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Daily Capital

How Finances Factor into the Pandemic ‘Great Resignation’

Key Findings
  • 66% of Americans surveyed are interested in switching jobs, particularly young generations (91% of Gen Zers and 78% of Millennials).
  • Americans surveyed err on the side of caution when it comes to quitting their jobs. More than half (52%) say that they’d need at least $50,000 in their bank account in order to comfortably do so. Nearly six in 10 (59%) could only go without a regular paycheck for three months or less.
  • Ability to work remotely without any restrictions is valued so much that six in 10 (62%) survey respondents would take a pay cut, especially parents (72%), in order to have it.

 

How willing are you to interrupt your income for a big life change?

It turns out that a majority of Americans surveyed (66%) are interested in calling it quits in the pandemic-era phenomenon known as the “YOLO economy” and “great resignation,” according to a new Personal Capital survey*. This is particularly true among younger generations (91% of Gen Zers and 78% of Millennials).

About 4 million people quit their jobs in April, according to the latest Labor Department’s Job Openings and Labor Turnover Summary. However, that same month, just over 6 million people were hired.

Against the backdrop of the global pandemic, people are changing their mindsets around employment priorities and, consequently, their current jobs. More than half of Americans surveyed (57%) insist that “now would be a great time to make a career move.” The under-40s are especially compelled to make a change; two-thirds of Millennials (66%) agree with such a statement.

‘Great Resignation’ Gains Steam

Why are Americans so keen to say “I quit”? There is a strong consensus that “employers are not great at hearing employees’ post-COVID needs and expectations,” with seven in 10 Americans (69%) express such sentiment, including 75% of Millennials.

Some Americans (13%) actually switched to a new job in the last six months, particularly 22% of Millennials and 17% of Gen Xers.

Here are the top reasons why people traded employers:

  • Higher salary: 52%
  • Better work/life balance: 46%
  • Liking the values of the new company better: 35%
  • Better benefits (e.g., health insurance, retirement plan): 35%
  • Feeling burnt out at their old job: 34%
  • Flexible remote work policy: 34%

For employees, work/life balance is a great motivator. And some find that more feasible when working from home.

Employees Willing to Compromise for WFH

There is widespread agreement that “working from home helps ease the burnout worsened by the pandemic” (64%).

Six in 10 Americans (63%), especially Gen Z-ers (85%) and Millennials (74%), would even agree to a trade-off in order to work from home whenever they want.

Here are some of the compromises that Americans would be willing to make in order to have such a benefit:

  • More work hours per week: 30%
  • Reduced bonus: 15%
  • Lower quality health insurance 13%
  • Less generous vacation policy: 13%

Going even further, six in 10 Americans (62%) would take a pay cut in order to work from home as much as they wanted, especially parents (72%), Hispanic Americans (76%), and Black Americans (75%).

Men are more likely than women to say they would take a pay cut to be able to work from home whenever they wanted (68% men, 55% women).

YOLO — But With Cash in the Bank

Americans err on the side of caution when it comes to quitting their jobs. More than half (52%) say that they’d need at least $50,000 in their bank account in order to comfortably do so.

Only 16% would comfortably quit their jobs if they had less than $10,000 in their bank account, with only 10% considering doing so if they had less than $5,000.

Read More: The Fundamentals of Building Your Savings

Savings Are Lagging

It makes sense that Americans hesitate in making rash employment decisions, given their level of savings.

Nearly six in 10 (59%) could go without a regular paycheck for only three months or less. Nearly a quarter (22%) say that without regular income, based on their current financial situation, they wouldn’t be able to last even a month.

Experts generally recommend building an emergency fund of three to six months of basic expenses.

Threshold for Early Retirement

And what about early retirement, another employment option gaining popularity? The theme of caution also somewhat extends to Americans quitting their jobs to retire early.

Four in 10 respondents (39%) wouldn’t do so unless they had a minimum of $1 million saved for retirement, with 20% saying they’d need at least $2 million saved for retirement.

Read More: How This Woman Retired at Age 41

Not Everyone Is Onboard with Jumping Ship

Seven in 10 (70%) say that they “don’t have the luxury of ‘YOLO quitting’ their job.” That includes either retiring early or pursuing a job with less pay but better work/life balance.

However, those who haven’t taken action may still have brushed shoulders with the movement. More than half (55%) know someone who actually did so – especially Millennials, with 65% reporting they know someone who “YOLO quit” their job.

 

*Methodology: This survey was conducted online within the United States by The Harris Poll on behalf of Personal Capital from July 29 through August 2, 2021, among 933 U.S. employed respondents. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

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