Since the appearance of COVID-19, we have seen wave after wave of workers abandoning their 9-5 jobs. At first, many people were leaving the workforce due to childcare issues or health concerns amid the pandemic. But more recently, the continued resignations has employers wondering where are workers going?
In this article we will explore what has been dubbed the Great Resignation. Who are the people leaving their jobs? Why are they quitting? Where are they (if at all) finding new work?
What Is The Great Resignation?
When a record 4.2 million Americans quit their jobs last October, it became clear that something was going on. Though many people blamed COVID-19, today, we know that the pandemic isn’t the only thing at play.
At the peak of 2020, COVID-19 did cause a massive increase in unemployment across the U.S. Since then, we have seen a steady decline in unemployment with joblessness at less 4% in December of 2021. But if joblessness is decreasing, why are employers still struggling to find talent?
According to the the latest research, the pandemic made people rethink work.
The Great Resignation or the Great Reshuffle?
Millennials and Generation Z are leading the charge in the “Great Resignation” trend. These groups are less likely than their predecessors to have set career or a lifelong job already. Meaning these generations know they will likely work for several companies or even in several industries throughout their life anyways.
So does that mean are they resigning from work altogether?
The short answer, no. The youngest generations in the workforce aren’t opting out of work, but reimagining what work looks like in the future.
The pandemic forced employers to become more flexible in terms of work hours, location, communication and more. It opened the workforces eyes to the future of remote work, the value of work/life balance and meaning of a fulfilling job. And now, employees are ready to make permanent changes to work life.
The next generation of workers have a different mindset than their predecessors. The rise of the gig economy, entrepreneurship and freelance work, means opportunities to make money on your own are abundant.
Some of the first to become freelancers were those who found themselves unemployed due to COVID-19, but this is growing into a greater trend driven by people leaving bad jobs or otherwise more lucrative opportunities for choice and freedom.
Are You Ready to Join the Great Resignation?
As one would expect, there are advantages and disadvantages to being a freelancer or joining the gig economy. It is crucial to weigh these and see whether jumping to freelance is the right move for you.
The most obvious pro about freelancing is that you are your own boss. You can set your hours, work when and where you want. If you get sick of a client, you free to find a new client at anytime.
Another pro of freelancing is potentially making more money than with traditional work. With major corporations and organizations including benefits like health insurance, 401Ks and stock options as your salary, it is easy to see how freelancing can be more lucrative even with the greater risk involved.
Finally, the freedom of freelancing is a significant pro. As a freelancer, you can travel and work from anywhere in the world (once COVID dies down.) If you have a family at home, you’ll find more time to see them when you aren’t committed to working 9-5.
While it may seem alluring, freelancing also has several cons. The first and most apparent is the instability of this profession regardless of industry. While traditional work provides at least a minimum base pay and insurance benefits, freelancers must make enough to pay for living expenses and insurance and emergency funds.
Another minor con is that freelancers must start from nothing. While many people are eager to leave their jobs, finding clients willing to pay you for your work is not easy. As a result, freelancers must spend time building a client base while also doing their work… and that’s usually before they start making money.
Tips You Should Know Before Going Freelance
If you’ve decided that freelancing is right for you, there are several things you can do to increase your chances of success.
Have a rainy day fund.
As mentioned above, you can expect the first few months of freelancing to be slow before things pick up. It’s important to keep this in mind and have a savings account filled with emergency funds if your income is delayed or you lose a client.
Never stop prospecting.
Freelancing doesn’t last forever. More than once, we’ve workers get too comfortable with only one high-paying client, only to lose them abruptly. They could close shop entirely, relocate, hire somebody in-house, etc. Don’t let this happen to you; always have a backup plan and be ever vigilant in finding the next client who’ll pay your bills.
Make quarterly tax payments.
When you are an employee, taxes are automatically pulled from your paycheck. When you are a freelancer, you must pay taxes on your own. If you wait to pay until the end of the year to pay your yearly taxes, you’ll be hit with a big lump sum. To mitigate your taxes, the best way to prep is to pay estimated taxes quarterly.
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