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The Great Resignation in Canada and Your Money

#greatresignation is trending. What's the data behind it and what does it mean for you?

The way we work has drastically changed over the past year-and-a-half. Covid-19 upended our lives in nearly every way; forcing us to stay indoors, to practice social distancing, and, for most office workers, to work from home. 

In January 2021, 32% of Canadian employees aged 15 to 69 spent most of their working hours at home, according to Statistics Canada. That was up from 4% in 2016, and was largely due to the impacts of Covid-19. 

Now, however, it seems that many employers are intent on welcoming their employees back to the office. 

What happens when employees refuse? Well, we’re starting to see the effect and it’s been dubbed “The Great Resignation.” But, the pending office return might be just one factor driving the resignation trend.

The Great Resignation: What is it and why is it expected?

In a report entitled The Next Great Disruption Is Hybrid Work – Are We Ready, published by Microsoft, 54% of GenZ workers and 41% of the entire global workforce is considering resigning from their current roles.

Meanwhile, a Prudential survey of United States workers found that 42% of employees would quit their company if remote working isn’t offered going forward. 

The Microsoft report, which included surveys from 30,000 workers in 31 countries, uncovered seven trends they’ve identified that will shape the future of work. One trend, though, seems to be at the heart of what may be driving The Great Resignation: “Leaders are out of touch with employees and need a wake-up call.” A refusal to offer flex work going forward will likely drive a wedge even further between employers and employees in the near future.

Many business leaders are faring better than their employees. 61 per cent of leaders say they are ‘thriving’ right now — 23 percentage points higher than those without decision-making authority,” Microsoft wrote in the report.

It isn’t just office workers who are expected to drive The Great Resignation, however. With the service industry decimated during Covid – with restaurants having to close and restaurant workers laid off – former service workers have turned to other career paths. 

Employment in the food and drink services industry dropped 55.8% within a few months of the pandemic, according to Statistics Canada. These workers were forced to look to other industries for income, or spend their time learning new skills. Skills that will likely translate to jobs in industries outside food and beverage.  

The pandemic also resulted in record numbers of layoffs, with 12.4% of Canadian workers being laid off, according to a June report by Statistics Canada. 

These laid off workers faced a decision: Wait for calls back from their current employees, search for new work, or level up their skills in the hopes of earning a higher paying job in the future.

Employees face a crossroads

The pandemic has reshaped the way we think about work. Those who worked from home for the past 17+ months have experienced a working style that allows for more personal time with family, fewer hours in the day lost to commutes, and more freedom to work how and where they feel most comfortable. That experience will have a lasting effect and will shape expectations for work going forward. 

So, if employees who have been working from home since the pandemic – and have grown to enjoy it – are expected back in the office, they might decide to leave their current roles. 

Of course, they have options. They can find a role in the same industry with a company that offers flexibility, pursue an entirely different career, or work for themselves. 

A boon for entrepreneurship?

I am a part of The Great Resignation.

For my entire career, I’ve worked in offices in Toronto; first in communications with a financial company, then as a journalist, and finally as a content strategist and creator for companies of various sizes. The pandemic forced me to work from home, which allowed me the freedom to finally work the way I like to: during hours I prefer, in places I prefer. And I actually found a new role during the pandemic, and spent an entire year working remotely. 

I worried about a potential return to the office. Eventually, I realized it could be up to me. When my former employer announced a return to work plan, I realized it was time to move on. 

So, I resigned before lining up another job. I already had some great freelance clients, I teach on the side, and I had some money saved, so it wasn’t the most irresponsible decision. But, it was still hard. Countless conversations with my family and friends. Nights spent crunching numbers and re-jigging budgets.  

If you're like me, and are considering a move away from full time work to be self- employed, here are some things I considered before taking the leap.

Re-do your budget

My partner and I have a set budget of monthly expenses. We’ve divided all the bills up and take care of our fair share, so re-visiting our budget was necessary before I became self-employed. Our calculations gave me an exact figure for my monthly bills – that number would be the bare minimum I would have to make each month to ensure everything was covered and I wouldn’t have to dip into savings.

Your income will fluctuate when you’re self-employed. That may be the most noticeable change – especially if you’ve always relied on a regular paycheque. Avoid any large and unnecessary purchases within the first few months of being self-employed, at least until you have a sense of what your monthly earnings will be. 

Make sure your emergency fund is topped up. Financial gurus who are much smarter than me can’t seem to agree on a set figure, but having at least six months of expenses stashed away should give you a solid cushion. 

Need a budget spreadsheet?

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Plan for the future of your business

As mentioned, I had existing freelance clients, but I wanted a few more to provide some comfort. Luckily, within a month, I was able to land three new clients by reaching out to the network I had built over the past 10 or so years of working.

Whatever you plan to do, create a road map. Set goals for the first month, three months, and six months. These might include: contacting potential clients, researching your chosen industry, signing up for classes, building a business plan, educating yourself about finances and taxes etc. There’s no shortage of things required to learn and do when working for yourself – and be prepared to do a lot of work for no money just to get your business up and running.

Here are a few things on my to-do list (some have been ticked-off; others are still mocking me, waiting to be completed).

  • Register a business name
  • Set up a separate bank account for income taxes (I set aside 30% from all earned income)
  • Register for an HST number (you’re only required to start charging HST or GST on sales or income earned in excess of $30,000)
  • Set up another bank account to stash HST/GST (Think of yourself as a mule for the government. You charge, collect, and spend HST/GST on your journey – they just want what's left in the bag at the end.)
  • Register domains, update or create social media accounts
  • Develop an invoicing and project management process
  • Figure out if you need business insurance
  • Research as much as possible to increase skills and confidence

Get free business insurance quotes

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Nothing is set in stone

Self-employment doesn’t have to be permanent. You can always return to your chosen field, or pursue an entirely different career, with an employer at a later date. 

If you do decide to leave your current job to pursue self-employment, make sure you leave on good terms. Give proper notice and ensure your projects are wrapped up to the best of your ability before embarking on your next journey.

The bottom line

The past 17 (and counting) months have opened our eyes to what’s most important. For many, that means a shift in how we want to work. If you’re planning on joining The Great Resignation, you won’t be the only one. We’re all likely in for even more months of uncertainty, and now might be the best time to re-evaluate your career and what you want from it.

 

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