Quitting work is great, but don’t forget about saving

The Great Resignation continues to produce record quit rates, which makes it a good time to think about 401(k)s and other job benefits.

If anyone thought the Great Resignation was a blip — one that would be followed by a return to jobs en masse — recent figures on quit rates will surprise them.

Or more likely, they will be tired of hearing about it at this point.

But more importantly, it’s workers who are tired. Many are fed up with trading their limited hours of life for inadequate pay and working without a sense of fulfillment amid the pandemic’s myriad stressors.

Three percent of the workforce walked away from their jobs in November, according to the most recent figures from the U.S. Bureau of Labor Statistics. That was 4.5 million people, 370,000 more than ever, surpassing records set just months before.

Industries with the highest increases in workers quitting were accommodation and food services; health care and social assistance; and transportation, warehousing and utilities.

To anyone who’s part of the Great Resignation and has sought more meaning in your 9-to-5 life: I applaud you. The same goes for those who left for employers that show them more appreciation, such as through fairer pay, higher benefits and better working conditions.

Even the financial advice business has seen some employees trickle out of firms to set up shop for themselves.

But there are risks in stepping out of a regular job, not least of which is the loss of health insurance and an employer-sponsored retirement plan. A small fear that I’ve had while watching the Great Resignation unfold is that saving for retirement will take a hit.

Among those who left work and have yet to return, or find a way to make income, some have likely been tempted to dip into their 401(k)s, assuming they have an account.

That isn’t as much of a dilemma for affluent workers who have built up assets. In their next iteration of working life, many will certainly prioritize saving, whether that’s within a solo 401(k), an individual retirement account or another option.

But it could be a real problem for lower and middle-income earners who are striking out on their own or entering the so-called gig economy — a supply of high-turnover labor for which tech-based companies do not have to provide benefits but instead offer the illusion of the freedom to work on one’s own terms.

And the urge to leave jobs appears to be particularly strong within the public sector, an understandable but concerning trend, given the likelihood that those workers have pensions in their current roles.

Fifty-two percent of 1,100 state and local workers surveyed recently said they’re considering leaving their jobs due to circumstances related to the pandemic. Of those thinking about quitting, 36% would do so to find better jobs, while 33% would retire and 28% would leave the workforce indefinitely, according to the report published by the MissionSquare Research Institute.

In all of those instances, burnout and stress were leading factors. It’s also a compounding problem, as 60% of respondents said their organizations are seeing people voluntarily leave jobs more often, and 80% of people said that the trend has put a strain on their workload.

And about a third of people who work remotely said they would rather quit than return to traditional in-person office work, according to a survey from Allspring Global Investments. That alone should give employers much to think about.

But there are reasons to be optimistic about how this unique time in work life will affect saving for retirement.

Amid a shortage of workers, more businesses are planning to increase their contributions to retirement accounts. Data from Callan show that 16% of employers are planning to do so this year, up from 12% last year. Big companies like KPMG and Meta, the Facebook parent, are reportedly doing that.

NPR’s Planet Money is calling the present phenomenon the “Great Renegotiation,” citing evidence of workers demanding more from their employers or moving on to better jobs, with data from LinkedIn backing that up. Participation in the labor market is still below pre-pandemic levels, and that is because some are waiting for better offers before going back to work, Planet Money’s report found.

Whatever the cause for leaving jobs, it’s a good time for people to demand more — whether that’s meaning, flexibility, compensation or benefits. Much like Covid, the Great Resignation might be around for a while.