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Tuesday, February 27, 2024

How finances factor into the pandemic Great Resignation

Key takeaways

A new survey reveals 66% Americans are interested in switching jobs. Learn the personal financial aspects of the "YOLO economy."

08.10.2021

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

According to our survey, it turns out that a majority of Americans surveyed (66%) are interested in calling it quits in the pandemic-era phenomenon known as the You Only Live Once (YOLO) economy and Great Resignation. This is particularly true among younger generations (91% of Gen Z and 78% of Millennials).

About 4 million people quit their jobs in April 2021, according to the Labor Department’s Job Openings and Labor Turnover Summary. However, that same month, just over 6 million people were hired.1

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.” Those under 40 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%) expressing such sentiment, including 75% of Millennials.

Some Americans (13%) switched jobs in the last six months, including 22% of Millennials and 17% of Gen X.

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 (WFH).

Employees willing to compromise for WFH

There is widespread agreement that WFH home helps ease the burnout worsened by the pandemic (64%). And six in 10 Americans (63%), especially Gen Z (85%) and Millennials (74%), would even agree to a trade-off to WFH whenever they want.

Here are some of the compromises that Americans would be willing to make 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 to WFH 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 WFH 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 they’d need at least $50,000 in their bank account to comfortably do so.

Only 16% would feel comfortable quitting 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.

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.

Financial professionals 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 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.

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 acted may still have brushed shoulders with the movement. More than half (55%) know someone who did quit — especially Millennials, with 65% reporting they know someone who YOLO quit their job.

1 U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Summary, May 2021.

*Methodology: This survey was conducted online within the United States by The Harris Poll on behalf of Empower 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. 

*Unless otherwise noted, all statistics are from the survey conducted online within the United States by The Harris Poll on behalf of Empower from July 29 through August 2, 2021, among 933 U.S. employed respondents.

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