Liquid vs. Illiquid Careers: A Personal Reflection

I recently came across an incredibly insightful concept called "career liquidity" that I wish I had discovered years ago when I was agonizing over my post-graduation plans. This framework provides a fresh perspective on career decisions that goes beyond the typical considerations of salary and work-life balance.

The concept was introduced to me through an excellent article by Vaishnav Sunil and further explored in this YouTube video, both of which I highly recommend checking out. The ideas resonated with me so deeply that I wanted to share my thoughts and how this framework might have influenced my own career choices.

My Journey Into a "Liquid" Career Path

Looking back, I chose what would be considered a "liquid" career path out of university. Like many recent graduates, I wasn't entirely sure what I wanted to do long-term, so I gravitated toward a more structured role in a traditional field. The path offered clear progression, established compensation benchmarks, and the comfort of knowing roughly where I'd be in five years if I stayed the course.

Had I understood the liquid vs. illiquid framework then, I might have made the same choice, but with more intentionality and awareness of what I was optimizing for. Instead of seeing my decision as simply "playing it safe," I could have recognized it as strategically building career capital in a highly legible form.

What Makes a Career "Liquid" or "Illiquid"?

Just as in financial markets, where some assets are easier to price and trade than others, our professional skills and experiences exist on a spectrum of liquidity.

A liquid career path is one where your market value is easily understood and transferred. Think of the management consultant at McKinsey, the software engineer at Google, or the investment banker at Goldman Sachs. When these professionals apply for new roles, potential employers have a clear idea of what they're getting – their skills and experience are highly "legible" to the market.

On the flip side, consider someone with a non-linear path: perhaps they spent time at an early-stage startup, followed by a creative role at a non-profit, and then worked on independent projects. Despite potentially having developed valuable and unique skills, this person's "market value" is much harder for employers to assess – making their career path more "illiquid."

Key Factors Driving Career Liquidity: What I've Observed

Through my own experiences and conversations with peers across various industries, I've come to recognize several critical factors that significantly influence career liquidity:

Industry growth and activity: I've watched friends in high-growth sectors like AI and renewable energy enjoy remarkable career mobility. The sheer volume of opportunities in these booming fields creates a more active "trading market" for talent. When I compare this to colleagues in more static industries, the difference in optionality is striking. One friend who specialized in machine learning found himself fielding multiple offers within weeks of looking, while another with similar experience in a declining sector struggled for months.

Skill specificity and testability: I've noticed that clearly defined, easily evaluated skills tend to be more liquid. My developer friends can demonstrate their coding abilities through a quick technical assessment, while it's nearly impossible for someone to immediately showcase their leadership capabilities or strategic thinking. Interestingly, this means highly specialized technical skills often enjoy greater liquidity than general management abilities, despite the latter being crucial in senior roles.

Institutional prestige: The "brand effect" of elite institutions creates an immediate shorthand for employers. When I added a well-known company to my resume, the difference in response rate was dramatic – not because my skills had suddenly improved, but because that name served as a powerful signal about my abilities. I've watched colleagues with two years at a prestigious firm receive more interest than others with five years at lesser-known companies, despite having nearly identical responsibilities.

Standardization of roles: Industries with well-established role definitions and career ladders create more transferable value. My friends in consulting, banking, and big tech can move between companies with minimal friction because everyone understands what a "Senior Consultant" or "L5 Engineer" means. Meanwhile, those with more unique job titles or bespoke roles often struggle to translate their experience into terms the market readily understands.

Geographic mobility: I've found that some career paths maintain their value across different locations, while others are highly dependent on regional networks. Technical skills tend to translate well across borders, while careers built on location-specific relationships or knowledge (like local real estate or political consulting) become significantly less liquid when you change locations.

Documentation and portfolio potential: Careers where you can show rather than just tell about your accomplishments enjoy greater liquidity. A designer friend with a stunning portfolio can immediately demonstrate their capabilities, while another friend in operations excellence struggles to tangibly showcase the processes they've optimized or the teams they've transformed.

Through these observations, I've come to appreciate how these factors combine to create dramatically different experiences in the job market. Understanding them has helped me make more strategic choices about which skills to develop and how to position my experience for maximum flexibility.

The Comfort of Liquid Career Paths

One aspect of liquid careers that I've personally appreciated is the psychological comfort they provide. There's something reassuring about:

• Knowing roughly what my next promotion might look like and when it might come
• Having clear salary benchmarks to validate that I'm being fairly compensated
• Being confident that if I needed to change jobs, other employers would understand my experience
• Having a network of peers following similar paths who can provide advice and referrals

This comfort isn't just about risk aversion – it's valuable mental space that can be directed elsewhere in life. While my friends in more entrepreneurial paths were constantly strategizing their next career move, I could focus more energy on personal interests and relationships.

Why I Sometimes Envy Illiquid Paths

Despite choosing a more traditional route, I often find myself admiring those who've taken the road less traveled. The appeal of illiquid careers includes:

Potential for outsized returns: Several former classmates who took seemingly risky paths into startups or emerging fields have achieved extraordinary success – both financially and in terms of impact. The ceiling seems higher, even if the floor is lower.

Freedom from constraints: I've occasionally felt limited by the expectations and structures of my industry. Those on more illiquid paths seem freer to design their working lives around their strengths and preferences rather than fitting into predefined roles.

Unique skill combinations: Some of the most interesting and impactful people I know have developed unusual combinations of skills that wouldn't have been possible in a more linear career. One friend combined psychology, data analysis, and design thinking in a way that makes her incredibly valuable in her niche – but her journey wouldn't fit neatly on a traditional resume.

Closer alignment with personal interests: Many on illiquid paths have been able to shape their careers around specific problems or domains they're passionate about, rather than adapting to the priorities of established organizations.

Finding My Balance

As I've progressed in my career, I've started to incorporate more "illiquid" elements while maintaining the foundation of my liquid path. I've taken on side projects, developed specialized knowledge in areas that particularly interest me, and cultivated a network that spans different industries.

This hybrid approach has allowed me to benefit from the stability and legibility of my primary career while creating space for more personalized growth and exploration. It's a balance that works for me at this stage, though I can imagine shifting further toward either end of the spectrum as my priorities evolve.

Questions I Wish I'd Asked Earlier

If I were advising my younger self or current graduates considering their options, here are the questions I'd suggest pondering through the lens of career liquidity:

1. How much certainty do you need? Be honest about your psychological need for stability versus your comfort with ambiguity.
2. What's your time horizon? Liquid paths often offer more predictable short-term gains, while illiquid paths might have higher long-term potential.
3. Where do your unique strengths lie? If your value comes from unusual combinations of skills or ways of thinking, illiquid paths may allow you to better leverage these advantages.
4. How well do you communicate your value? Illiquid paths require more active marketing of your skills and accomplishments, as their worth isn't immediately apparent to others.
5. What kind of network do you want to build? Different paths connect you with different types of people and professional communities.

The Freedom in Understanding Both Options

Perhaps the greatest benefit of understanding the liquid-illiquid framework is the freedom it provides to make intentional choices. Rather than simply following the expected path or rebelling against it, you can thoughtfully consider what you're optimizing for and what you're willing to sacrifice.

Companies will only ever pay you enough to keep you from leaving – which is often less than your true worth if you've developed rare and valuable skills. This reality makes it all the more important to choose your path with clear eyes.

I've come to believe there's no universally "right" approach. Some of the happiest and most successful people I know have followed extremely liquid paths, while others have charted courses so unique they defy categorization. What matters is making these choices consciously, with an understanding of the tradeoffs involved.

For me, starting with a liquid path provided a foundation of skills and confidence that I've gradually built upon. Others might thrive by diving straight into uncharted waters. The key is recognizing that career liquidity is just one dimension of a complex and personal decision – but understanding it can help you navigate your choices with greater clarity and intention.

I'd love to hear about your experiences with liquid or illiquid career paths in the comments below. Have you consciously chosen one direction over the other, or found ways to blend both approaches?