How to Think About Risk In a Career Transition

When I announced that I was quitting my academic position and giving up tenure, many people (especially tenured or tenure-track faculty) had the same response: “Why are you taking such a huge risk?”. Giving up the job security of tenure was seen as so risky that many considered walking away from it to be reckless.

I literally¬†never thought of myself as incurring any additional risk by leaving academia. In fact, one of the most important justifications for walking from tenure was that I felt it was an unreasonable risk to remain¬†in my position. Now that it’s been almost two years since I quit, I’m more convinced of this than ever.

Here are some reasons why having tenure in academia is so incredibly risky, and why it’s much safer in the private sector.

You’re held captive in academia

There are a handful of faculty who are superstars, and have the rare privilege of being able to find new positions in other departments whenever they want. For the other 99.9% of us, when you have established yourself in a job, you are effectively stuck there. In the current job market, there are many, many young scholars coming out of graduate school who are truly excellent. It is cheaper to hire them at a junior level, and it’s possible that any one of them may turn out to be a superstar. It’s also less of a commitment for the hiring department because they’ll be hired without tenure. This entails that there are very few jobs for faculty at a senior level. And in my experience at least, when one of those jobs does become available, the hiring department typically has a specific person in mind already, and the hire is basically a fait accompli.

Thus, if you have a “good job” already, this means that your fate is tied to that of your home institution. If the university falls on hard times, if you’re on the losing end of a political battle, if the new dean or department chair doesn’t like you, or if the university’s priorities change unfavorably, there is typically nothing you can do about it. I was in this position, and this is extremely common. Putting yourself in a situation where so much is outside your control and you have no recourse is terribly risky.

If you have tenure, you have an enviable level of job security. But you have no recourse if the job itself deteriorates. Think about it this way: Imagine someone offered you a guaranteed income for the rest of your life, but it would be paid in a volatile currency. You do not have financial security merely because you have a guaranteed income. But many academics, in my opinion, make exactly this mistake when they think of their jobs as offering safety.

Convert one big risk into many small risks

An entrepreneur I know once made the following argument that it’s safer to be in business for yourself than it is to work for someone else, even in a well-established company. If you have a hundred customers, then you can survive if a few of them fire you — the worst that will happen is that your income will drop a little bit. But if you have one boss, you’ll lose your income entirely if that single person fires you. In the former case, you’re taking many small risks; in the latter, you’re taking one big risk. It’s safer in general to take many small risks.

In academia, we take a few big risks. Graduate school is one big risk; going on the academic job market is another; so is going up for tenure. If you manage to navigate this small list of big risks, then you’ll have some measure of job security. But if you fail at any of them, it is very difficult to recover.

To be sure, the private sector can be a rough place. But it’s much more likely to contain many small risks rather than a few big ones. I could certainly be fired from my job, which is a risk; and my job could deteriorate in some way. But I get contacted by recruiters on a regular basis. If I were to lose my job, I could probably get at least two or three interviews for good jobs each week. Of course, not everyone is in this fortunate position. But if you’ve made a few simple strategic decisions, it’s almost certain that you’ll be able to recover much more quickly from a professional setback than you could as an academic.

Think about opportunity cost

The opportunity cost of going to graduate school and pursuing a career in academia is gigantic. But as soon as we start down that path, the opportunity costs start to fade into the background. After a few years, they’re not salient anymore, and we tend not to figure them into our risk calculations. This is a mistake.

Graduate school, job-hunting, getting a tenure-track job, and finally getting tenure make up a very long road. It takes significantly longer than a decade. Even if you get a PhD and immediately land a tenure-track position, you’ve usually got about six or seven years before going up for tenure. When you think about what can be accomplished professionally outside of academia in that length of time, it really puts things in perspective. A well-educated professional can rack up a lot of valuable experience and make a lot of money in that length of time.

And so, when you’re thinking about risk, you should think about the opportunities that are being sacrificed. For example, the risk of failing to get tenure isn’t only that you will lose your job. The risk is that you’ve lost a job when you could have had a successful professional career doing something else, making money the entire time, and gaining professional experience. For some, the risks are worth it. But in my experience, very few academics really take the time to consider those risks in a rational manner.

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