The willingness of workers to leave their jobs, referred to in the media as the Great Resignation, the Big Quit, and the Great Reshuffle, has never been so high. Over the past two or so years, the job resignation rate in the U.S has been on an upward trend, after dropping sharply during the beginning of the pandemic, according to the Bureau of Labor Statistics. It currently remains at a 25-year high. The reasons vary and include a move to a new job with better compensation and advancement opportunities, a career change, transition to part-time work, overall burn-out, and retirement. Additionally, many people felt that the old strictures of 5 days a week in the office did not offer the flexibility of the work-from-home environment they had grown accustomed to during the pandemic. According to the Pew Research Center, in 2021, younger workers were far more likely to quit than older ones. However, regardless of age and the reasons for leaving a job, developing a thoughtful plan prior to the event can help minimize the potential negative impact of job loss:
Avoid Jumping without a Net
As the old adage goes, “It’s always easier to find a new job while you are still employed.” Plan ahead to the extent possible, and secure your next position while you are still employed. You won’t seem too eager, and you won’t have to explain why you are not working currently, which sometimes raises a red flag with prospective employers. Also, you’ll be in a stronger negotiating position in terms of salary, benefits, and perks. Finally, with the cushion of current employment, you have the advantage of taking your time to accept a position that you truly feel is a great opportunity.
Be Budget-Conscious
If you do find yourself in a situation where you are leaving your current job prior to finding a new position, it’s a good idea to make sure your short-term living needs are covered, particularly for those starting out in their careers, who may not have the resources to weather a period of unemployment. Finding a new job can take time, and we recommend putting aside an emergency fund of six plus months of salary to cover regular expenses, such as food, mortgage or rent, utilities, and insurance, plus a buffer for unanticipated expenses. You may also want to review your monthly expenses to see if you can make certain cutbacks.
Prepare to Resign
If you know you want to leave your job or believe that your job may be eliminated, meet with your attorney to review your company’s policies and their ramifications, such as the treatment of benefits, non-compete and non-solicit clauses, any claw back compensation that might be due back to your employer, accrued vacation or sick leave, and other compensation related items. Leave on good terms and maintain your reputation by giving ample notice and acting professionally.
Review your Health Insurance and Other Benefits
One of the biggest concerns about leaving a job is the loss of health benefits. If you’re on your employer’s plan, you will typically lose your health insurance once you leave your job. However, under federal law, COBRA protects employees from losing health insurance coverage due to job loss, reduced hours, or divorce, unless it is due to misconduct. Consider coverage under your spouse’s plan, which may be more economical if that is an option. Your respective employers should be able to give you information so you can make sure you and your dependents are insured during the period when you are not covered by your previous or future employer.
Navigating the twists and turns of your career can be stressful. Klingenstein Fields Advisors is here to help you prepare for life’s uncertainties and plan for the future. We encourage you to consider us as your trusted resource to help assess the impact of changes in your professional life. For more information, please contact us directly by phone at 212.492.7000 or email us at info@klingenstein.com. You’ll find News and Insights on our website and can view our educational webinars on a variety of financial topics on our YouTube channel. And please don’t forget to follow us on LinkedIn, Instagram, and Twitter.
