Gen Z Is Taking ‘Micro-Retirement.’ Don’t Laugh.

(Bloomberg Opinion) — Gen Z has been in the workforce just long enough to want out. Well, at least temporarily. The concept of a micro-retirement has started to trend (again) on social media, which makes it seem as if an entire generation of twenty-somethings wants to take an adult gap year.

Is this a rebranding of the more well-known sabbatical? Yes, with a couple of noteworthy caveats: Micro-retirement isn’t employer-granted —  say goodbye to pay while you’re away or a guaranteed job upon return —  and it’s meant to be more of a routine lifestyle choice to combat burnout and pursue personal passions.

But it’s not Gen Z that should be fixating on micro-retirement; it’s companies. 

Employers can and should offer these sorts of breaks to their employees as a workplace benefit, especially if working remotely is no longer an option. Offering access to an employer-granted micro-retirement, which sounds far chicer than “sabbatical,” is one more set of golden handcuffs. It’s a perk akin to an employer-matched 401(k) or restricted stock units with a suboptimal vesting schedule or the ultimate golden handcuffs: health insurance.  

Asking businesses to adopt workplace changes inspired by the whims of the youth can seem impractical and create the cliché “kids these days” response from older employees and bosses, but they should remember that the practice is not necessarily a new phenomenon.

Everything from what people wear to what’s a socially acceptable way to speak to a subordinate to the demographics of the office was shifted by young employees over the decades. Gen Z just happens to broadcast their strategies like “quiet quitting” or “lazy girl jobs” on social media, which can often make the ideas feel like passing trends.

But before micro-retirement is dismissed outright, consider what companies are up against. Businesses should be focused on retention, especially with 18% and 36% of the workforce now made up of two generations —  Gen Z and millennials, respectively —  that have demonstrated they have no qualms with quitting and job hopping. 

It can cost tens of thousands of dollars to replace an employee. First, there’s the recruiting process and lost productivity that comes with it, including the managers and current employees taking time to interview prospective replacements. It also often takes an increase in pay to attract quality talent to the now-empty position, especially if the previous employee was around for several years. Then there’s having to train talent, which can still result in lost productivity until the new hire is fully onboarded and up to speed on the role. Salary.com estimates that replacing an employee can cost between half and twice their salary.

On the flip side, micro-retirement could be treated like an employee going out on parental leave, and work could be distributed amongst colleagues. Perhaps it could be a benefit that is unlocked after three years at a company, can last up to four weeks at a time and eligibility renews every three years. However a company chooses to implement it, the advantage is that it’s a perk available to everyone, which may lower any animosity that co-workers sometimes have toward those going out on parental leave. 

If you’re wondering if the concept of a sabbatical truly needed to be rebranded, perhaps it does. The newer term may represent more than just a catchy phrase for its users. Sabbaticals have usually been tied to academia. Taking one often includes research or bettering skill sets to return more useful for an employer. But the term micro-retirement embodies the idea of a complete break from work to indulge in life while you’re younger and presumably healthier.

The indulgence doesn’t have to be a swoon-worthy vacation to splash all over social media, either. It could be as simple as having the gift of focused, uninterrupted time to spend with loved ones.

That’s the sort of break that sounds enticing to younger workers when they start crunching some numbers. Life expectancy in the US has fallen in recent years, to about 80 years for women and just shy of 75 for men,  according to the US Centers for  Disease Control and Prevention. The mean age that non-retirees anticipate retiring is 66 years old, according to a 2023 Gallup poll. Having less than 15 years to enjoy leisure time after over 40 years in the workforce is pitiful, particularly in a country where, according to a 2023 Pew Research Center study, 4 in 10 workers fail to take their full allotment of vacation days. The US Bureau of Labor Statistics reported the average private sector worker receives 11 vacation days after one year of employment, and it only goes up to 18 days after 10 years. 

Even with that grim outlook, the likelihood of companies rapidly coming around to offering micro-retirements is slim, which is why anyone who wants to take one will have to continue to work toward funding their own time off. That’s so long as the prospect of finding another job or figuring out a backup plan for health insurance won’t cast a pall on the micro-retirement movement.

I’ve dealt with burnout more than once in my career — both when I was traditionally employed (and working a side hustle) and as a self-employed millennial. The latter status allowed me the flexibility to take a three-month break, but worrying about losing out on opportunities was hard to shake. I suspect Gen Z may need a little bit of practice to overcome this part: I had to be confident and disciplined enough to decline work opportunities for three months, fully get off social media, and focus on pleasure and creativity to alleviate the burnout.

It wasn’t a magical cure-all, but the distance from the rut of routine sparked new ideas and clarified changes I needed to make in my business and life. From Bloomberg Opinion:

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Erin Lowry is a Bloomberg Opinion columnist covering personal finance. She is the author of the three-part “Broke Millennial” series.

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