When a crisis threatens your retirement plan (part II)
Updated: Dec 14, 2021
If the 'Big Shift' forces your hand on your retirement plan
I am fortunate to have had a rewarding career of 40 years in the hospitality industry and was able to realize an exit strategy on my own terms. I have many former colleagues in the same industry for whom the pandemic has become a major bump in the road preventing them from doing the same. According to the US Bureau of Labor Statistics, more than 8 million jobs in the leisure and hospitality sector were lost at the beginning of the pandemic, spanning March and April of 2020.
The same source estimates that 60% of that labor force was hired back through to November of 2020, but then the sector retreated in December with another 500,000 jobs lost with a further slide in January 2021. A recent report by the American Hotel & Lodging Association (AH&LA) predicts that at year end 2022, hotel jobs will remain below pre-pandemic levels by about 10%. Some of this is due to an expectation that the industry will still not have recovered by that point, but also is due to the reality that hotel firms will learn how to do more with less labor input.
One former colleague and friend of many decades had worked for more than 20 years with one of the major global hotel companies. He became a casualty of the thousands of corporate staff furloughed in March of 2020 in reaction to the severe downtown caused by the pandemic. At the time, it was unclear how long the furlough would extend and how many employees would be asked back. For some, an option on the table was to take an early retirement benefit from the company.
My friend was not at the traditional retirement age by any stretch, but his 20 years of service with the company made him eligible for the benefit. With 30 years of overall experience, he was an august practitioner, but not yet ready to ‘check-out’. He also still had a daughter in college and his passion for the hospitality business was not waning. But after reflecting on the prospects for re-alignment of his department and his position in that, he determined that the present situation offered a viable exit strategy that he could control and an opportunity to rethink the next chapter.
He is now happily (and unsurprisingly) self-employed as a consultant serving many of the business partners he worked with in his previous role.
Another former colleague that I collaborated with for more than a decade had worked 30+ years with a different major global hotel company and his furlough in March2020 became permanent with the decision to undertake a massive corporate restructuring in September of the same year. He had always imagined retiring from that company and never wavered in his loyalty, but then the pandemic accelerated the retirement. Thankfully, he had been strategic in his financial planning which provided something of a soft landing in his case.
After reflecting on what to do next, the answer came rather quickly and painlessly. His career in hospitality was spent developing and mentoring great young professionals in the industry. This experience facilitated a desire to continue the passion for helping to advance young professionals and he is now back at university to earn a graduate degree. His hope is that this will lead to a new career as an academic instructor in hospitality education.
A black swan event may impact what we are doing today, but it does not have to define who we are going forward. In fact, resilience in the face of adversity can produce strong character to sort out the next chapter.
Note: I thank my fellow confidantes for the right to provide slight details regarding their respective career evolvements as mentioned in this post.