Well, first, I think that there are ethical issues in trying to hedge your risk from employment. Your risk exposure is beneficial to the company, and the employment is made with an expectation of it. If I hired a lawyer on contingency, and found out that they managed to hedge out all of the risk of losing the case, I would find this behavior quite unethical, to say the least. An employee should not be indifferent to the bankruptcy of their employer.
The being said, there are informal ways of hedging this risk. The biggest is having a social network of people who support each other through times of unemployment. While families are often in the same line of work, from a risk management point of view it’s best to diversify. Besides the other issues, having a spouse that works at the same company as you is quite dangerous if the company runs into financial difficulties. (However, I don’t expect to see many personal ads along the lines of “SWM working in bio engineering field seeks SWF in anti-correlated field”.) And obviously, buying stock in the company increases your risk and should only been done if your company compensates you for doing so (such as offering free/discounted stock options). If you are offered stock option, the rational, although perhaps not most loyal, course of action is to sell them as soon as you can.
Well, first, I think that there are ethical issues in trying to hedge your risk from employment. Your risk exposure is beneficial to the company, and the employment is made with an expectation of it. If I hired a lawyer on contingency, and found out that they managed to hedge out all of the risk of losing the case, I would find this behavior quite unethical, to say the least. An employee should not be indifferent to the bankruptcy of their employer.
The being said, there are informal ways of hedging this risk. The biggest is having a social network of people who support each other through times of unemployment. While families are often in the same line of work, from a risk management point of view it’s best to diversify. Besides the other issues, having a spouse that works at the same company as you is quite dangerous if the company runs into financial difficulties. (However, I don’t expect to see many personal ads along the lines of “SWM working in bio engineering field seeks SWF in anti-correlated field”.) And obviously, buying stock in the company increases your risk and should only been done if your company compensates you for doing so (such as offering free/discounted stock options). If you are offered stock option, the rational, although perhaps not most loyal, course of action is to sell them as soon as you can.