Job-hopping yields lower pay increases for workers

Job-hopping is becoming less appealing to workers. Recent data from the Atlanta Fed shows that the typical pay raise for those switching jobs dropped to 4.8% last month, down from 7.7% two years ago. The difference in wage growth between job switchers and job stayers has narrowed significantly, reaching its lowest point in ten years. Job stayers received a nearly equal salary increase of 4.6%. Experts believe this change marks a shift away from the pandemic's hiring incentives, such as signing bonuses. Companies are now focusing on retaining employees through long-term benefits like retirement and health insurance. This adjustment comes as federal layoffs and job cuts in large companies create a colder job market. Most Americans feel finding better job opportunities is tough, with 70% believing employers currently hold the upper hand in hiring. The job market's cooling is reflected in a low number of job seekers reporting success in their searches. A record-low 13% of job seekers report their job search is going well, and over 60% have received no job offers. In 2022, higher wages often prompted people to leave jobs, but that trend has changed. Fewer workers are quitting, indicated by a quit rate of only 2.1% in January. Confusion about the job market and future job prospects is causing both workers and companies to hesitate before making moves, further contributing to the job market's stagnation. Despite the gloomy outlook, some workers have found better-suited jobs in the past year. Many are transitioning to new careers, often taking pay cuts initially. While only about 30% of job seekers want to switch industries, more than half of new hires are in different fields. Career coaches emphasize that money isn't the only reason for job changes. Many look for opportunities for professional growth or a better fit in their roles. They advise job seekers to clarify what they want in their next positions before starting their search.