As the Covid pandemic deepened in 2020, many late-career employees decided they had simply had enough. Their shift to working from home and mastering new virtual technologies—and their growing sense of isolation from the workplace—led millions of Americans to retire en masse.
Yet seemingly overnight, the factors behind decisions to leave the workforce have changed: Inflation has emerged as a potential long-term challenge, diminishing the buying power of retirement nest eggs. Stock markets are no longer pumping up those nest eggs as the major indices tumble from recent peaks. And savings built up during the pandemic are quickly receding. The personal savings rate, which is the amount of income a household saves each month, soared to 34% in April 2020, but has been steadily declining, to around 6.5% this past winter.
In a survey completed by online research firm Momentive this past winter, only 21% of adults said their finances were better off than a year ago. And nearly 90% of respondents said they were at least “somewhat concerned” about inflation, according to the New York Times.
With finances no longer looking quite as solid as they were just a year or two ago, many people are rethinking their choices, contemplating how they might re-enter the workforce. Ric Edelman, co-founder of Edelman Financial Engines, one of the nation’s largest RIA firms, suggests that many people merely embarked on a “premature sabbatical.”
Just as advisors helped clients assess the merits and challenges of an early retirement, we’re now being called on to help sort out clients’ options as résumés get dusted off and a fresh job hunt ensues.
Sam Englander, a client of mine who worked for the human resources department of a Fortune 500 tech company for 16½ years, has had a challenging job search, despite his impressive résumé. “I’m finding that there can be a gap between my past salary levels and experience and what I am seeing out there in the job market,” he says. Moreover, younger potential hires “may have exposure to the latest technologies and skills.”
As anyone who has been out of work for an extended stretch can attest, staying focused and positive is a core challenge. Sam says he has “maintained a pattern and rhythm that keeps me busy and engaged.” What he misses most is “the opportunity to interact with colleagues on a daily basis,” he says.
For this period of unemployment for people like Sam, “this is a time to recalibrate your goals and needs,” says Jim Emanuel, an advisor at the Society for Human Resource Management (SHRM). “Do you need to earn the same income as you did before?” he asks. A willingness to take a pay cut may open the door to more job offers.
While Sam has concerns that he’s “overqualified” for many job openings he sees, Emanuel says Sam should “leverage his stability, proven longevity and commitment.” These are traits that younger “job hoppers” can’t always demonstrate. (Incidentally, the word “overqualified” is no longer much in use, as it is seen as a form of age discrimination.)
Emanuel stresses that people should use the time between jobs productively—by volunteering, taking courses, getting certifications or freelancing. “This approach will keep you busy and help provide valuable talking points when you meet with a recruiter or hiring manager,” he says.
Those on extended job searches (like Sam) are likely becoming concerned about the “gaps” in their résumés since their last jobs ended. While that stigma was a clear problem in the past, attitudes are changing. A survey by employment site Monster in late 2020 found that 49% of U.S. recruiters believed résumé gaps had become more acceptable and were no longer just red flags. That’s especially the case in the current job market, where more than 11 million open jobs remain unfilled.
“Having an employment gap isn’t a deal-breaker,” notes Emanuel. “But if you let it interfere with your mindset and self-confidence, it could prevent you from landing the job. Focus on highlighting your accomplishments and the valuable skills you bring to the table.”