The Great Resignation: Can It Work for You?
Staying in a job you hate is hard. Leaving it can be even harder. “I quit!” may be the new mantra of the so-called “Great Resignation,” as more people are shifting their priorities around work and life in the face of an ever-changing global pandemic, but many continue to feel stuck in place, struggling with how to decide whether or when to walk away.
There is, of course, no magic eight ball that knows what’s best for you. But you can make a confident and informed decision for yourself by getting clear about your personal, professional and financial goals, while staying open to new ideas about what's possible for your future.
5 Things We Tell Ourselves That Keep Us Stuck In Place
Never quit a job before finding a new one. Many people worry that being unemployed is “career suicide” when it comes to a new job search. In fact, the most competitive candidates are not those who are actively employed, but rather, those who can clearly articulate what they want next, why they want it, and the unique talents they offer that make them a gift to their next employer. Often times, breaking away from a job that no longer fits can provide the best opportunity to hone in on what you want – and don’t want for your career. Employers care much less about why someone left a job than most people realize. It’s usually no more than a quick discussion point on an interview about what you are looking for next – and why this job may be a perfect fit! What they are focused on is what you can do for them, how you can help them be better, whether you’d be a great addition to their team. And they’ll notice your positive and confident mindset which will get them excited about you, something that may be hard to bring if your current job leaves you little opportunity to devote to your job search.
I’ll destroy my professional reputation by quitting. Not only can you leave your job with your reputation intact – you can strengthen it on your way out the door! How you leave matters. This is not the time to share negative feedback or pent-up frustration about your job which can put people on the defensive. Instead, avoid burning bridges or undermining relationships by framing your departure as a purely objective decision about your career, not anything personal about your employer. As difficult as it may be, go out of your way to thank people for their support and share your appreciation of things you’ve learned and opportunities you’ve enjoyed. Offer to help with the transition. Consider sending an email to your colleagues to recap your time with the organization and to set a positive tone for your departure. By remaining highly professional, you’ll be surprised how well others will respond to you and you’ll make it easy for them to stay in touch and provide ongoing support in the future.
My boss depends on me. I have too much on my plate. I need to find my replacement first. Granted, these are three things, not one, but they all fall under the same umbrella – guilt! A strong work ethic is a good thing, until it interferes with your own goals. When we care deeply about what we do, it’s natural to become so invested in the outcome that it is hard to let go. This leads to ongoing negotiations – with ourselves! I’ll leave after this big project. Or the next one. Trust that your employer is going to be fine. The job will get done. But it’s up to your employer, not you, to find the solution.
I won’t know what to do with myself if I’m not working. Finding yourself without the daily routine of a job, as well as the professional identity that is tied to your work can be challenging, particularly if you’ve been employed most of your adult life. For many, it may be the first time they’ve had the chance to step back and consider how they want to spend their time. Taking charge of your own priorities can be empowering. This is a chance to create a new routine that keeps you motivated and productive. Set goals for various aspects of your life and hold yourself accountable. Create a structured schedule for how you’ll use your time, and assess your progress on a daily basis to ensure you’re gaining traction. Identify any challenges that get in your way and address them quickly. Consider having an “accountability partner” to check in with you. If you’re planning to find a new job, use your time to polish your resume, brush up on your interviewing skills, and connect with people to help get your message out. You may want to take classes to enhance your skills or volunteer for a cause you care about. Not only will such activities provide meaningful structure to your day, they’ll also demonstrate to a future employer how dedicated and hard-working you are outside of your job. Take this opportunity to step into your new job: CEO of YOU!
Only wealthy people can afford to walk away from a paycheck. If this were true, we would not have seen a record 4.5 million Americans quit their jobs this past November. But money is, of course, the main reason we work, and even the worst job can pay very well. Walking away from the security of a paycheck, health insurance, and other financial benefits of your job takes more than just a leap of faith: it takes careful financial assessment and planning to determine your best options. You may need to cut back on expenses, find part-time work or hold out for a new job that pays even more. The good news is that you can take control of your financial life by putting in the time and attention to thoroughly review your financial situation in order to assess options to sustain you during a period of job transition. You’ll also have the peace of mind that comes from knowing you’ve planned well for what’s ahead.
I sat down with Giro (Jerry) Maddaluna, founder and lead financial advisor at Luna Financial Group for his unique perspective on the financial aspects of quitting a job.
Here's his practical roadmap to help prepare you for financial success before you go.
Take Inventory
Your financial success depends on knowing exactly what you have, where you have it, what you owe and what you spend. If you’re not sure, now is the time to find out!
What financial benefits are you getting through your job?
In addition to your paycheck, consider health, life and disability insurance, retirement savings accounts, childcare subsidies, etc. Determine how critical these benefits are for you. Can they be obtained elsewhere, such as through a spousal plan, the health insurance marketplace, Medicare, or an alternative financial institution or private insurance carrier? For those critical benefits, can you manage the costs short-term through savings or remaining household income during a period of job transition?
What savings and investments do you have to help you through a transition?
It is important to have clear visibility into the money you’ll have access to during a transition. How much is in your accounts, including any checking, savings, retirement and investment accounts? Do you have any old retirement accounts or pensions with former employers you may have forgotten about? What type of accounts do you have? Are there fees or penalties for early withdrawal? What are the tax implications of withdrawing money? Do you have any outstanding loans on your retirement account? Are you eligible to take out a new loan or carry over any loans if you leave? What other credit, if any, do you have access to?
Do you own any insurance outside of what is provided by your employer?
Do you have any life, disability, long term care, Medicare or other insurance plans? Are there any risks such as disability or sickness that could potentially deplete your assets or place a strain on your family should they occur? Can these risks be offset by avoidance, savings or insurance?
What are your daily living expenses and liabilities?
Do you have any outstanding student loans, car loans, mortgages, etc. that you need to pay regularly? What basic living expenses are absolutely necessary? What expenses are discretionary that you can eliminate or cut back on? Can you manage these expenses with savings or support from others, and if so, for how long?
Analyze and Evaluate
Taking inventory will help you know exactly what you have and what you’ll need. But a deeper analysis and evaluation of your finances, such as considering various “what if” scenarios will give you greater insight into how leaving your job might impact your overall financial wellbeing. There is no “one size fits all” scenario. A recent graduate just beginning a career will have very different financial needs than a seasoned professional who may be supporting a family. Armed with your financial data, you can confidently explore creative solutions that will allow you to prioritize your goals. For example, you may decide to work part-time, wait for your next bonus check to arrive before quitting, or push back a home project for a year or two if it means landing the dream job you’ve had your eye on. Whatever you decide, you’ll be equipped to do so with a clear understanding of what is in your best financial interest.
Develop a Plan - and Execute!
If you decide to resign, you’ll need to set things in motion with an actionable plan. Meet with HR to sort out next steps, such as whether you can enroll in COBRA to continue health benefits, logistics for rolling over retirement accounts and deadlines for paying back any outstanding loans. Determine if you’ll be signing up for Medicare or your state’s health insurance exchange, and if you’re entitled to any subsidies. Plan for your “emergency fund” or access to credit to cover any unforeseen expenses. Be mindful of your savings level too, as you’ll want to maintain sufficient funds for those basic living and critical discretionary expenses you’ve identified. While the rule of thumb for savings is that you should have enough to cover at least 3-6 months of expenses, it’s important to assess your own comfort level and risk tolerance to determine how much of a cushion feels right for you. It may also be a good idea to bring others into the planning process who may be impacted by your decisions, such as spouses or significant others, as well as enlisting the support of professionals if you need help navigating the landscape of retirement and investment accounts, insurance plans, and taxes.
Making a decision about whether to stay or go is about taking control of your career. It's about choosing what you want, rather than settling for what you get. Do so with intention, confidence and clarity around what's possible for living your best professional life.