Updated 27 July 2022
The Great Resignation or the Big Resignation has become a global phenomenon since COVID-19.
An unprecedented number of workers have decided that their job is no longer a good fit for their lives and moved on.
The pandemic caused many of us to reassess our lives, our priorities and our careers, and the Great Resignation seems to have been driven by this.
Crucially, it’s not over yet. New research shows that 20 per cent of UK workers are planning to leave their current employment in the next 12 months, in search of better pay, greater job satisfaction and a more favourable work/life balance.
So where are people heading when they resign? A Labour Force Survey indicates that most people who resigned between 2019–2021 did not make a drastic career change, but moved to a similar job that simply paid better.
But this is not the whole story. The Great Resignation is not fuelled by money alone.
The pandemic put a lot of strain on employer/employee relations — there was a need for greater compassion, empathy and flexibility. When people felt these qualities were lacking, they became dissatisfied and frustrated.
This groundswell of feeling surfaced on social media, where people revealed the working conditions and employer attitudes that persuaded them to resign.
A prime example of this was TikTokker @saygracee23 who shared a short video revealing that her employer had pressurised people to work despite testing positive for COVID, and had shown a singular lack of empathy and sensitivity. The post gathered more than 1.2 million likes.
Generation Z and millennial workers in particular are sharing their aspirations and feelings in this space, and, perhaps in part due to having fewer ties and commitments, are more predisposed to seeking greater freedom and job satisfaction.
On a year-to-year basis, 80 per cent of Gen-Z workers move jobs, and 55 per cent of millennials would leave their job if it compromised their personal lives, according to consulting firm Randstad.
At the other end of the scale, some people in the over-55s group left employment to take early retirement — a permanent solution to the work/life balance problem.
Another facet to the Big Resignation is a significant drop in self-employment.
The pandemic hit the UK freelance economy hard, with two-thirds of the sector’s workers negatively impacted.
The introduction of IR35 tax legislation, which can reduce a limited company contract worker’s net income by up to 25 per cent, has also had a significant impact, with up to one fifth of freelancers considering a return to salaried employment.
Data from Independent Professionals and the Self Employed (IPSE) shows that the number of solo self-employed workers fell by five per cent between 2020 and 2021, with the biggest drops being in management and directorship roles.
The Big Resignation is showing little sign of stopping, so should you join the millions worldwide who have made the move?
Firstly, take a long, hard look at your priorities — now and for the future. Are you looking for more professional fulfilment, a totally different industry, more responsibility, more time with your family, a shorter commute and remote working or do you simply want better pay and conditions for the same sort of work?
Crucially, do you want to find a different job, or be self-employed?
Before moving to a new job there are some personal finance points you should think about carefully.
A professional financial adviser can provide expert guidance at this important turning point in your working life — it could make all the difference.
Firstly, find out exactly what notice period you will have to serve in your existing job — this can be anything from seven days to several months.
Your potential new employer will need to know when you can start, so have the facts at hand before you begin searching.
Although you’ll be concentrating on your next move and new salary levels, it makes sense to create a kind of financial buffer before leaving your current job.
There’s no guarantee that the new career move will work out, so it pays to have a little safety margin built into your plan. Aim to put enough aside to cover bills and living expenses for a couple of months.
It’s all too easy to get dazzled by the promise and potential of a new job, a new sector, new colleagues and surroundings, so take a step back and make sure that this new move is really going to fulfil your ambitions.
Ask yourself why you moved on in the first place. Are you going to enjoy a better quality of life? Will you see more of your family and friends? Can you work flexibly to suit your circumstances?
Becoming self-employed is a big step if you’re used to the security of a guaranteed monthly wage, structured daily hours and the hierarchy of a team around you.
There are some important finance-related steps you should consider, to make the transition easier. As with changing jobs, an expert financial adviser will be able to offer invaluable tips and pointers from day one.
At the same time, set up a dedicated business bank account to keep everything transparent and help you to track incoming and outgoing payments.
Try and incorporate a savings fund into your budget, so that you can put some money aside automatically each month. Freelance income can rise and fall without much warning, so it’s a great idea to have a contingency fund.
Set up your financial bookkeeping system, using accounting software, so you’re organised from the start. A qualified accountant can help you with this vital side of self-employment.
Decide which business structure is right for you. This will affect how you’re taxed and will become more important as you grow — especially if you make large profits, need to work with a big company or hire extra people.
Common business structures include sole proprietorships, partnerships and limited liability companies.
Making a fresh start in your career can be inspiring and exciting. To make sure it’s a positive step, you need to prepare and proceed with all the knowledge you can gain.
A financial adviser can certainly help you with important aspects of this preparation and help to ensure that your move lives up to the dream.
Check out the articles below to learn more about the future of hybrid working, or a guide to help your clients with the rising cost of living.
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