How to prepare for the Great Resignation

Has the pandemic made you realise you’ve had enough of your job? Here are a few things to consider before pursuing your dreams.

The events of the past two years have prompted many of us to re-evaluate our lives. With more than two-thirds of workers tempted to join the Great Resignation wave, this soul-searching has clearly brought people’s dissatisfaction with their work into sharp focus.

Is writing that resignation letter really a smart move? Experts suggest you should first ask yourself some key questions and then prepare yourself financially.

“Never apologise for wanting to love the work you do. If you hate it, then change it,” says Gary Crotaz, a careers expert and author of TheIDEA Mindset, a book about getting what you want from work.

Crotaz identifies several common signals that might indicate it is time to move on:

• Recently, you’ve not felt at your best at work
• It feels like something needs to change, but you don’t know what it is
• Your health is declining. Weight gain, bags under the eyes, and skin flare-ups are all tell-tale signs
• You’re drinking more coffee than usual to get through the day
• You’re drinking alcohol to cope with the stress of work, rather than for enjoyment
• When you think back, you’re surprised at how long you have been under continuous stress and pressure

If these signals apply to you, it might be time to think about doing something different. Leaving a company altogether is not the only option, though. Before taking this step, consider whether a temporary break or a tweak to your working arrangement might be a solution.

There are different options for certain roles, including:

• Take a sabbatical with the security of a job to return to afterwards
• Become your own employer and build up a roster of clients or customers
• Move into a consulting position with your current company or take on a less pressured or a part-time role there

If none of these options is appealing, it might be time to apply for a new role at a different company.

No matter what route you choose to take, there will likely be financial implications now and in the future. If you’re serious about changing jobs, make sure you have enough to cover your bills if there are any breaks or misalignments in your future paydays. If you're exploring new careers or lifestyle options, you’ll probably need to accumulate some savings before making a major move, in case it takes time to start earning again.

Kat Mann, savings and investment specialist at digital wealth manager Nutmeg, says by taking precautionary steps you might ensure that your own Great Resignation is a financial success if you haven't got another job lined up or are about to embark on a self-employment journey. Here are some things you should consider:

“We would suggest keeping between three and four months of your expenditure in an easily accessible account,” says Mann. “If you’re considering giving up work completely, you may want to increase this to six months, to know you could cover your essential spending.”

Your current role may come with a pension, share options and a savings plan. Replacing these as a self-employed worker or consultant comes at a cost, so you may wish to research service providers specifically geared towards small business owners.

If your circumstances allow it, Mann suggests considering consolidating pensions with one provider, for easier control, tracking and for topping-up pensions, since the tax breaks on saving for retirement can be generous.

If you start somewhere new as a salaried employee, it's generally a good idea to keep paying into your pension. Rather than being tempted to reduce your contributions, maybe increase them, if you can afford to.

It's possible, of course, you may land an even better-salaried job as the current labour market continues to recover post-pandemic. If that doesn't happen, you may find that your finances could be rocky until you find a new position or get a freelance career up and running.

That’s why it’s useful to go through your budget with a fine-tooth comb, checking for any unnecessary or extravagant outgoings. “Reviewing your spending on a regular basis is a good habit to get into,” Mann says.

The upside of being a freelancer is that you can network freely and take on ad hoc projects that could be more lucrative than working as an employee. You could also sign up with an agency, and, while it does involve some fees, it could be a foot in the door to an exciting project.

Both ways of working have their pros and cons – just remember to think about your options before writing that resignation letter.