are weighing up whether a master’s degree might help to set them apart. The in-depth knowledge, networking opportunities, and specialisation offered by such degrees are obvious positives. Meanwhile, the prohibitive costs and increased standardisation of further study can beg the question as to whether a master’s degree is really worth the debt that comes with it.
This article will assess the value of a master’s degree, exploring its benefits, downsides, and to whom specifically it might be worthwhile.
The benefits: Career advancement
One of the clearest ways a master’s degree can demonstrate its value is through career advancement. In many industries, having a bachelor’s degree is no longer enough to reach the higher rungs of the professional ladder. Employers often look for candidates with postgraduate qualifications when filling senior roles, particularly in fields like healthcare, engineering, business, and education. These industries place a premium on advanced knowledge and skills that only a master’s can provide.
According to a Graduate Outcomes survey, candidates with a master’s degree have a higher chance of landing a professional role after graduation [1]. As Maya Richard-Craven writes in Forbes, “Going to graduate school comes with a lot of benefits including developing a vast network. From alumni events to the job application process, having the name of a prominent school or program on your resume can go a long way. Having a degree from a nationally ranked graduate school will take you even further.” [2]
“Postgraduates are [often] motivated by career opportunities”, says Professor Martine Smith, dean of graduate studies at Trinity College Dublin [3]. In a competitive job market, workers are looking for anything that can elevate their employability. Even in industries where a master’s isn’t strictly necessary, it can serve as a powerful differentiator. Employers view it as evidence of specialised knowledge, commitment to professional development, and the ability to engage with complex material. For instance, in fields like technology, law, or public policy, a master’s degree can show that a candidate is not only technically proficient but also capable of strategic thinking and leadership. This makes the degree particularly valuable for individuals seeking promotions or transitions into managerial positions.
The benefits: Money
Financially, a master’s degree can lead to significant long-term rewards. In 2022, workers with master’s degrees in the U.S. reported median weekly earnings of $1,661, according to the U.S. Bureau of Labor Statistics. In comparison, those with bachelor’s degrees earned $1,432 per week [4]. Meanwhile, data gathered over decades by the Higher Education Authority backs that up [5]. Graduates, on average, earn more money. That statistic is applicable all across the world. And postgraduates earn even more, with the additional qualifications allowing them to progress into better-paid roles within their career.
This wage gap can be more pronounced in certain fields than others. For example, in sectors like business, finance, and engineering, the earning potential of individuals with a master’s degree often far exceeds that of their peers with lower qualifications. Given that the primary reason one might choose not to apply for a master’s is the fiscal demands, it’s worth considering that over the course of a career the financial benefits of a master’s degree can more than make up for the initial cost of tuition.
The benefits: Personal growth and networking
Beyond the financial and career-based rewards, the personal growth that comes with completing a master’s degree cannot be overlooked. Postgraduate education requires a high level of intellectual engagement and commitment. The process of tackling complex topics, conducting research, and collaborating with peers and professors can foster a deep sense of achievement. Completing a master’s degree is often seen as a significant milestone, one that builds confidence and a sense of accomplishment. The skills learned during the program can have broad applications in both professional and personal contexts.
Equally, having the opportunity to learn a specialised subject alongside like-minded people interested in the same niche topics and who want to build a career along the same path that you do is invaluable. Many post-graduates make friends for life during their studies, and develop a support network that helps them rise higher in their careers, alerting them to new opportunities and introducing them to other potential career allies.
The downsides: Cost
Despite these numerous benefits, pursuing a master’s degree is not without its challenges. One of the main obstacles is the cost. The price tag for a master’s degree can be considerable. In countries like the United States, tuition fees can reach tens of thousands of dollars. In Europe, the price is smaller but still significant. For the vast majority of students, the only option is to take on loans, which can result in significant debt. This raises the million dollar question: is the value of a master’s degree worth the financial burden?
The answer is probably different for everyone. It depends largely on each student’s specific career goals and the field they are entering. In industries where a master’s is required for advancement and leads to higher salaries, the return on investment may be well worth the initial expense. However, in other fields, the financial rewards may not be as immediate or as substantial, meaning prospective students should probably consider whether the cost aligns with their career aspirations. There’s no way to know for sure if a master’s degree will pay itself back in salary and career prospects, so it’s really down to each individual to make the choice. Try to speak to previous graduates of the course you want to do prior to applying in order to get a better idea of the employability prospects once the degree ends.
The downsides: Time
Another challenge is the time commitment. Master’s programs typically take one to two years of full-time study, although part-time and online options are available. For those who are already working, balancing the demands of a job with the necessary hours of postgraduate study can be difficult. Many professionals find themselves stretched thin as they try to manage coursework, work responsibilities, and personal commitments. Moreover, taking time away from work to study full-time might slow immediate career progress, even if it pays off in the long term.
For those contemplating a master’s degree later in life, the value of such a decision can be even more complex. Many professionals returning to school do so with the aim of changing careers or advancing in their current field. In these cases, a master’s degree can provide the specialised knowledge and credentials needed to make a significant shift. But for anyone with a family, the decision of whether to quit a salaried job in order to return to education is a huge one. Of course, it’s not essential that one quits their job, but maintaining a job alongside a master’s degree and family obligations is a tough ask and should not be undertaken without proper consideration in advance.
That said, there are alternatives for people in such situations in the form of microcredentials, such as short-courses or post-graduate certificates. As Peter McGuire writes in the Irish Times, “Microcredentials are one of the biggest innovations in education for decades. Rather than demanding learners commit to long courses, microcredentials allow them to study a particular module that can provide them with the specific skills and knowledge they need to move into –– or move forward –– in a role.” [6]
Trinity’s Professor Martine Smith is also an advocate of microcredentials. “Today, postgraduate courses come in all shapes and sizes. In Trinity, as well as in other third-levels, you can dip your toe in your water with a microcredential, which could be completed in six to 12 weeks,” she says. “You can accumulate a few microcredentials over time and emerge with a certificate, diploma or masters…So if a potential student is unsure, it’s really worth looking at these postgraduate certificates and microcredentials and then seeing if the course is right for you.” [7]
The who
Anyone can undertake a master’s degree. Obviously the most common students will be recent graduates looking to add another notch to their educational belt before entering the workforce, but there will also be those looking to change careers, those looking to develop specialised skills, and mature students looking for a new industry. The barriers to entry for those looking to undertake a master’s are not as stringent as they once were, with a growing number of courses available, a new accessibility afforded by online learning, and shorter certificates. As Smith says, “While there used to be a requirement for a 2.1 or 2.2, many third levels now recognise that life experience helps learners too. Indeed, this life experience can be even more relevant, as they really know what they are interested in, and they bring diversity in terms of age, experience and socio-demographic background.” [8]
What is the value of a master’s degree?
A master’s degree can serve as a powerful tool for career advancement, offering access to specialised knowledge, higher salaries, and increased job security. It can also foster personal growth, providing a sense of accomplishment and the development of critical skills. But the financial and time commitments involved should not be underestimated.
The true value of a master’s degree, then, depends on careful planning. Before embarking on postgraduate study, it’s crucial to evaluate your career goals and financial situation. Consider whether the degree is essential for advancing in your field or achieving your long-term professional objectives, and make an effort to understand the costs involved and to explore funding options, such as scholarships, grants, or employer-sponsored programs. Choosing the right program is critical. The reputation of the institution, the quality of the faculty, and the relevance of the curriculum to your field can all influence the ultimate value of the degree. For those who approach the decision thoughtfully and strategically, a master’s degree can be a transformative investment in both personal and professional success.
More on Education
Financial Education: What do Employers Owe their Employees?
The Future of Fund Distribution: Fintech and the Democratisation of Investment Solutions
Are Humanities Subjects – And Humanities Students – Doomed?
How to Approach a Career Pivot
Skills-Based Hiring: Transforming Ireland’s Employment Landscape
Sources
[1] https://www.forbes.com/sites/shodewan/2023/09/10/will-a-masters-degree-help-advance-your-career/
[2] https://www.forbes.com/sites/mayarichard-craven/2024/01/29/3-reasons-to-get-a-masters-degree/
[4] https://www.forbes.com/advisor/education/certifications/graduate-certificate-vs-degree/
[7] https://www.irishtimes.com/ireland/education/2024/03/12/what-are-the-benefits-of-a-postgraduate-course/ [8] https://www.irishtimes.com/ireland/education/2024/03/12/what-are-the-benefits-of-a-postgraduate-course/
Introduction
Guy Kawasaki, known for his pioneering marketing role at Apple and his work as an evangelist for Canva, has built a career on bold ideas, grit, and a no-nonsense approach to personal and professional development. His podcast, “Remarkable People,” and his book “Think Remarkable” offer potent insights into leadership, success, and fulfilment. Kawasaki provides unique insights and lessons from his experiences and interviews with remarkable figures like Jane Goodall and Steve Wozniak. This post will explore some of the core takeaways from a recent podcast interview I did with Guy on the 1% podcast, touching on themes such as growth, perseverance, work-life balance, and leadership.
1. The Growth Mindset: A Pathway to Resilience
One of the central themes of Kawasaki’s work, inspired by Carol Dweck’s research, is the concept of a growth mindset. Having a growth mindset means embracing challenges, seeing failures as opportunities for learning, and continuously pushing oneself to develop new skills. In the interview, Kawasaki delves into the importance of surrounding oneself with environments that foster this mindset. Whether in personal or professional settings, it’s crucial to be in spaces that support growth and development rather than stagnation.
Kawasaki highlights the danger of environments where people are either confined to rigid roles or told they are already perfect. These situations stunt growth because they discourage experimentation and vulnerability, which are essential for true progress. For those in difficult life circumstances—juggling multiple jobs or dealing with heavy responsibilities—he advises starting small. Curiosity and incremental steps toward improvement can still spark significant transformation over time.
In his own life, Kawasaki embodies the growth mindset, taking up new challenges like surfing at the age of 60. He acknowledges that growth is a long-term process and that excellence comes from sustained effort over time. “It took me ten years to become a mediocre surfer,” he laughs, underscoring the point that mastery requires patience.
2. Grit: The Fuel for Sustained Success
Angela Duckworth’s work on grit has deeply influenced Kawasaki’s thinking. Grit, as Kawasaki defines it, is the relentless perseverance that pushes you to keep going even when the odds are against you. Whether you’re working through failure or simply grinding through daily tasks, grit is what separates those who succeed from those who falter. He emphasises the importance of showing up, again and again, noting that most people give up far too soon.
Kawasaki points out that being remarkable isn’t about sudden moments of genius or lucky breaks—it’s about doing the “shit work” that others are unwilling to do and continuing to do it long after others have quit. This willingness to keep going, even when the path is tough, makes a person indispensable.
He offers this simple but profound advice: “Keep showing up.” Most people, he notes, will stop showing up after a short while, but those who persist—whether in business, personal growth, or even hobbies—are the ones who ultimately become successful. Grit, in Kawasaki’s eyes, is the real key to sustained achievement.
3. The Myth of Work-Life Balance
Kawasaki doesn’t mince words when it comes to work-life balance, especially for young professionals and entrepreneurs. His blunt message is that work-life balance is not something achievable at the beginning of a career. “If you’re 25 and you want to be remarkable, forget about work-life balance,” he says. Instead, he suggests viewing balance as something that happens over a lifetime. In the early stages of a career, you’re going to be overworked and underpaid. Later, if you play your cards right, you’ll find yourself overpaid and underworked.
Work-life balance is, in Kawasaki’s view, a long game. You may have to grind through long hours and tough conditions early on, but that investment pays off later with more flexibility and freedom. He urges young professionals not to fall into the trap of expecting a smooth, balanced life right out of the gate. “You can’t have a job where you’re working three hours a day from Bali and expect to be remarkable,” he quips. The path to success is messy, full of long hours, and often requires sacrifices.
4. Quitting vs. Persevering: Knowing When to Pivot
One of the hardest decisions in life, Kawasaki admits, is knowing when to persevere and when to pivot. He uses his own story of quitting law school after just two weeks to illustrate the complexity of this decision. For him, quitting led to a series of opportunities that ultimately shaped his career, but he acknowledges that there is no simple formula for knowing when it’s the right time to quit.
Steve Jobs once famously said that you can only connect the dots looking backward, and Kawasaki echoes this sentiment. It’s only in hindsight that we can see whether quitting was the right choice. However, the key is to stay curious and open to new possibilities, whether you quit, pivot, or persevere. “It’s the next step that matters,” Kawasaki notes. Remaining curious and engaged is what leads to the next opportunity, whether you’ve pivoted or stayed the course.
5. The Importance of Vulnerability
Vulnerability is a critical part of growth, Kawasaki insists, especially when adopting a growth mindset. In the podcast, he shares that failure is inevitable, and one must have a tolerance for it. Taking up surfing at 60 is a perfect example—Kawasaki knew he would be terrible at it initially, but he embraced the challenge anyway. He makes it clear that being willing to be bad at something is part of the journey toward being good at it.
For many people, especially those in leadership positions or public-facing roles, admitting failure or weakness feels impossible. But Kawasaki insists that embracing vulnerability is not just necessary for personal growth—it’s essential for effective leadership. Without it, individuals miss out on learning experiences and opportunities for deeper connections with others.
6. Making Yourself Indispensable
Another key takeaway from Kawasaki’s wisdom is the value of becoming indispensable in your field. Andrew Zimmer, a famous food personality, once advised Kawasaki that the way to succeed in life is to do the work that no one else wants to do and to keep showing up, even when the work isn’t glamorous. Kawasaki builds on this by explaining that those who are indispensable get more opportunities, more freedom, and ultimately more success.
“Being indispensable isn’t glamorous,” he admits. It often means doing the mundane or difficult tasks that others avoid. But over time, being reliable, hardworking, and consistent can open doors that talent alone cannot.
7. Grace: The Final Pillar
Kawasaki introduces grace as the third and final pillar in his book. While growth and grit are about personal development and perseverance, grace is about giving back. He suggests that remarkable people, in the later stages of their careers, often seek to make the world a better place. It’s not just about personal success anymore; it’s about how much good you can do for others.
Kawasaki admits he loves the alliteration of the three G’s—growth, grit, and grace—but grace, in particular, strikes a deeply philosophical note. At the end of one’s life, he argues, you are measured not by how rich or famous you became but by how much better you made the world.
Conclusion: Embracing the Three G’s
Guy Kawasaki’s lessons from our podcast interview and his book offer a practical, grounded, and deeply human approach to success. The key to a fulfilling and impactful life, according to Kawasaki, lies in mastering three essential pillars: growth, grit, and grace.
Growth is about embracing challenges, staying curious, and being open to learning. It’s about creating an environment, both personally and professionally, that supports continual development. Whether you’re trying something new at 60, like Kawasaki did with surfing, or pushing yourself in your career, growth requires courage and the willingness to be vulnerable.
Grit is the perseverance that keeps you showing up when things are tough. Kawasaki’s emphasis on grit highlights that success is not about overnight achievements but about consistently doing the hard work that others shy away from. Whether it’s showing up for daily practice or handling the mundane tasks no one else wants, grit is the fuel for long-term success.
Finally, grace is the idea that success is not just about personal gain but about making the world a better place. It’s about taking the high road, giving back to your community, and leaving a positive legacy.
In essence, Kawasaki’s insights remind us that becoming remarkable isn’t about being a genius or having the perfect opportunity. It’s about continuous growth, showing up with grit, and leading with grace. It’s a blueprint for anyone looking to create a meaningful, impactful life, whether in business, personal pursuits, or simply in day-to-day interactions.
Remarkable Minds: Insights on Leadership, Innovation, and Success with Guy Kawasaki – Podcast
More on Perseverance
The Art of the Impossible with Steve Kotler – Podcast
Beyond the Spotlight: Unravelling the Hidden Truths of Survivorship Bias
Introduction
Pepe Mujica is dying. Pepe Mujica has lived. The 89 year-old former “philosopher president” of Uruguay is a pivotal figure in his country’s history, having helped lead the transformation of his small South American nation into one of the world’s healthiest and most socially liberal democracies. He also used to rob banks as a Robin Hood-esque leftist urban guerrilla, tunnelled his way out of two prisons, endured 13 years of captivity, including two in solitary confinement in a hole in the ground, and survived six gunshot wounds during a 1970 confrontation with the police.
Mujica’s story is astonishing, but it’s not what he’s best known for. Rather, he became one of Latin America’s most influential and important figures in large part for his plain-spoken philosophy on the path to a better society and happier life.
In April of this year, Mujica, already battling an autoimmune disease, announced he would undergo radiation for a tumour in his oesophagus. He is under no illusions about the fact that his time is running short. But before he goes, he still has a great deal more to teach us on how to live a life of value.
Lessons from Pepe Mujica: Simplicity and humility
Mujica is notorious for his humble lifestyle. Despite his position as president, he chose to live on a small farm rather than the luxurious presidential palace. He recently explained that decision to The New York Times. “We have a house for the president. It’s four stories. To have tea you have to walk three blocks. Useless. They should make it a high school.” [1]
He also continued to drive an old Volkswagen Beetle, a car that became an iconic symbol of his simplicity, whilst being the most powerful figure in the land. When a wealthy Arab sheikh offered to buy the car off him for $1 million, Mujica declined, saying, “This car is part of my life. I have no intention of selling it.” [2]
The palace was not the only ostentatious aspect of presidential life that grated him. “I once went to Germany and they put me in a Mercedes-Benz. The door weighed about 3,000 kilos. They put 40 motorcycles in front and another 40 in back. I was ashamed.” [3]
Mujica’s commitment to a simple life isn’t just about personal preference; it’s a reflection of his broader philosophy. He believes that material wealth does not equate to happiness. Speaking about his nickname as ‘the poorest president’, he said, “I don’t feel poor. Poor people are those who only work to try to keep an expensive lifestyle and always want more and more.” [4]
The modern world’s obsession with consumerism confounds and disappoints him. “It has generated a subliminal culture that dominates our instinct,” he says. “It’s subjective. It’s unconscious. It has made us voracious buyers. We live to buy. We work to buy. And we live to pay. Credit is a religion. So we’re kind of screwed up.” [5]
It can be hard to break from the trappings of the modern world, but it’s likely that we all have some aspects of it that we could successfully cull if we just made the effort. Mujica recommends we do. “You’re free when you escape the law of necessity,” he says, “when you spend the time of your life on what you desire. If your needs multiply, you spend your life covering those needs. Humans can create infinite needs. The market dominates us, and it robs us of our lives. Humanity needs to work less, have more free time and be more grounded. Why so much garbage? Why do you have to change your car? Change the refrigerator? There is only one life and it ends. You have to give meaning to it. Fight for happiness, not just for wealth.” [6]
He’s not unaware that these principles are out of step with modern practices. “I don’t fit in today’s world,” he told The New York Times. “You’re talking to a strange old man.” [7]
Lessons from Pepe Mujica: Embrace empathy and solidarity
Mujica’s presidency was marked by his deep sense of empathy and solidarity with the poor and marginalised. He donated about 90% of his presidential salary to charities that worked to improve the lives of the underprivileged. His policies focused on social justice, equality, and addressing the needs of the most vulnerable members of society.
One of the most powerful examples of his empathy was his decision to offer asylum to six Guantanamo Bay detainees in 2014. This move, which was highly controversial both in Uruguay and internationally, was motivated by his deep commitment to human rights. Mujica defended his decision by stating,”This is a question of human solidarity.”
Whether one agrees with the decision or not, one can respect that Mujica believed in sticking to his principles even if it was unpopular. It’s all too easy to trade values for personal gain. Authenticity and a clear, unbreachable set of principles can go a lot further.
Lessons from Pepe Mujica: Resilience and positivity
During Uruguay’s military dictatorship, Mujica was shot six times during a confrontation with the police and spent 13 years in prison, much of it in brutal conditions, namely in a small hole of solitary confinement, stripped of human contact. Mujica has spoken of the pain and difficulty of this period, during which paranoia and auditory hallucinations accelerated his torment. Still, he found a way to cope, developing mental strategies that helped pull him through. He talked to insects and animals and focused on maintaining his mental resilience. “We must learn to speak with the person inside us,” he says. “It was him who saved my life. Since I was alone for many years, that has stayed with me.” [8]
In 1985, after the dictatorship had finally ended, Mujica was released from prison. Twenty five years later he was the country’s president. His positive spirit endures to this day. Why? “Because life is beautiful. With all its ups and downs, I love life. And I’m losing it because it’s my time to leave. What meaning can we give to life? Man, compared to other animals, has the ability to find a purpose. Or not. If you don’t find it, the market will have you paying bills the rest of your life. If you find it, you will have something to live for. Those who investigate, those who play music, those who love sports, anything. Something that fills your life.” [9]
Lessons from Pepe Mujica: Foster a connection with nature
During his presidency, Mujica was a vocal advocate for environmental sustainability. He often criticised the global economic system for its destructive impact on the environment. In a speech at the United Nations, he said, “We have destroyed the real jungles and sown anonymous cement jungles. We have tackled a sedentary lifestyle with walking, insomnia with pills, solitude with electronics. Can we be happy when we are so far from the human essence?…I reiterate that what some call our planet’s ecological crisis is the result of the overwhelming triumph of human ambition. This is our triumph and our defeat, given our political impotence to fit into the new era that we have helped to build without realising it.” [10]
Mujica’s deep connection with nature has always been a central part of his life. Living on a farm with his wife, he cultivates his own vegetables and lives in harmony with the land. This connection to nature informed his environmental policies and his belief in sustainable living.
“When I’m in the field working with the tractor,” he says, “sometimes I stop to see how a little bird constructs its nest. He was born with the program. He’s already an architect. Nobody taught him. Do you know the hornero bird? They are perfect bricklayers. I admire nature. I almost have a sort of pantheism. You have to have the eyes to see it. The ants are one of the true communists out there. They are much older than us and they will outlive us. All colony beings are very strong.” [11]
Lessons from Pepe Mujica: Read and communicate (but not on your phone)
It is perhaps unsurprising that a man of such an ascetic nature has little love for the smartphone, having thrown his own away four years ago. “It made me crazy. All day talking nonsense…It’s not the phone’s fault. We’re the ones who are not ready. We make a disastrous use of it. Children walk around with a university in their pocket. That’s wonderful. However, we have advanced more in technology than in values.” [12]
He would rather we trade virtual communication for real life conversations. “Nothing replaces this,” he told The New York Times, referring to human-to-human interaction. “This is non-transferable. We’re not only speaking through words. We communicate with gestures, with our skin. Direct communication is irreplaceable.”
He laments that people so often struggle to find the time to read today. “I have one thing,” he says, “the magic of the word…The book is the greatest invention of man.” [13]
What can we learn?
Some will read Pepe Mujica’s words and philosophy and find resonance in them. Modern society is one of excess. It is virtualised, commercialised and draining on time, finances and energy. A lot of people want to get away from that, whether permanently, briefly or some middle ground. Others will see these words as hippy nonsense and socialist hooey. It’s doubtful Mujica himself would care much either way. For the extraordinary life he’s lived, when asked by the New York Times how he’d like to be remembered, his answer was characteristically simple and playful: “Ah, like what I am: a crazy old man.” [14]
More on Positivity
How Adopting a More Positive Mindset Can Transform Your Work
Optimism is a Force Multiplier
The Progress Principle: or How to Stop Worrying and Celebrate the Small Wins
Sources
[2] https://www.theguardian.com/world/2014/nov/07/uruguayan-president-jose-mujica-offered-1m-blue-beetle
[4] https://www.bbc.co.uk/news/magazine-20243493
[10] https://speakola.com/political/jose-pepe-mujica-address-united-nations-2013
Introduction
At some point or other, we’ve all wished we could simply press a great big reset button on our career and start over. We’d make better choices, follow the right path, take that risk, do it all so much better. Or at least that’s what we tell ourselves.
Sometimes that reset is impossible. Other times it is not just possible but necessary. Global circumstances, economic pressures and technological advances have left some industries redundant, with others soon to join them –– the dodo has become somewhat of a business trendsetter. A number of workers will need to retrain if not now then soon. Others simply may want a refresh, following either their passions or the money to pastures new. Either way, awaiting them is the prospect of starting again –– a mammoth task but an achievable one.
The numbers
In December 2022, LinkedIn and CensusWide asked more than 2,000 U.S. workers about their professional plans for the coming year. It found that 72% of Gen Zers and 66% of millennials were considering changing careers. For Gen X and baby boomers the numbers were 55% and 30% respectively [1]. Meanwhile, a Microsoft survey from 2021 found that over 41% of workers were considering quitting or changing professions that year. [2]
That’s a lot of people pondering a fresh start. This article will delve into why they might want one –– and how they should go about getting it.
The why: Professional stagnation
A timeless reason for which one might want to start over is professional stagnation. Professional stagnation can affect individuals or even entire businesses. On a corporate level, stagnation tends to occur when a business fails to innovate or adapt to market changes, leading to declining profitability and market share. As an example, during the pandemic, we all bore witness to just how quickly a once stable company can fall behind if they fail to freshen things up. Many businesses were forced to make a tough choice: adapt or die.
For individuals, professional stagnation might manifest as a lack of career progression or job satisfaction. According to a report by Gallup, only 33% of employees in the US feel engaged at work [3]. The rest feel disconnected from their jobs and are looking for new opportunities. In Ireland, workers report higher-than-average job dissatisfaction rates compared to other European countries. A 2020 survey by the Economic and Social Research Institute (ESRI) found that 30% of Irish employees felt underutilised in their roles, leading to disengagement and stagnation [4]. The need to start over, either by switching jobs, upskilling, or transforming business practices, is often driven by the desire to break free from these unproductive cycles.
The why: Business failure
Another common reason for starting over is business failure. According to data from the Bureau of Labor Statistics, approximately 20% of small businesses fail within the first year. By the end of the second year, 30% will have failed. By the end of the fifth year, about half will have failed [5]. In Ireland, Limerick Chamber of Commerce president, Kieran MacSweeney, a former senior vice-president of US technology multinational Avocent, says that “80% of traditional start-ups fail because they don’t have the necessary blend of technical, entrepreneurial and management skills. Typically 40% of these businesses will even fail in the first year of operations; 80% of those that survive the first five years will fail in the second five.” [6]
In other words, failure is pretty common, and while it can be disheartening, failure also presents an opportunity to learn from mistakes and start over with a more informed perspective. The willingness to start anew, even after a setback, is a hallmark of resilience and entrepreneurial spirit. As Henry Ford said, “Failure is simply the opportunity to begin again, this time more intelligently” [7].Or, as the legendary Italian Stallion put it, “It ain’t about hard you can hit. It’s about how hard you can get hit and keep moving forward.”
The why: Personal fulfilment
For individuals, the decision to start over often stems from a lack of personal or professional fulfilment. The truth is a lot of people leave school or university unsure what they want to do with their lives. Oftentimes they get the first job they can because there are bills to be paid. Before they know it, they feel trapped on a career ladder they never wanted to climb and are either too prideful to take a lower rung on an adjacent ladder or too afraid to make a leap that might see them fall.
It can feel overwhelming changing careers. But it shouldn’t. According to the US Department of Labor, the average person will change careers 5-7 times during their working life. Approximately 30% of the total workforce will change jobs every 12 months. [8]
The great appeal of starting over, whether by changing careers or launching a new business, is that it provides us with an opportunity to finally align our work with our passions and values. Sometimes that means taking a pay cut to enter a new sphere and start from the bottom or even to return to studying. The hope, though, is that these sacrifices prove worth it in the name of waking up everyday with the knowledge that what awaits you is a job you love, not a desk that long ago started to feel like a prison.
Tomas Chamorro-Premuzic, a professor of business psychology at University College London and Columbia University, writes in Harvard Business Review that all job pivots boil down to our ‘professional identity’.
“Our identity is influenced not just by our past work experiences,” he says, “but also by our projected ones. When we feel that we are headed in a direction that is not congruent with our self-concept, such that our perceived “actual self” is out of sync with our “ideal self,” we are motivated to take action and change.” [9]
In recent years, it’s often the case that workers are looking to start again in industries or roles that emphasise social good, sustainability, and personal well-being. People want to feel like they are contributing to a better tomorrow, or at least not towards worsening today.
The why: Tech take-over
Herminia Ibarra of the London Business School divides the causes for professional change at the individual level into two key categories: situational drivers and personal drivers [10]. We’ve already spoken about the personal drivers, but situational drivers are just as prominent. One of the core situational drivers behind a professional pivot or fresh start in today’s world is job displacement brought about by technological advancements, especially AI.
According to one report from Goldman Sachs, AI could potentially replace the equivalent of 300 million jobs globally [11]. Around 30% of Irish employment is in occupations that are negatively exposed to the impact of artificial intelligence, according to a number of new reports from the Department of Finance and Department of Enterprise, Trade and Employment [12].
We’re already seeing a greater number of tasks fall under AI’s remit. And while there are very few jobs that are entirely safe from undergoing a technological takeover, there are some that are more safe than others. As such, in recent years a number of people have decided to pivot their career to an industry a little further away from AI’s clutches.
The how: Learning from past mistakes
For those who are shifting careers in the wake of some professional or personal failure, an integral part of starting over is the ability to learn from whatever past mistakes brought you here in the first place. How we react to failure says a lot about who we are –– and it can be the thing that sets us apart. Rather than viewing failure as a dead-end, successful entrepreneurs are often the ones that see it as a learning experience. This mindset is crucial for personal and professional growth. As Steve Jobs put it: “I’m convinced that about half of what separates successful entrepreneurs from the non-successful ones is pure perseverance.” [13]
A report by Enterprise Ireland found that only 10% of failed Irish entrepreneurs attempt to launch a second business. Yet globally, nearly 60% of CEOs who have founded a startup valued at $1B+ have past founder experience [14]. It’s vital to not give up after the first setback. Very few successful people were that way from the start. Failure is a necessary step to success. To succeed without having first gone through failure and learnt from it, emerging with the scars, is only likely to set one up for a greater failure down the line when the stakes are higher. It’s best to get our failures out the way when the stakes are as low as possible.
The how: Assessing the situation
Before taking the first steps in any new direction, ask yourself some questions. Why is it you want to change careers? Is it that you’ve been forced out of your old one and just want money or that you want to pursue your passion? Do you have connections already in that world that you could reach out to? Will you need to study –– a full degree or a diploma? What transferable skills do you have? Why do you want to pursue this new venture?
Allowing yourself a period of self-assessment is vital to ensure you head in the right direction moving forward. If you don’t trust your own judgement to be objective, reach out to others. That could be through skills audits or consultations with career coaches or by reaching out to former bosses and colleagues for feedback. Is there someone in the field you’re joining that inspires you whom you could reach out to for help? Why not capitalise on their knowledge, or even lean on them as a mentor figure –– 97% of individuals with a mentor say they find the experience to be a valuable one [15].
There’s no point jumping into your new career in a kamikaze fashion. Take the time to make sure that you know why you’re doing what you’re doing and where it is you want to go.
The how: Setting clear goals
After you’ve assessed your circumstances, it’s time to set clear, achievable goals. For businesses, this could mean expanding into new markets, adopting new technologies, or focusing on customer satisfaction. In Ireland, many businesses have turned to digital transformation to adapt to the post-pandemic economy. According to a survey published in the Irish Times, 98% of business leaders said technology played a key role in navigating the pandemic, while 68% said they had shortened the target window for digital transformation. [16]
On a personal level, setting goals for career development or personal fulfilment is just as important. Make your goals SMART and build habits. Remember, it’s about getting 1% every day, not biting off more than you can chew.
The how: Monitoring progress and adjusting
Once you’ve got your plan in place, it’s time to take action. But the hard work doesn’t stop there. Starting over is not a linear process –– it requires regular monitoring and adaptability to make adjustments as you go along. Track your performance, review your goals, and consistently evaluate your progress. Getting on the right path is hard. Staying on it is harder still.
How to start over
Starting over is a difficult but achievable task. Whatever your motive for starting afresh, be it professional stagnation, business failure, or personal dissatisfaction, the decision to start over requires careful consideration if you are to eventually find yourself in a better, more fulfilling place. By undertaking a process of self-reflection, setting clear goals, building a support system, and regularly monitoring your progress so as to keep yourself from straying from the path, we can start over and emerge stronger and more successful on the other side.
Sources
[4] https://www.esri.ie/pubs/BKMNEXT412.pdf
[5] https://www.entrepreneur.com/starting-a-business/the-true-failure-rate-of-small-businesses/361350
[6] https://www.irishexaminer.com/business/arid-20134409.html
[7] https://www.brainyquote.com/quotes/henry_ford_121339
[9] https://hbr.org/2023/08/what-to-ask-yourself-before-a-career-pivot
[10] https://flora.insead.edu/fichiersti_wp/inseadwp2004/2004-97.pdf
[11] https://www.forbes.com/sites/kathycaprino/2023/10/21/how-to-make-a-successful-career-change-at-40/
[15] https://nationalmentoringday.org/facts-and-statistics/
More on Failure
Bouncing Back from Professional Failure
Beyond the Spotlight: Unravelling the Hidden Truths of Survivorship Bias
Introduction
The stereotype of the young, hoodie-clad, college dropout founder disrupting industries has long been a staple of the startup narrative. If you’ve seen The Social Network, you know the mould. But recent research published in Harvard Business Review would suggest that a seismic shift is underway. The average age of successful startup founders is steadily climbing, with a growing number of entrepreneurs in their forties and fifties proving that age is no barrier to innovation and success; quite the opposite, in fact, it’s these older founders who are thriving.
The myth of the young entrepreneur
For decades, the tech industry has been dominated by the image of youthful, energetic founders. High-profile success stories like Mark Zuckerberg and Evan Spiegel have perpetuated this stereotype. They found startling success young, grew huge profiles, and all of a sudden grey hairs were seen as a barrier to becoming a major player. Indeed, analysis of all founders who have won TechCrunch –– the annual conference hosted in San Francisco, New York, Berlin and London where new technology startups compete in front of venture capital investors and media –– found that the average age of the CEO at the time of founding the company was just 31. [1]
To further prove that youth was indeed the hottest ticket in town, research also shows that the founders of the fastest-growing startups in 2015 according to Inc. magazine had an average age of 29 at the time of founding [2]. Paul Graham, a cofounder of Y Combinator, once quipped that “the cutoff in investors’ heads is 32… After 32, they start to be a little sceptical.” [3]
For a while, then, it seemed that as well as obviously needing a good product and plugging a gap in the market, the most important Silicon Valley success factor was youth. Outside of Silicon Valley, it was a treasured commodity as well. But it shouldn’t be. At least, not anymore.
Older, wiser
Research by Pierre Azoulay, Benjamin F. Jones, J. Daniel Kim, and Javier Miranda, published in Harvard Business Review, shows that the average age of entrepreneurs at the time they founded their companies is 42. They arrived at that number by leveraging confidential administrative data sets from the US Census Bureau.
The sceptical amongst you may look at that number and spot a missing point –– that sure, the average age of founders may be 42, but that’s because most founders are starting small, independent businesses; it is not the same as a Zuckerberg; to be successful, youth is still the defining factor. Let’s address that idea.
The researchers were well aware that such a complaint could be lobbied against them, admitting that “the vast majority of these new businesses are likely small businesses with no intentions to grow large (for example, dry cleaners and restaurants).” As such, they honed their research to “focus on businesses that are closer in spirit to the prototypical high-tech startup” [4].To be considered for analysis, a company needed to have been granted a patent, received VC investment, or operated in an industry that employs a high fraction of STEM workers. They also factored in location, particularly whether the business was in an entrepreneurial hub such as Silicon Valley. The findings? Again, the average high-tech founder was found to be in their early forties.
Okay, so the age of high-tech startup founders matches the broader trend. But simply starting a tech company does not guarantee one success, far from it. These people could have been terrible founders who crashed and burned, proving that youth was still the answer, not middle-age. So the researchers refined their analysis again, this time examining the top 0.1% of startups based on employment growth in their first five years. This time, the average age of founders at the time they started their company was…forty-five.
Before anyone pushes back that employment growth is not the best way to measure success, the researchers add the following: “The age finding is similar using firms with the fastest sales growth instead, and founder age is similarly high for those startups that successfully exit through an IPO or acquisition. In other words, when you look at most successful firms, the average founder age goes up, not down. Overall, the empirical evidence shows that successful entrepreneurs tend to be middle-aged, not young.” [5]
The researchers go on to add that there is a slight misconception and over glorification of the young outliers of this trend such as Bill Gates, Steve Jobs, and Jeff Bezos. These iconic founders may have started their businesses while still supremely young, but, as the researchers point out, their success as CEOs did not come until much later in their lives.
“The growth rates of their businesses in terms of market capitalization peaked when these founders were middle-aged,” the researchers write. “Steve Jobs and Apple introduced the company’s most profitable innovation, the iPhone, when Jobs was 52. Jeff Bezos and Amazon have moved far beyond selling books online, and Amazon’s future market cap growth rate was highest when Bezos was 45.” [6]
So, since it is middle-aged founders thriving today, and since even the young founders tend to find their footing once they reach middle-age, what is it about this time of life that breeds success?
The experience factor
Let’s start with the obvious. Older entrepreneurs bring a wealth of experience to the table. They have often worked in established companies, gaining invaluable insights into business operations, management, and problem-solving. This knowledge equips them with a deeper understanding of market dynamics, customer needs, and the challenges of scaling a business.
Moreover, older entrepreneurs tend to possess stronger financial resources, allowing them to invest more capital into their startups. They are also less reliant on external funding, reducing the pressure to achieve rapid growth and enabling them to focus on building a sustainable business. There is an interesting question there that would require further research to answer: do middle-age founders thrive because their existing capital gives them freedom to pursue their ideas without being over concerned as to external stakeholders, in the same way that young upstarts like Zuckerberg enjoyed such success because they had the freedom of youth on their side –– they were beholden to their own ideas and no one else’s, at least at the start? In other words, is it creative freedom, born from either youth or capital, that is the true core to success?
Obviously another pivotal factor is the age-old truism: it’s about who you know, not what you know. Entrepreneurs with established careers often possess deep industry knowledge and extensive professional networks. This expertise can be invaluable in identifying market opportunities, securing partnerships, and building customer relationships. Their existing networks can also provide access to valuable resources, such as mentors, investors, and potential customers. Unlike their younger counterparts, older founders have the right numbers to dial.
It’s also possible that technological innovation and shifting societal attitudes have opened doors to older founders. It’s less common for workers to stay in a job for life anymore. Rather, when they feel they have the requisite industry knowledge, they think there’s no reason not to go out on their own. They are backed up by an endless supply of knowledge as to how to go about it thanks to online information. For many, they will also want more flexibility in the work life and see starting their own business as a good way to achieve it.
Challenges
Up until now we’ve made becoming a successful middle-aged founder sound like a breeze –– they experience all the success, have all the right contacts and financial freedom –– but of course there are a number of challenges that come with starting a company in your forties and fifties. One of the primary hurdles is the perception of being “too old” for the fast-paced startup world. This can impact access to funding, talent acquisition, and overall credibility.
As Azoulay, Jones, Kim, and Miranda write in their research, many VCs still prefer to bet on younger founders in spite of the proof that middle-aged ones are currently more likely to find success. They suggest two reasons for that, which are worth laying out in full.
“First, many VCs may operate under a mistaken belief that youth is the elixir of successful entrepreneurship — in other words, VCs are simply wrong. Though it is tempting to see age bias as the leading explanation for the divergence between our findings and investor behaviour, there is a more benign possibility: VCs are not simply looking to identify the firms with the highest growth potential. Rather, they may seek investments that will yield the highest returns, and it is possible that young founders are more financially constrained than more experienced ones, leading them to cede upside to investors at a lower price. In other words, younger entrepreneurs may be a better “deal” for investors than more experienced founders.” [7]
Going forwards
The trend towards older entrepreneurship is likely to continue as the population ages and the startup ecosystem matures. As technology becomes more accessible and the barriers to entry for starting a business decline, we can expect to see even more individuals from diverse age groups pursuing entrepreneurial ventures. Think about the potential Gen Z and Alpha have to be successful entrepreneurs in the future having grown up with computers and the internet, all fully fluent in the digital language from the off. The shift in demographics going forward will bring new perspectives, experiences, and approaches to problem-solving, which should enrich the startup landscape and drive innovation.
The grown-ups are talking
The conventional wisdom that young, tech-savvy individuals are the sole architects of startup success is increasingly outdated. A compelling body of evidence suggests that the entrepreneurial landscape is maturing, with middle-aged founders emerging as a formidable force. Possessing a wealth of experience, established networks, and often a more calculated approach to risk, these entrepreneurs are redefining the entrepreneurial archetype.
While challenges such as bridging the digital divide and overcoming age-related stereotypes exist, the potential rewards for both individuals and the broader economy are substantial. By leveraging their unique strengths and adapting to the evolving business environment, middle-aged entrepreneurs can significantly contribute to innovation and job creation. In fact, as the data shows, they already are.
On Ageism
Sources
Introduction
Prices are high. Inflation is high. Interest rates are high. Getting by on the traditional 9-5 is not as simple as it should be. As such, increasingly workers are turning to a side hustle to make ends meet. For many, balancing a full-time job while pursuing a side hustle is not just a means of boosting income but also a way to fulfill entrepreneurial aspirations, hone new skills, and achieve personal growth. However, managing both can be a challenging endeavour, demanding careful planning, time management, and strategic decision-making.
By the numbers
In June of this year, more than half (54%) of Americans said they’d adopted a side hustle to supplement their primary source of income in the last 12 months [1]. In the UK, 43% of Brits have a side venture [2]. Gen Zers are most likely to have a side gig (71%), but millennials are close behind (68%). [3]
Do you need a side hustle?
The motivations for taking on a side hustle are diverse. Maybe it’s necessary to make rent, with the cost of living crisis making just getting by a difficulty for many; additional income can provide financial security, help pay off debts, or fund personal goals such as travel, education, or home ownership. Side hustles also offer opportunities to learn new skills or enhance existing ones, which can be beneficial for career advancement. Many people have hobbies or interests they wish to pursue professionally, passion projects which might not be feasible through their full-time job. Additionally, a side hustle can serve as a testing ground for business ideas, potentially leading to full-time entrepreneurship.
Before committing to the delicate balancing act of juggling two jobs, you need to assess your capacity to do so. Consider the intensity of your full-time job, your personal commitments, and your energy levels. You need to be realistic about the time and energy you can dedicate to a side hustle without compromising your well-being. If you’re already swamped at your full-time job then taking on an additional workload is a bad idea –– you’ll burn out quickly and end up more likely to lose your original job than to earn any additional income.
Equally important is choosing the right side hustle. It should align with your skills, interests, and available time. For those pursuing a passion project, this is of course already baked in, equally so for anyone looking to set up a personal business on the side. But for those less sure where to start, who are simply looking for a little bit of extra cash flow, consider whether you can leverage existing skills or explore new areas of interest. Evaluate the time commitment required and select a side hustle that fits your schedule. Most importantly, choose something you enjoy to maintain motivation and prevent burnout.
As Forbes Council Member John M. O’Connor writes of his own journey, “The times I tripled up [my workload] to “make more money” but did it just for the money, it created a universal imbalance and injured relationships and the effectiveness of my other work” [4]. Learn from his mistakes.
Managing your time
A lot of balancing a full-time job and a side hustle comes down to time management. Writing in Forbes, Caroline Ceniza-Levine, founder of the Dream Career Club and author of Jump Ship: 10 Steps To Starting A New Career, recommends setting up “a clear timeline for how long you plan to juggle the two and decide what success markers you want to see along the way to ensure you are on the right track.” [5]
Freelance writer and stand-up comedian Virginia Hogan implores workers pursuing a passion project to “[set] aside specific hours for it. Not a specific amount of time — specific hours. Block out on your calendar when you’re going to write that short story or build that desk. It might only be once a week, but make sure it’s planned.” [6]
Essentially, the important thing is to be organised. Do not allow your side hustle to linger over you as one further task to undertake, like changing the bedsheets or going to the gym. Because let’s face it, we all know how easy it is on a lazy day to put those activities off; all of a sudden the routine is on the backburner and difficult to re-ignite.
Just as it’s important to know yourself in order to get an idea of what kind of side hustle you should be engaged in –– where your skills lie, what skills you want to learn –– it’s also important to know yourself so as to better schedule your two income streams. “Pay attention to when you do your best work,” recommends Ceniza-Levine. “If you know that you are just too unfocused after a full day of work, then you have to get up early for your side business. Or you have to clear your weekends for it.” [7]
What is your worth?
Let’s say you’re just getting started on your side hustle journey, and that you’ve chosen a career path that allows you to dictate rates, as opposed to picking up a second salaried job. How do you know what to charge?
Bernadette Joy, a leadership coach specialising in financial freedom, having paid off $300,000 of debt in three years and invested enough to retire by 40, recommends matching your revenue goal to your housing (or any other specific financial target you want to reach). When she first started her side hustle, she wanted to earn enough to pay off her monthly mortgage. That was it. To do that, she needed to make $2000 a month (on top of her salary, which she would use for all other spending and saving).
She realised that, “To reach $2,000, I could choose from selling to (a) 100 customers at $20;
(b) 20 customers at $100; or (c) Two customers at $1,000.”
“I ultimately chose the middle option,” she says, “rationalising on average I needed one customer every weekday, and I could still take the weekends off. I earmarked every sale toward my mortgage and that made each sale feel more rewarding.” [8]
The advice is simple. Pick a financial goal. Work out how much you’ll have to charge and how many clients you’ll need to make that goal. Put all the money you earn towards that goal.
After that, your savings will take care of themselves.
Getting the balance right
Now, let’s say you’ve set up your side hustle –– you’ve set your goals and have set aside the appropriate amount of time each week or month to meet them. How do you ensure all this new work doesn’t interfere with your day-to-day job? First, you “need to decide your objectives for your current job,” according to Ceniza-Levine.
“Do you want to just get by, or are you going for a promotion? Is there restructuring or other changes afoot where you have to pay closer attention? The job/ side business juggle isn’t only for people who hate their job. Maybe you like your job enough but want an extra and/or different stream of income. If you like your job, you need to be clear about your goals there as well, not just for the new business.” [9]
It could be that you care little for your 9-5 and are setting up this new venture as a way to, with luck, eventually pivot to your side hustle full time. If that’s the case, in theory you could phone it in at the office, just doing enough to scrape by, then dedicating the bulk of your energy to your preferred work. This is a nice idea, but can be flawed in practice.
If you work a 9-5, you’re at your day job eight hours a day. If all that time, you are doing the bare minimum, that is going to impact you. There exists such a thing as momentum. If you slouch around for eight hours a day, you run the risk of becoming a slouch –– and then where will your new venture be? Not to mention you run the risk of getting fired for lousy performance; all of a sudden your new scheme to make more money has left you stripped of your financial base.
You’re also likely to burn relationships. People around the office or clients will see you as someone not worth doing business with. They may remember that when you’re going it alone and reaching out to them for help later. It’s better to make yourself a good employee and carry that through to all aspects of your work, in-office and out. As James Clear, author of Atomic Habits, writes: “If you’re looking to make a change, then I say stop worrying about results and start worrying about your identity. Become the type of person who can achieve the things you want to achieve” [10]. Don’t be someone who works hard on just one thing; be a hard worker.
It could be that you do also have some boring, administrative work to do as part of your day to day job. And as noted earlier, you should know yourself well enough to know what time of day you tend to work best. Try and get this less engaging work done during times when you’re in a bit of a lull anyway, rather than wasting your best energy on them. As Virginia Hogan more bluntly puts it, “Use your least productive times to do boring work on your employer’s dime.” [11]
Hogan also recommends organising work based on how badly other people are depending on it. She calls this approach her “Avoid Receiving Angry Emails” plan. “This is loosely defined,” she writes, “but I mean whether or not there will be professional consequences for you if you don’t complete tasks in a timely manner.” [12]
You don’t want your day job and your side hustle to overlap. But if you find yourself in a position where you’re facing potential negative professional consequences in one endeavour without much to do in the other, there are exceptions to be made. But don’t normalise it. It will come back to bite you.
Hustling
Juggling a full-time job and a side hustle in today’s high-cost, high-inflation economy is, for many, not merely a trend but a necessity. But the challenge of balancing these dual roles requires strategic planning and diligent execution. Workers need to be realistic about their capacity and the demands of their full-time job. Without careful consideration, the risk of burnout and potential negative impacts on their primary employment increases. Effective time management is key. side hustles should be well-planned, with assigned hours every week and a clear, attainable fiscal target in mind. By entering into a side-venture with these things in mind, one can grow their income, develop their passions, and learn new skills for life.
More on Time Management
Oliver Burkeman Four Thousand Weeks: Time And How To Use It – Podcast
Manage Your Energy, Not Your Time
How to Focus and Become Indistractable with Nir Eyal – Podcast
Sources
[2] https://www.finder.com/uk/business-banking/side-hustle-statistics
[11] https://www.forbes.com/sites/ginnyhogan/2023/04/17/how-to-balance-your-full-time-job-with-your-side-hustle/ [12] https://www.forbes.com/sites/ginnyhogan/2023/04/17/how-to-balance-your-full-time-job-with-your-side-hustle/
Introduction
The traditional landscape of investment management, dominated by high minimums, opaque fees, and limited access, is undergoing a seismic shift. Fueled by the relentless march of technology, financial technology (Fintech) is revolutionising the way investment products are distributed, ushering in an era of democratisation. This article delves into the transformative role of Fintech in making investing more accessible, efficient, and personalised for a wider audience.
Tech, tech, boom
As Deloitte acknowledges in the company’s paper ‘How can Fintech facilitate fund distribution’, “Fintech is more than a buzz word. It is a game changer in the operating model of asset managers, distribution intermediaries, and service providers” [1]. McKinsey research shows that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2022 and 2028. [2]
Advancements in technology have always been part of the financial world, but the scale of transformation experienced in the 21st century is without precedent. “Digital innovation has brought major improvements in connectivity of systems, in computing power and cost, and in newly created and usable data,” say Feyen, Frost, Gambacorta, Natarajan and Saal in their Bank for International Settlements paper. “These improvements have alleviated transaction costs and given rise to new business models and new entrants.” [3]
Separate McKinsey research shows nearly half of all US consumers utilised fintech products in 2021 [4], while 84% of UK respondents to a 2022 Plaid survey reported using Fintech every day [5]. Meanwhile, venture capital funding raised by fintech firms escalated from $19.4 billion in 2015 to $33.3 billion by 2020 [6]. This is an industry on the up.
The rise of robo-advisors
Algorithmic investment management, popularly known as robo-advisors, has emerged as a game-changer in fund distribution. These automated platforms leverage sophisticated algorithms to create and manage personalised investment portfolios for clients. Through a series of questionnaires, robo-advisors assess an investor’s risk tolerance, financial goals, and investment time horizon. Based on this data, they construct a diversified portfolio of low-cost exchange-traded funds (ETFs) and rebalance it periodically to maintain alignment with the investor’s goals.
The number of users in the robo-advisors market is expected to reach 34.020 million by 2027 [7]. The appeal lies in their accessibility. Unlike traditional wealth managers who cater primarily to high-net-worth individuals, robo-advisors typically require no minimum investment amount. This opens the door for a new generation of investors, particularly millennials and Gen Z, who may have smaller investable assets but a strong desire to participate in the market. Additionally, robo-advisors offer significant cost advantages. Their automated nature eliminates the need for human advisors, translating to lower fees compared to traditional investment management services.
However, robo-advisors are not without limitations. Their reliance on algorithms limits their ability to offer complex investment strategies or cater to individuals with unique financial situations. Additionally, the lack of human interaction may not suit investors seeking personalised advice and emotional support during market volatility.
The power of online platforms
Online brokerage platforms are another significant force shaping the future of fund distribution. The online trading market was valued at $10.21 billion in 2022 [8] and is likely to reach $13.3 billion by 2026 [9]. These platforms provide investors with a user-friendly interface to research, buy, and sell various investment products, including stocks, bonds, ETFs, and mutual funds. They offer a plethora of educational resources, market analysis tools, and real-time data feeds, empowering investors to make informed investment decisions.
The rise of fractional shares, facilitated by online platforms, further democratises access to the market. Traditionally, investors needed to purchase whole shares of a company, which could be cost-prohibitive for high-priced stocks. Fractional shares allow investors to buy a portion of a share, enabling them to diversify their portfolios with even limited capital.
Furthermore, online platforms have ushered in the era of commission-free trading. This eliminates the traditional per-trade fees charged by brokers, significantly reducing investment costs and making frequent trading more accessible. However, concerns linger about the potential impact of commission-free trading on investor behaviour. The ease of execution may encourage impulsive trading practices, ultimately hindering long-term investment goals.
The mobile revolution
Smartphones have become ubiquitous, and Fintech is capitalising on this trend by offering mobile investment apps. These apps provide on-the-go access to investment accounts, allowing users to monitor their portfolios, place trades, and stay informed about market movements. The convenience and immediacy offered by mobile apps are particularly attractive to younger generations accustomed to a mobile-first experience. In 2021, more than 130 million people traded stocks using online trading apps. [10]
Mobile apps also have the potential to gamify investing, making it more engaging and accessible to a broader audience. Features such as virtual portfolios and educational quizzes can encourage financial literacy and make investing less intimidating for beginners. However, the gamification of investing poses potential risks. It could trivialise the inherent risks associated with the market and lead to impulsive investment decisions.
Challenges and opportunities in the democratisation of investing
While the democratisation of investing through Fintech presents a wealth of opportunities, it also introduces a set of challenges that must be addressed. One significant concern is the potential for increased market volatility. With a larger pool of retail investors participating in the market, driven by factors like social media trends and gamification, market fluctuations could become more pronounced. To mitigate this risk, financial education and investor awareness campaigns are essential.
Another challenge is the protection of investors. As the Fintech landscape expands rapidly, regulatory oversight must keep pace to prevent fraudulent activities, data breaches, and other risks. Ensuring transparency in fee structures, safeguarding investor data, and establishing clear regulatory guidelines are crucial for building trust in the industry.
Despite these challenges, the potential benefits of democratising investing are substantial. By broadening access to investment opportunities, Fintech can contribute to wealth creation, economic growth, and financial inclusion. It can also empower individuals to take control of their financial futures and achieve their long-term goals.
The role of financial advisors
While technology is reshaping the investment landscape, the role of human financial advisors is far from obsolete. In fact, their expertise is becoming even more valuable in navigating the complexities of the digital age. As investors gain access to a wider range of investment products and information, the need for personalised advice and guidance increases.
Financial advisors can help clients develop comprehensive financial plans, manage risk, and make informed decisions. They can also provide emotional support during market downturns and help clients stay focused on their long-term goals. The integration of technology into the advisory process can enhance efficiency and improve client service. For example, advisors can use digital tools to gather client data, analyse investment performance, and provide personalised recommendations.
The importance of financial education
To fully realise the benefits of democratised investing, financial education is paramount. Empowering individuals with the knowledge and skills to make informed investment decisions is essential for long-term financial success. Financial education programs should cover a wide range of topics, including investment basics, risk management, portfolio diversification, and retirement planning.
Schools, employers, and financial institutions have a role to play in promoting financial literacy. By incorporating financial education into school curricula, we can equip young people with the knowledge they need to make sound financial decisions throughout their lives. Employers can offer financial wellness programs to help employees achieve their financial goals. Financial institutions can provide free educational resources and tools to their customers.
The future of wealth management
The convergence of Fintech and traditional wealth management is giving rise to a new breed of hybrid models. These models combine the efficiency and scalability of technology with the personalised touch of human advisors. Robo-advisors, for instance, can handle routine tasks such as portfolio rebalancing and asset allocation, while human advisors can focus on providing high-touch services to clients with complex financial needs.
Moreover, the rise of open banking and data aggregation is transforming wealth management. By connecting to various financial accounts, advisors can gain a holistic view of clients’ financial lives, enabling them to offer more comprehensive and tailored advice. This data-driven approach can also help identify potential investment opportunities and risks.
Investment solutions will become increasingly hyper-personalised, entirely tailored to an individual’s needs and preferences. Artificial intelligence (AI) will play a critical role in analysing investor data and recommending suitable investment strategies. The market size of AI in fintech was estimated at $44.08 billion in 2024 and is forecast to exceed $50 billion in 2029. [11]
Impact investing is likely to become increasingly commonplace.Investors, particularly millennials and Gen Z, are increasingly interested in aligning their investments with their values. Fintech platforms will cater to this demand by offering a wider range of sustainable and impact-focused investment products.
As the Fintech landscape continues to evolve, regulators will need to strike a balance between fostering innovation and protecting investors. Regulatory frameworks will likely focus on ensuring transparency in fees, mitigating cybersecurity risks, and promoting responsible investment practices.
Fintech and the democratisation of investment solutions
Fintech is not just disrupting the financial services industry, it is democratising access to investment opportunities. By lowering barriers to entry, providing educational resources, and offering innovative digital tools, Fintech is empowering a new generation of investors to take control of their financial futures. This democratisation of investing has the potential to unlock significant economic growth by bringing a larger pool of capital into the market. However, it is crucial to ensure that this growth is accompanied by responsible investment practices and robust financial literacy initiatives.
As technology continues to advance, it is essential to prioritise financial education and investor protection. By equipping individuals with the knowledge and tools they need to make informed investment decisions, we can build a more financially literate and resilient society. By fostering a collaborative environment between Fintech innovators, regulators, and traditional financial institutions, the future of fund distribution can be one that promotes financial inclusion, empowers individuals, and fosters a more stable and sustainable financial system.
More on Financial Education
Financial Education: What do Employers Owe their Employees?
Top Insights to Build and Sustain a Global Brand with Sharon Lechter – Podcast
Sources
[3] https://www.bis.org/publ/bppdf/bispap117.pdf
[8] https://invezz.com/research/online-trading-statistics/
[9] https://invezz.com/research/online-trading-statistics/