As we are all aware, the landscape for many American businesses is changing rapidly. The COVID-19 pandemic has caused us to re-evaluate several aspects of our personal and professional lives and how they relate to the daily procedures of our careers. Following the mass reduction in workforce payrolls in 2020, we have seen a powerful resurgence in the demand for workers across almost all levels of service and industries.
This unique byproduct of the economic cycle is affecting businesses and individuals alike. The shortage of available and willing workers has created persistent wage inflation and new expectations of what employers should provide. Remote work environments and increased flexibility are among the most obvious examples. Improved compensation, sign-on bonuses, and paid time off and sick leave benefits are driving up the cost of hiring and retaining employees. Businesses will continue to struggle as they search for the right candidates to support their recovery as we emerge from the various waves of the COVID pandemic.
Workers, on the other hand, are enjoying improvements to their compensation packages, often by accepting a new position and moving on to potentially greener pastures. The Bureau of Labor and Statistics reported that a record number of workers quit their jobs in November of 2021, approximately 4.5 million workers left their employers. What is also surprising, is that the age group with the most resignations is 30-45, according to the Harvard Business Review, when it is usually highest in even younger workers.
Newly adopted technology has proven to create more flexibility in physical work locations. An increased remote work environment is fueling new trends in the real estate market and fostering what has become a national job market. Companies who are hiring for positions that were traditionally office-bound, and therefore locally or regionally focused, are now competing for candidates across the country. Without the requirement to be on-site in the major business hubs, these workers are relocating to places they find more affordable or desirable for their lifestyle.
The ongoing momentum of these trends continues to fuel the economy. Although the cost of human capital is increasing, businesses are finding new efficiencies and some overhead costs have been reduced as operations are increasingly converting to electronic methods. This trend does not appear to be slowing.
As we are faced with this new normal, you or someone you know has probably had a recent job change, or a new opportunity could be on the horizon. Along with the excitement of a new role, the transition of employers is a crucial time to re-evaluate the components of your unique financial situation. There are several considerations to ruminate on…
- What will you do with your old employer’s retirement plan?
- How will you maximize the potential of the new employer plan?
- Does your separation from the previous employer change the circumstances related to your company stock awards or RSU’s?
These are big decisions that could drastically impact the outlook for your eventual retirement. Periodically reviewing your financial plan is a smart idea. Life changes such as a new career are crucial factors in the progress and success of this planning. New salary expectations should be incorporated into your plan revisions. Saving and budgeting expectations, debt reduction efforts, and your tax planning strategy may all need adjustment, as well as other aspects of your investment portfolio. Contact your advisor if you are in one of these situations.
Let’s not stop there. Keep in mind those family members or friends who are in a career transition. If they have not yet taken the steps to structure their financial future, now is the time. Partially, to create the foundation for their future outcome but also to avoid the potential pitfalls of mismanaging their past and present company retirement plans. Connect them with your Atlas advisor. We are always happy to help someone you care about.
As always, we appreciate and value the ongoing relationships with our clients and their families. If you have a suggestion for improving our services, share it with your advisor or contact us at email@example.com
The Great Resignation rages on as a record number of 4.5 million Americans quit | Fortune
The Great Resignation Helps Workers, But Hurts Consumers. Here’s Why. (Forbes.com)