The Great Female Resignation: Making the Transition

By Nicole Young on March 25, 2022

Women have always faced their own distinct financial circumstances due to longer lifespans, a stubborn glass ceiling, and career interruptions. The sudden onset of the Covid-19 pandemic only exacerbated these distinctions as family routines were thrust into disarray. Faced with the decision of whether to sacrifice family or career, many women chose the latter. In fact, the U.S. Bureau of Labor Statistics reported that the women’s labor force participation rate dropped more than 3% from February to April 2020, to the lowest level since October 1985.¹

This trend is part of the collective economic phenomenon known as the “Great Resignation,” which continues to disproportionately affect women. As many as one in three women in the United States thought about downshifting their careers or leaving the workforce in 2021.²

Strategies for Your Next Act

If you are part of this phenomenon — either in thought or action — you may have concerns about the implications for your finances, lifestyle and psyche. To help, here are some strategies, gleaned from the experiences of other women, for thriving during your next chapter.   

1. Recognize that part-time may be an option. Whether you are leaving your job to focus on family, redefine your career, explore a passion project or seek a balance between multiple roles, the realm of possibilities is widening. Researchers at Harvard Business School’s Project on Managing the Future of Work and BCG Henderson Institute³ found that 90% of companies surveyed see a future competitive advantage in shifting their talent model to a blend of full-time and freelance employees. This is leading to workplaces that are ripening with flexible options that can accommodate a variety of lifestyles. 
2. Maintain your relationships — especially with other like-minded women. While flexible work models are on the rise, access to them — now or in the future — may depend on your relationships. Meghan McCartan, managing director and head of marketing at Hightower Advisors, illustrates this point. The mother of four teenage daughters recounts: “I was always passionate about advancing my career and raising my daughters. When my first child was born, I advocated for myself and managed to carve out a consulting role that provided me with the freedom to wear several hats. Many of my peers, however, couldn’t find similar opportunities. Right now, remote work is literally everybody’s every day, but I’ve held my experiences with me and want to ensure that we continue to build sustainable opportunities for women to thrive.” As McCartan highlights, networking is a two-way street: Doing your best to advocate for other women interested in finding flexible work strengthens the movement and increases the odds of finding your next opportunity.
3. Staying Professional Active. Identify opportunities to remain active in your career without the constraints of employment through volunteerism, board positions and women’s networking groups. These experiences can keep you better connected and more marketable. Even if you don’t plan to return to the workforce, you never know how you might feel down the road or what life could throw at you unexpectedly.
4. Fortify Your Financial Plan. Though there are many motivations for contemplating a career shift, certain preparations should be standard. By proactively planning in advance of resigning, you can raise the likelihood of a smooth transition. Here are some steps that you should take:

• Review your employment contract, original offer letter, employee manual or any other documentation that outlines your compensation arrangements, paying extra attention to vesting dates related to retirement plans and stock options. It is possible that you could benefit significantly from only slightly adjusting the timing of your resignation.
• Adjust your budget after analyzing the impact of this lifestyle shift, considering costs related to childcare, commuting, wardrobe and meals.
• Reassess your investment portfolio’s asset allocation with the help of your financial advisor, as you may need to adjust its risk profile given the lower level of income you expect.
• Continue contributing to a tax-advantaged retirement account, which may mean:
  • If permitted, remaining in your current employer-sponsored 401(k) plan, understanding that you won’t be able to make additional contributions; OR
  • Rolling your benefits into a new employer plan, traditional IRA or Roth IRA.
• Ensure you won’t experience a lapse in health insurance by reviewing your options through state, federal, private or spousal programs. The Consolidated Omnibus Budget Reconciliation Act (COBRA) is the most well-known option. This law mandates that employees of private or public entities (with 20 or more employees) have access to workplace health benefits beyond employment. COBRA benefits generally last up to 18 months, and in some cases, longer. As you consider your options, be sure to factor in the costs of premiums and deductibles.
• Prepare for the unexpected. If workplace life insurance is your only coverage, consider purchasing your own to ensure that your family maintains a financial safety net. When tabulating the appropriate coverage, take into account your earnings as well as non-income-bearing contributions, i.e., the cost to keep a household running. As an added incentive, life insurance is one of the few purchases for which women, on average, are charged less than their male counterparts.⁴

5. Embrace an Authentic Lifestyle. With the advent of remote work, our authentic lives have been brought to the forefront of the work environment. Instead of living behind the shields of office furniture and walls, our personal lives are on full display through our PCs. While this brings its own set of challenges, the third wall has been lifted, and we now live in a world where all aspects of our lives intersect. As you ponder your next role, proudly showcase the many hats you wear with authenticity, vulnerability and strength. Those characteristics can contribute to stronger relationships in every aspect of your life.

McCartan often turns to a favorite quote: “Some say you have to put only a career on the front burner — but most stoves have more than one front burner.”

Find what fuels your fire — there may be several sources.

We are here to help. If you have resigned or are considering resigning, please reach out to us for help. It would be an honor to support you during this important next chapter of your life, and we believe you can benefit from our experience helping other women and families who have undergone similar transitions.

_{1 U.S. Bureau of Labor Statistics, Labor Force Participation Rate – Women [LNS11300002], retrieved from FRED, Federal Reserve Bank of St. Louis, https://fred.stlouisfed.org/series/LNS11300002, February 19, 2022.}

_{2 McKinsey & Company, “Women in the Workplace 2021.” September 27, 2021.  https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace. Accessed March 7, 2021.}

_{3 Harvard Business School (HBS) and Boston Consulting Group, Managing the Future of Work, December 2020.}

_{4 The Policygenius Life Insurance Price Index February 2022, updated February 2, 2022. https://www.policygenius.com/life-insurance/life-insurance-price-index/february-2022/, retrieved March 7, 2022.}