Thinking about a micro-retirement? Know the risks

It has had a few different names – the adult gap year, the life reset, the career break – but none have caught on quite like the latest iteration: the micro-retirement. It’s the trend for younger employees to combat corporate burnout by taking an extended break to replenish and recalibrate.

Pursue a new passion. Get better at yoga and surfing. Head overseas and explore, and return with newfound energy to work and earn with gusto.

“It can certainly be beneficial to health and wellbeing,” says Dr Sugumar Mariappanadar, a leading expert in sustainable human resource management, and senior academic researcher at the Peter Faber Business School.

But micro-retirements can have unintended consequences, Dr Mariappanadar warns. He cites research showing that career breaks can have long-term “scarring effects”, including financial stress due to lost income, and a dearth of job offers when it’s time to get back on the hamster wheel.

“When you return from a micro-retirement or any type of self-financed career break, these scarring effects can wipe out all the positive energy you have replenished,” he says.

“You might come back thinking you’ll find a job as easily as you did previously, but maybe that doesn’t happen, so your self-esteem suffers. This can very quickly lead to mental health issues, triggering a negative cycle that can be hard to break.” 

Evolution of the trend

The term micro-retirement (or ‘mini-retirement’) has been in the lexicon since at least 2007, when it appeared in the book The 4-Hour Work Week by blogger Tim Ferriss.

Almost two decades later, it has reached new heights on social media, where influencers have given the trend their TikTok of approval.

Take digital creator Anaïs Felt, who says she has “never felt better” than she did after taking a micro-retirement. Or fellow TikToker Ben Askins, who asks, “Why on earth wouldn’t you do it?”. He makes the point that these days, many people reach retirement age with insufficient savings, forcing them to continue working until later in life.

“People are recognising that a lot of Boomers and Gen Xers thought they would be retiring, but they can’t afford to and so careers are getting extended,” Askins says in his viral video.

“Gen Zs and Millennials are looking at that and saying, ‘Well, the old way was to work really hard until you’re 60 or 65 and then retire and enjoy your glory years’. And people are saying, ‘I’m not sure I’m ever going to be able to do that, so I’d rather take smaller breaks, avoid burnout, and treat my career as more of a marathon rather than a sprint’.”

Dr Mariappanadar notes, however, that while micro-retirement has gained traction on TikTok and other platforms, there is no hard evidence that it’s occurring more frequently among Gen Zs and Millennials than it did with past generations.   

One trend that does appear to be backed by evidence is that younger employees hold different workplace values than those who came before them (see here, here, here and here).

“There is very strong evidence that Gen Z values greater flexibility and work-life balance,” says Dr Mariappanadar, who has two children of Gen Z age, both of whom are in the workforce.

“These younger generations tend to be less concerned about making money or moving up the career ladder than previous generations, and because of these shifting values, there’s an inference that they’re more likely to take micro-retirements.”

These stark generational differences can cause friction in the workplace, with Gen Zs and Millennials labelled as lazy and lacking in work ethic.

For the record, Dr Mariappanadar does not subscribe to this negative view.

“When I consult with top-level management about how work-life balance is important for Gen Z in terms of attracting and retaining them, often they will say to me, ‘Gen Z aren’t as committed to career as our generation (i.e. Boomers) were’,” he says.

“It may be true that Gen Z values are different, but just because they want balance, it doesn’t mean they’re slack and not committed to career growth. In fact, often the employee who achieves work-life balance is more productive in the long run to benefit the organisation.”

As was recently declared in the Australian Financial Review: “Gen Z aren’t lazy. They just don’t want to ‘live to work’.”

“When the work culture is highly intensified, you can see why an employee might say, ‘This is harmful and unsustainable because my work is not allowing me to have that balance’,” says Dr Mariappanadar, who in 2015 developed the Health Harm of Work scale.

“In this case, their values might lead them to take a micro-retirement so they can rejuvenate and enjoy life, which is fair enough. But the question is, how long is that break? If you’re thinking of taking six months or a year where you’re out of the work context, there are risks you should consider before making that decision.”

Same-same, but different

In response to all this talk about micro-retirement, more than a few pundits have raised the argument that it’s simply a Gen Z rebranding of the sabbatical, which has long been a feature of the workforce. But Dr Mariappanadar believes there are important differences.

In a recent article for The Conversation, he suggests that micro-retirement involves a voluntary choice where an employee quits their job and supports themselves for a period of time, either through personal savings or government support.  

“Traditional sabbaticals tend to be done in consultation with the employer, and typically they continue to pay a salary during the period where the employee hits pause on their career,” he says.

On the other hand, those who take a micro-retirement are giving up both paid leave and guaranteed employment upon return, making it a much riskier pursuit.

Micro-retirement might also be associated with a lack of career ambition – especially for Gen Zs, who already contend with this stereotype. This distinguishes it from the gap year (where a young person takes a year off between school and university), which tends to be viewed much more positively.

“Most employers love it when they come across a candidate who has taken a gap year, because they see that you’ve got some life experience beyond your studies, which you then bring into the organisation,” Dr Mariappanadar says. “I don’t think the same can be said about a micro-retirement, because it’s mid-career and it can affect productivity and cause disruption in the workplace – and no employer wants that.”

The energy ceiling

If it is indeed true that younger employees are more likely to take self-financed career breaks than previous generations, it begs the question: why? Is it all to do with the shift in values and career priorities?

Dr Mariappanadar believes there’s more to it. His research has examined the ‘ceiling effect’ of human energy, which describes when an employee’s energy depletion reaches a tipping point at work, negatively affecting their wellbeing.

“Younger people come into the workforce with this idea that they’re superhuman, and hence, they love work intensification,” he says. “But as they progress through their career, they suddenly realise that they’re overworked. They start to experience burnout, and their job no longer provides the work-life balance that is so important to them.”

By the time this tipping point is reached, work has begun encroaching on non-work activities, like going to the gym, taking the dog for a walk, or spending time with friends and family.

“This creates anxiety, and the employee is now in a downward spiral of health and wellbeing. So, when this idea of a micro-retirement pops up while they’re scrolling on social media, they might think, ‘Oh, that’s exciting. Maybe I’ll consider it’.”

After all, who wouldn’t be tempted by the endless stream of sun-drenched social media pics featuring carefree micro-retirees? 

The problem, Dr Mariappanadar says, is that not many people have the means to take a career break without significant risk.

Micro-retirement, it seems, is a privilege of the few.

“Some people can easily afford to take a pause with no real worry, but for others, it’s more like taking a plunge – so it must be an informed choice,” he says.

“I’m not saying that micro-retirement is right or wrong, good or bad … but you must weigh up the benefits and the risks. Remember that you’ll eventually have to re-enter the workforce, and when that time comes, you may face challenges you hadn’t anticipated.”

ACU’s Dr Sugumar Mariappanadar is an internationally acclaimed researcher in the field of sustainable human resource management. He has published more than 50 research articles and authored the first international book on the topic.

Want to learn more about workplace trends? Study business at ACU.