Making a career change involves some level of risk. Whether you are making a small shift or a big change in your career it’s important to do a risk assessment so you can go into it with your eyes wide open – and with a plan.
What does that actually mean? Here is how to complete a career change risk assessment in 5 easy steps.
What is a risk assessment?
A risk assessment is a systematic process of identifying and evaluating the potential risks involved in an activity. This process is used in all sorts of applications and industries. In fact, in my first career as a food manufacturing engineer, we used risk assessments almost daily to ensure the employees stayed safe, the product quality was excellent, and our customers received the products they needed on time.
There are a lot of prescriptive approaches to risk assessments, however they all have common steps.
- Identifying potential risks
- Analyzing the likelihood of each risk occurring
- Evaluating the potential consequences if the risk were to occur
- Implementing controls to manage (or eliminate) the risks
Using these steps as a guide, plus a step that I’ve added for career changes, let’s walk through how to use a risk assessment to plan for your career change.
How to use a risk assessment for a career change
1 | Identify the potential risks.

Risk is defined as anything that has the potential for harm. At this stage, you aren’t thinking about the likelihood of each potential risk occurring, that will come later.
To start, write down a short 1-2 sentence description of the career change you are considering. This is ground yourself in the scope of the change you are considering when identifying potential risks.
Now, reflect on the following:
- In what ways could this career change create potential risk or harm for you?
- What is the worst possible outcome of this career change?
Pro Tip: Be specific and brutally honest with yourself. Instead of “I could fail”, write specifically how you define failure as it relates to this career change.
Examples of potential risks are: not being able to make enough money to cover your expenses, not being able to work in your desired location, past work experience not being transferable/ valued in new career, having to change doctors/ insurance, etc.
2 | Analyze the likelihood of each risk occurring.
Just because a potential risk may exist, doesn’t mean it is likely to occur. Assigning a likelihood to each risk allows you to take a more realistic and objective look at the potential risks. Maybe the risk that is most on your mind is extremely unlikely to occur. That may put your mind at ease. Conversely, maybe a risk you hadn’t even considered ends up being extremely likely to occur. That allows you to consider what you would do if that were to happen.
For each of the potential risks you identified in step 1, assign a rating between 1 (extremely unlikely) to 10 (extremely likely). If you aren’t sure about how to rate any of the potential risks, think about how you could learn more about that. Where might you go for more information about that potential risk?
3 | Evaluate the potential impact.
Basically, when evaluating the potential impact or consequences of a risk, you are asking yourself what would the specific impact to me (or things that are important to me) be if a risk were to occur? For instance, if you identified the potential risk of “not making enough money to cover your expenses” a potential consequence might be having to move, get a roommate, tap into your retirement savings, get a second job, and more.
Ask yourself:
- In what specific ways would you be impacted if each potential risk occurred?
- What actions would you need to take to get back on track?
Pro Tip: Impacts related to career changes are included in the 43 life events that make up the Holmes-Rahe Life Stress Inventory. Use this self-assessment to gauge the overall impact of a career change in the context of other events happening in your life.
4 | Determine your risk tolerance and manage the risks.

Everyone has a different tolerance level for risk and that can be based on a number of factors. Some people are willing to take significant financial risks, while others prefer to take a more measured and cautious approach. There is no one right way to think about risk when it comes to your career.
Looking at each risk and the associated likelihood and impact:
- Which of these are you able to manage and which are you not?
- What could you do to minimize the likelihood of these risks occuring?
- How might you minimize the potential impacts or consequences of these risks?
Outline specific steps you will take to manage these risks to better align with your risk tolerance.
Pro Tip: Be creative with identifying action steps. Think about who you know that may have advice, what resources you have access to, etc. Consider making an adjustment to the timing or scope of your career change to better align with your risk tolerance as well!
Example: When I had to unexpectedly take an unpaid internship during my Master’s program, I hadn’t included this in my financial plan. But I anticipated it months in advance, researched options to rent my guest room and secured a roommate to help pay monthly expenses. This wasn’t ideal, but because I had a financial plan and saw that I would be off track if this were to occur, I was able to get ahead of it and avoid the impact of this loss in projected income.
5 | Look at the other side of the coin.
One of my biggest cautions to clients considering a career change is to look at the risk of making the change just as closely as they look at the risk of not making the change. It’s natural to default to accepting what you know over what you don’t know, but there are risks and potential consequences to you of not making a change too.
Maybe the stress of your current career or role is negatively impacting your health or your work schedule is keeping you from spending time with those you care about. These both have very real and long-term effects that should be considered.
Career Change Risk Assessment
Any change includes some level of risk and uncertainty. Facing career change risks head on allows you to proactively plan and design the change to better align with your risk tolerance.
Need support in evaluating the potential risks of your own career change, big or small? Unearth Coaching & Consulting offers career transition coaching packages and single coaching sessions to support you in moving towards your next chapter. Contact me today to learn more and get started!