Millions of American workers have said “I quit” this year, with 4 million quitting in April 2021 (the highest rate in decades), 3.6 million quitting in May, and another million quitting in June. Unsurprisingly, this employee exodus—dubbed the “Great Resignation”—has reflected in labor shortages across industries, as well as mounting pressure on employers to embrace flexibility, raise pay, and create better working conditions.
We don’t like to use the term “unprecedented.” However, the labor market seems to be doing something it has never done before, and “unprecedented” seems fitting.
Setting the Stage
When the pandemic first broke out in early 2020, it disrupted all aspects of our lives. There was a “new normal” for just about everything: how we worked, how we shopped, how we relaxed, and how we socialized. Turns out, not everyone is willing to return to the status quo.
COVID-19 claimed the lives of over 680,000 people in the U.S. alone. However, it has directly and indirectly impacted a lot more people than that.
Therein lies one of the many reasons why people considered changing jobs altogether. Because they had been exposed to the virus at work, they did not feel safe coming into the office as required. COVID also compounded problems they were already struggling with, such as being underpaid and facing salary cuts.
Even those who were fortunate enough not to be caught up in COVID’s clutches felt its effects. They realized life was short and would rather spend their working hours doing something they enjoyed doing.
What You Should Know
Are you one of the many people considering changing careers? Here are a few tips to think about before making the switch:
- Think about the reason(s) you are contemplating quitting your current job. Is there anything your employer can do to help? A four-day work week? When was the last salary review? You are in the driver’s seat—it can’t hurt to ask.
- Before you bid adieu to your job, think about what signals you are sending to future employers. The average job tenure in 2020 was 4.1 years. If you spend every day at work feeling unappreciated or unfulfilled, four years can seem like an eternity. However, if you have more than one non-contract, full-time position where you did not complete a full year, that sends a red flag to other prospective employers—regardless of the reason for your departure.
- Be gracious if you do decide to leave. How can you make your departure less dramatic? Rage quitting is a real current trend. It is worth noting that many employers see Boomerang employees—people who return since the grass is not always greener on the other side. Don’t burn any bridges. Do have a back-up plan.
- Check your emergency account. Make sure you have at least six to nine months’ worth of living expenses readily available in a liquid account. The average duration it will take to get back on your feet is about 20 weeks (not seasonally adjusted) and 30 weeks (seasonally adjusted), according to the latest US Bureau of Labor Statistics.
- Secure a continuous health plan. You don’t want to risk being uninsured for too long, even if you think you are perfectly healthy. First, buy a health plan through the Marketplace. Losing a job based insurance coverage because you quit or got terminated, qualifies you for a special enrollment any time throughout the year. Second, you can keep your existing coverage through COBRA continuation coverage.
- Take the time to understand the finer details of the retirement plan rollover options available to you before deciding which route to take.
The Great Resignation is taking place globally. Consult your financial planner to go over the financial To-Dos before you the make the leap (or shortly thereafter).