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For many Americans, the rules of the workplace have quietly changed – which, for countless individuals, means it’s time for a reality check.

At this point in the pandemic, remote work has become the norm for many employees. And many employers have instituted new freedoms related to childcare, wellness and personal enrichment.

Considering these shifts, it’s not surprising that more people have also been rethinking their priorities – and making changes in their work and personal lives – during this time, known as the Great Resignation.

New Day in the Workplace

In October 2021, more than 4 million Americans quit their jobs, according to the U.S. Bureau of Labor Statistics. And by the end of the month, 11 million positions were left unfilled.

Experts don’t always agree on what’s behind the mass resignations, but there are theories. Ulrike Malmendier, an economist at the University of California, Berkeley, suggests the pandemic and the ensuing rise in remote work ultimately changed how we all view our lives and the world going forward. The experiences triggered a fresh look at the decisions we’ve made around work and life, causing many people to reevaluate their lives and how their careers support their priorities. Some examples of the priority-driven reasons that are leading people to make work changes include:

  • Improving their mental health or well-being
  • Taking care of family or loved ones
  • Being able to work remotely
  • Achieving a higher-paying job or salary on par with inflation
  • Downshifting to a more cost-effective lifestyle
  • Finding work with a more flexible schedule
  • Relieving feelings of burnout on the job

If You’re Thinking About a Job Change

Large-scale resignations have also created an unprecedented job market, reinforcing the appeal of making a change. So whether you’re a staff employee or in a supervisory role, it may be a good time to revisit your priorities and consider what changes might benefit you.

If you’ve thought about new possibilities, then getting your finances in order can maximize the opportunities open to you. For example, you may want to take time away from work for an extended sabbatical, a job hunt or to start a new business.

Making changes like these can be easier by weighing a range of professional and financial implications, such as:

  • If you’ve always wanted to move into a different field of work, now could be a good time to do it. With the robust job market, more employers may be willing to invest in your training. But it’s best to act fast, as the current conditions are not likely to last indefinitely.
  • Finding a new job before leaving your old one increases the chances of having work that checks all your boxes and protects your finances. It can also lead to having a gap between jobs. While this has traditionally been a situation to avoid, now that more people are reprioritizing their lives and careers – and during this robust job market – many employers may be less concerned about gaps.
  • Know that the job search could take months, rather than weeks. Get prepared for time off the job by having an emergency savings fund to cover your expenses for at least six months, and possibly up to 12.
  • Don’t underestimate your expenses. Quitting a job usually means leaving behind benefits like health and life insurance, which can be expensive to cover on your own. You may also need to foot the bill for training, equipment and supplies for your new career.
  • If you find a higher-paying role, consider how it will affect your longer-term financial goals. With increased funds flowing into your checking and savings accounts, it might be a good time to recalibrate your savings approach.

When Between Jobs

If you are between jobs, taking on debt to sustain yourself can be an option, but watch out for unnecessary costs. Keep in mind these strategies:

  • If using credit cards as a source of cash, steer clear of those that charge high interest rates. And, if you’ve built up debt on high-interest cards, consider transferring those balances to a card with a lower interest rate, or to a balance transfer card offering a promotional APR. You might also switch out of cards that charge expensive annual fees.
  • If you’re starting a new business venture, then you may qualify for credit cards designed for new businesses even if you don’t qualify for a business loan.
  • Tapping into your mortgage or refinancing your home loan are additional strategies you can use to bring in funds while unemployed or to reduce your expenses. For example, you can use the equity in your home to obtain a home equity line of credit, which you might need to cover expenses like medical bills or major repairs. Alternatively, refinancing your home loan can be a way to lower your interest rate and reduce your payments. Just remember to factor in the closing costs involved, as any fees involved in doing this might be high enough to offset the benefits you’ll receive.

    The timing in pursuing these options is another consideration: It’s more difficult to refinance your loan if you’re unemployed. So if this is an option you’re serious about, you might want to apply before quitting your job.

Employees aren’t the only ones deeply affected by the Great Resignation. Employers are, too. If you’re in a leadership role, now is the time to reevaluate your approach with employees, including placing a greater focus on the mental health and well-being of your team.

Retaining employees could mean rethinking compensation and benefits, providing greater flexibility in work arrangements, offering childcare support, prioritizing employee education, and implementing recognition and rewards programs. You might also increase promotions from within your organization, which can help to influence other employees seeking promotion to stay.

A Time for Optimism

Whether you’re an employee or an employer, the Great Resignation ultimately should hold more opportunities than risks. It’s a time that can lead people to rethink and realign with what’s most important for their families and their lives, as well as help them to find more fulfilling careers. It’s also making the workplace far more responsive to many of these same priorities.

If you find this is a good time to make career and personal changes to match new priorities, know that Key is here to help. We offer services, programs and one-on-one consultations to make it easier to manage your finances in ways that support your goals now and in the future.

This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice.

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