I have to admit I thought that I wrote about “The Great Reset Switch” in my blog already. Apparently I was mistaken and I have only written about it in the first draft of my book. I’m not sure if this is a good thing or a bad thing, but because of the extensive nature of my output over the years, it all gets mixed up. I’m now at the point where I always have to search my archives to see what concept was discussed, when I wrote about it and where I posted it. All this being said, I bring up “The Great Reset Switch” quite often. It is a seminal part of my theories and it touches on much of what I write about. Consequently, it’s a topic that is long overdue for its own article. Also, since i’m going to write at length about it, I’ll just refer to it as TGRS for now. The neat thing about the concept is that it scales well. I can simplify it down to a single sentence or I can write a huge book about it. I’ll start with the single sentence observation. The elevator pitch for TGRS is: The Great Reset Switch describes when a work event, or a life event, happens that is unexpected or beyond your control and it sets you back to the beginning of your efforts in that aspect of your life. That’s a little bit generic, so let me expand on it a bit.
The Great Reset Switch started as a concept when considering career progression in the professional world. It tried to explain why most people can’t recover from an unexpected separation at the same or better level they were. The core theory is that often they must start again from the ground up. I say most people because some do land on their feet or better, so it’s not all people. One category that’s usually not affected is gatekeeper credential jobs. There are certain categories of jobs, those attached to licensure which really aren’t affected by TGRS. Government mandated licensure which is required for doing a job can be a big positive for the individual and at the same time it can be a huge drag on the economy and drive the prices of goods and services up. Many people look at licensure, or at least licensure requirements, as a big negative that has gone out of control in parts of the country where states require a license for what seems like everything. The extra hurdle of having to acquire a license limits, sometimes severely, the supply of practitioners who are doing the job which requires a license. A good example of this overly restrictive licensure environment includes license requirements for jobs that you would never think need a license. Examples include residential painting contractor, funeral attendant, shampooer, florist and even hair weaver. Forcing people to get a license to do something like weave hair means that you go in to get a weave and you’re paying hundreds of dollars for a simple task that takes somebody a few hours to do. If there was no license then it would most likely be a $10/hour job that people can learn through trial and error or through some sort of quickie corporate training. In the environment that requires a license, if the licensed weaving practitioner does a crappy job at one salon, they can just go to another one, show their license, and get to work for the same enhanced rate of pay the very next day. This is due, in part, because the license requirement restricts supply. I’m not a female, or even a type of guy who is a customer for hair weaves, but I don’t think if a practitioner does a bad job, it’s going to be a truly major issue for me. If I was a consumer of weaves, I would just pull the bad weave out, take the loss financially, and get another one with somebody else. I used hair weaving as an extreme illustration for unnecessary licensure, but the challenges with licensure is the same for every other type of license that makes sense. Those examples include doctors, certified teachers, licensed nurses, and CDL drivers. These positions have a huge effect on the lives of others. As an example, at the turn of the last century the doctor’s got together to enforce strict licensing standards. They wanted to keep the quacks out of the profession. They also, even back then, knew it would help them drive up pricing. The license also defines income and specific job responsibilities. A doctor makes between 200K and and maybe $250K and can only do specific things. A teacher will make between 40K and 50K. The cone of variance where licenses are concerned is very tight compared to unlicensed jobs.
Even with all the hand wringing about the explosive growth requiring licensure for people to get hired, these types of jobs still only make up about 30% of those available in the greater economy. That means a full 70%, or the great majority of jobs, do not require licensure of any sort and there is much more variance in the different jobs types in both income and in responsibility. Income growth and gravitas at most organizations is pretty organic and is, in part, a function of time. A customer service rep at a small firm may start at 15 to 20k a year, a senior rep at that same firm may make 50 to 60k a year. One may just be entering orders, one may be managing million dollar deals. But if the senior rep is let go, then all of a sudden they’re applying for jobs based upon what was on their resume, which is just the title customer service rep. They get stuck taking a salary that’s half of what they were able to get with the old company even with their experience. I would love to say that that is an extreme example, but I’ve seen it too many times in my career. The Great Reset Switch for unlicensed jobs crosses all sectors of our economy.
Why does it happen so often and in every area of our economy? In America there is the belief in the superiority of a highly flexible workforce. We can’t forget that because of the adoption of Milton Friedman’s ideas, in our modern economy the welfare of employees is secondary to the welfare of shareholders. Employees are hired and fired based upon the changing business climate or simply for maximizing shareholder value. Rapd change is considered a sign of a nimble company which is desirable to investors. Going back to how TGRS feeds into my other theories, the effect of the Friedman Doctrine feeds into my idea that employee equity is critical for closing the wealth gap and for reducing chaos, including The Great Reset Switch, in worker lives. I believe mandated Employee Stock Ownership Programs for publicly traded companies are the modern solution to the problem that unions addressed in decades past. If an ESOP group had a large enough stake in the company to have a substantial number of seats on the board of directors, say a third or more, then long term employee welfare becomes top of mind for the corporate leadership. It would be considered equal to the needs of external shareholders and customers. Workers would only be let go when it’s absolutely critical to the survival of the company and those that were let go would have truly comprehensive separation packages that align to their contribution over time to the company.
Unfortunately our reality is job transitions, and lots of them are unexpected because of the aforementioned corporate machinations. As most professionals are let go they are given very limited severance no matter how long they were with their former employer. They have to get a job more quickly than not to survive. We live in a world where many of the things we have requires a debt service including our financial buffers (credit cards) , education (student loans) and transportation (car payments). Rent and Mortgages are so big compared to monthly incomes they are almost in a category of their own. In addition to all this most other life services come with some form of a service contract to the point where there is even a monthly coffee payment by one notable restaurant. It all requires regular monthly payments. Even the few who keep a large emergency fund usually want to stem the financial bleeding so they go back on the job market quickly. If they don’t have a job that requires a license, then they have to try and get recruited into a new position based upon their stated experience. They will want top dollar or something comparable to what they were getting in their former position but are forced to deal in a job market where almost all employers want to hire them at the lowest possible salary. Even with a stellar background, most hiring managers ask “How much do we have to pay to get them?” vs. “How much more money can we get them?” Due to our ever more complex world, if you don’t have the extremely specific experience required by the corporate hiring manager, then job seekers have to start at a lesser salary until they ‘learn the job’.
One way to mitigate The Great Reset Switch is to get out in front of it. If you are continually jumping jobs for ever better opportunities, you typically leave a company before it leaves you as part of your financially offensive strategy. Most people don’t do this. Life is just complicated and it’s easier to stay where you are at and deal with the challenges of some things you know verses taking jumps to things you don’t know.
It’s not just getting let go unexpectedly from your job, although that is definitely the marquee TGRS situation. It can happen even when you remain employed with your company. It can also happen in social environments. The classic example for staying employed and dealing with the Great Reset Switch scenario is when the company moves you around to a new position. Maybe you go from sales in one territory vs. another. Maybe you are moved from one department or job title to another. Typically what happens is the implementation of a corporate strategy designed to continually reevaluate comp plans and replace high incomes and/or bonuses with a promise of high opportunity. In effect the company is always trying to get its best people to continually grow the organization at a very high rate through constant restructuring of incentive plans.
Socially, the great research switch tends to happen when an interpersonal relationship breaks down. It could be any type of relationship where there is a major loss. I always think of my dad when I think of having to reset back to zero because of a social change. His story is pretty normal with the one big differentiator for me is that I had a front row seat. He was a simple guy who married a simple girl who he didn’t know had some serious mental issues. It was the kind of stuff that wasn’t well known back in the ’60s. As the years went by he grew as an individual but she wasn’t capable of it. Like most human beings, he longed for a partner on his level but was stuck with a little girl from the city who just wanted to remain dependent on others. Eventually he left, and he made the decision to give her everything. He had to start all over on his buddy’s couch. The story is longer and more involved than that, but all social stories that involve the great reset switch have their unique details. The bottom line is the unexpected life event happened and he had to rebuild all of the social and financial equity in his life. His story turned out OK in the end but unfortunately he had to deal with tremendous issues along the way because of the social version of TGRS.
The goal of this article was to expand the foundational concept of The Great Reset Switch. This idea that if you don’t have a structured way to transition to new jobs easily and with the same compensation, then you are going to have to start all over from scratch. Every time there is a merger with ‘synergies’ that have to be realized, every time there is a bad quarter, and every time there is a private equity buyout, hundreds or thousands of people experience the great reset switch. It would be great if there was a bigger buffer, or significantly more incentive to only get rid of people as a last resort. It would be great if there was a structure in place where one’s contribution and income could be carried over into a new job automatically. Those things simply don’t exist anywhere except in very limited pockets of our economy. If you’re not trying to stay out ahead of it, then the only thing you can really do is prepare for it. Unfortunately TGRS happens to nearly everyone sooner or later. The Great Reset Switch may not be a pleasant reality of our professional and personal existence, but there is a silver lining. Even if you have to start from zero all over again, the people who have been there before know they can do it again. It may take long hours of work over years but if they’re willing to do what it takes it’s possible and even probable. That’s more that can be said of other setbacks that happen when work and life collide.