With A Little Help from My Friends

Although the COVID-19 crisis is over, people are continuing to work from home. As time progresses, permanent differences in opinion have emerged between those who want to work in the office and those, like me, who love working from home. In my opinion, work from home people should be careful as they argue to stay home so as not to lose networking opportunities and stunt their careers. I speculate, freedom and flexibility can be great, but the isolation can impact their career in the long term. Everyone needs to understand the mechanics of networks to be more successful at building relationships to further their career growth.

In this article, I want to address:

1. The reality of job hunting in the internet age and why it is important to network,
2. the structure of social networks and their impacts on our careers and relationships, and
3. the least time-consuming, impactful way to network as an actuary.

Job Hunting in the Internet Age

Job hunting in the internet age is difficult. You would think that all the technology would make finding a job much easier, but study shows that this is far from the truth—application tracking systems (ATS) filter resumes, making life more difficult for the applicant. According to Zippia.com:

• “Seventy-five percent of online applications get rejected by ATS simply by how they are formatted.
• “Fifty percent of online job applications do not meet the criteria stated in job advertisements, so ATS removes the applicant.
• “Be aware of the common errors ATS picks up in resumes and eliminate them from your documents so ATS accepts your application.”[1]

The crux of the trouble is that the internet makes it easy for companies to get a flurry of resumes. Let's put a little combinatorics thought experiment to this problem.

1. How many people know about a posted opening? Most companies place job postings on their website along with Indeed, LinkedIn, Monster, and so on, so pretty much everyone who might be interested knows about the position.
2. How many applications are received for any opening? In good economic times, generally in the hundreds. In bad economic times, typically thousands.
3. How many resumes make it to a hiring manager for possible interviews? At most companies, not more than 10. The hiring manager may not call all 10 in for an interview unless they don't find what they are looking for in the first five or so they call.

Applying to a position with no inside connection is little more than a lottery on a good day and a mission impossible on a bad day. Even with the economy in 2023 having historically low unemployment, it still takes an average of five months to find a job.[1] Even if the job search is internal, it still takes time and would likely benefit from networking.

The graph above shows the unemployment rate from 1950 to today. The unemployment rate violently oscillates through economic cycles, which happen at least every 10 years. During downturns, unemployment benefit requirements may make job hunting challenging. In Missouri, to receive benefits, people need to send out at least three resumes a week, which might lead some individuals to apply for a job regardless of whether the job fits their skills. In times of high unemployment, people may send a flurry of resumes, bogging down the systems and causing a traffic jam of applicants.

In my view, the unemployment benefit system seems to assume that applicants will jump to the first position. We have all studied enough economics to know that wages and careers are very sticky. In my experience, many people are unwilling to settle for a lower-paying job unless desperation dictates. Due to the negatives outweighing the positives, companies will likely not hire overqualified people because companies realize that they will leave once they find a new, higher-paying position. The situation is unsuitable for the applicant and the new employer because it creates noise and overhead with little benefit. Unemployment benefits programs have designed checks around the distribution of unemployment benefits to prevent perceived abuse by those playing the system, complicating the entire job marketplace for the people it was intended to help.

Do not be fooled by the comfort of the actuarial profession; 40% of the people will experience firing or layoff during their working lives.[2] All companies, at some point, change direction or downsize. You can run and hide, but it may catch up to you eventually. Terminations generally are not evenly distributed among the working population. Younger adults in the 18–34 range and men are 25% more likely to be let go.[2]

According to Zippia.com, there is good news though:

• “Networking fills 85% of all jobs;
• “seventy percent of all jobs are never published publicly, which makes networking an ideal way to land a job; and
• “networking job searchers have higher success rates, with a job match occurring in one to three months. Additionally, these job offers are often higher in quality. Network connections are more likely to be well-connected and established, making them more likely to provide a job referral with a higher salary and title.”[1]

The Power of Networking

Within a network, there are degrees of connections between people ranging from strong to weak. Strong connections involve deep personal relationships, and in such relationships, the individuals are likely to communicate frequently. The relationships could include family, friends, and coworkers. Weak connections generally are formed among acquaintances who rarely, if ever, speak or who have just met. The stronger the connections within the network, the more homophily among the connections in the network.[4]

Homophily means the love of sameness. Homophily is the tendency to seek out other individuals that think and act like us. It exists because we are social creatures programmed at a neurological level to seek out like-minded people. After all, our brains reward us with dopamine for correctly predicting and mirroring how others are behaving. This reward gives us a feeling of belonging and a sense of safety, which naturally causes us to assemble in like-minded herds.[3] The like-minded groups seed the strong ties within our networks.

Relationships grounded in strong and weak connections both have advantages and disadvantages, which are essential to understand for successful networking.

• Advantages of Strong Connections
1. The power of strong connections is their ability to increase communication speed and collaboration. If we use computers as an analogy, then homophily is all about efficiency. Homophily speeds up computation, reduces coordination, and lowers required energy. People can say more and give more complex instructions with fewer words because culture generally embeds shared knowledge among the like-minded. Culture is the bedrock of human society because the tribe's cultural knowledge reduces the uncertainties in success.
2. Tribal mechanics is one reason why companies ask for referrals from employees. Companies sometimes may prefer to hire employees who have similar characteristics and behaviors to their current employees.[7] Our desire to interact with like-minded people with similar skills reduces the required training and increases the likelihood of collaboration.[7]
• Disadvantage of Strong Connections
  1. Strong connections can sometimes hinder diversity of thought.[6] The context of the problem dictates whether diversity of thought and collaboration strengthen or counteract each other. Think of a rowing competition with 10 people in each boat. Everyone needs to synchronize for speed and cooperation, encouraging strong participant bonds. But now imagine half the oars break simultaneously on the same side of the boat. There needs to be diversity in thought to overcome the unfortunate turn of events because groupthink is no longer an asset.
  2. Homophily embedded in strong connections may support immobility and inequality. Homophily limits the information and opportunities that are available. Humans are herd animals. We rarely do anything alone, even if we feel that way. Even if the options are known, the people in our network dictate socially acceptable behaviors.[4]
  3. Within our career networks, wages and opportunities depend heavily on how many of our peers are employed and their occupation level since networks of contacts are the primary source of getting a job.[4] We like to think that our position in life is due to random good luck and hard work, but most of our success and opportunities are due to our place within our social network. Life is highly path-dependent, so the starting position within our social network is critical to our life's outcome.
• Advantage of Weak Connections
1. One advantage of weak connections is that they help disseminate information across different networks. Our weak connections are more likely to help us find employment because our search can go further. Strong connections have more redundancies in their network, so information does not travel as fast. Furthermore, suppose you are a weak connection that fills a structural hole that bridges a gap between two networks and can link groups through non-redundant connections. In this case, research shows that this leads to benefits through promotion, bonuses, and other compensation.[5]
   
   For example, remember the 2008 financial crisis when mass layoffs occurred across many industries. Can you imagine working for Bear Sterns or Lehman Brothers? They were large 80+ years old banks that vanished overnight! All your deep connections made at work were likely unemployed, too. In-office employment is excellent for building relationships but has concentration uncertainty. By branching out and developing weak ties and bridging networks, you diversify your social network to ensure faster recovery from bad outcomes.
2. Weak connections are significant for diversity of thought because they bring fresh ideas from other domains. Strong connections can fall prey to group thinking, which weak links can help reduce. However, the social norms of strong connections can ostracize new ideas from the group, defeating the purpose of bringing in outsiders. There needs to be strong leadership that can tolerate nonorthodox approaches to problems diversity in thinking can bring.
• Disadvantage of Weak Connections
1. Weak connections do not have the social reinforcement required to cause lasting social change. The Arab Spring or Me-Too Movement needed robust social connections to take hold. These movements would have withered and died if only propelled through weak connections. In 2019, Google killed Google+ because it couldn't get the social backing needed to survive. Its marketing campaign was massive but focused on spreading through weak connections.[6]

Networking as an Actuary

Now that I have established the employment landscape and theory behind networks and employment, how do you grow your network as an actuary? Of course, I will suggest volunteering. But let's be honest: We all have families and full-time jobs and spend years of our free time taking exams. You do not want to give up any of your leisure time, especially for free. I would argue that post-COVID-19 is a different world with many of us working remotely.

A consequence of remote work is that you will have no choice but to actively network to stay in touch with your peers, especially the younger actuaries. You cannot wait for the economy to take a stark downturn and then suddenly get involved. It would be best to prepare for times of famine in times of plenty. So, how can you volunteer but not get overwhelmed with responsibility? Become a friend of one or more of your favorite professional sections.

Becoming a Friend

I joke that becoming a section friend is all fun with no responsibility! Friends get to join in on the monthly section calls, which is when the section council discusses their initiatives. (The section council is the group elected to run the section.) You can meet people on the call to create any degree of connection you want. There is no expectation that you will volunteer to do anything. But if you volunteer, everyone in the section will be ecstatic about what you did, which will strengthen your connections and diversify your network. There is nothing better than doing a small project with someone so they can get a taste of how you operate.

By being a friend, you can see the different sections' initiatives. You can decide whether you want to participate at all. This approach is a no-cost way of determining if volunteering is right for you. I do the following:

• Write articles for The Actuary magazine,
• create the Predictive Analytics Hack-A-Thon for the Emerging Topics Community, and
• presented at the 2023 Life meeting for the Joint Risk Management Section.

By being a friend of multiple sections, I can build a more extensive network and get involved in the activities that interest me and that I will enjoy. If my schedule gets busy, I can easily wind down my commitments and vice versa. I have complete control and no feeling of obligation!

Every section has a chairperson you can contact to learn how to become a friend. Getting involved and networking is one of the best ways to further your career; it is one of the best unemployment insurance on the market. If the bug bites you, you can always take on more extensive and prominent roles.

The Bottom Line

The world is changing. As we get more technology to communicate, we become more isolated. There is a 40% chance, due to no fault of your own, that sometime in your life you will become unemployed. Stuff happens! Even if you manage to avoid unemployment, there is a good chance that you will want to try new things as your career evolves and your taste changes. Your ability to network determines your freedom to do what you want. Becoming a friend of a section allows you to grow your network at no cost and not worry about overcommitting yourself. It is how you can expand your network and career on your terms.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the newsletter editors, or the respective authors' employers.