Job-hopping has lost its luster.
The median pay increase for workers switching jobs sank substantially to 4.8% last month from a pinnacle of 7.7% two years ago, according to recently released data from the Atlanta Fed.
While job changers tend to receive higher pay increases than job stayers, the gap between job stayers and those who switch roles has fizzled and is now at its lowest level in a decade. A worker who stayed put and received an annual raise saw nearly the same bump in pay — 4.6%, the Atlanta Fed found.
“The pendulum is swinging back from the pandemic premium for new hires,” Julia Pollak, chief economist at employment search site ZipRecruiter, told Yahoo Finance.
“The gap between wage growth for job switchers and job stayers ballooned to the widest gap on record during the Great Resignation,” she said. “Companies rushed to rehire after the pandemic, and the No. 1 focus was on hiring incentives — signing bonuses and raising starting pay.”
The problem is that many companies felt burned by offering huge salaries and bonuses to people who stayed only a short while and then left for better opportunities.
Now the focus is on longer-term retention incentives such as retirement and health insurance benefits that make workers want to stay, Pollak said.
Federal job cuts and layoffs by large companies are contributing to a chilly job market overall, flashing the warning signs that the golden era for job seekers has ground to a halt. A recent Harris Poll found that 7 in 10 Americans think it’s difficult to find a better position than the one they have now — and three-quarters say employers hold the power in the market.
“Hiring is so weak and unemployment durations are growing,” Pollak said. “Employers are opportunistically able to pick up great talents on the cheap.”
Talk about glum. A record-low 13% of job seekers described their search as going well, per the findings in a new ZipRecruiter report. Gloomier still — more than 6 in 10 job seekers reported zero job offers, the highest level in three years.
In 2022, wage growth contributed to people quitting their jobs for higher-paying options, Allison Shrivastava, an economist at the Indeed Hiring Lab, told Yahoo Finance.
“At that time, finding a new job was easy for most, and companies had to compete to hire workers. Now, that competition has greatly decreased,” she said. “This shift … has made leaving their current job for a new one less attractive.”
The data backs that up. Workers are staying in their current jobs, as seen with the low quits rate tracked by the Bureau of Labor Statistics — 2.1% or 3 million people quit in January.
