Why Job Hopping Isn't Paying As Much As It Used To
Switching jobs has been one of the most popular ways to get a raise. The Great Resignation during the pandemic saw millions of employees quit their jobs for opportunities that paid better and encouraged work-life balance. However, it's not the case anymore. Job hopping isn't as lucrative as it used be.
According to an analysis by the Bank Of America, as reported by CBS, there's a slowdown in the rate of job hopping as workers are getting little to no benefits from switching organizations.
People once got at least 10% jump from moving to a new company. "Then, when the Great Resignation was in full swing this appears to have risen to 20%. But as of April 2023, pay raises moderated to 13%," the analysts wrote.
While a part of the drop is being attributed to inflation, a weaker labor market in which workers have less power to negotiate as compared to earlier.
The Labor Department in the US reported last week that the rate of workers leaving their jobs has fallen to a two-year low.
Should You Make a Switch?
If you have been contemplating for a while now and there is a strong reason behind it, go ahead and switch. However, if you are absolutely content in your current job, then it's not the best time to change your job just to get a raise.
What is The Big Stay 2023?
According to the ADP Research Institute, the rate of Americans leaving their jobs is significantly dropping.
"The Big Quit of 2022 could be easing into the Big Stay of 2023," wrote Nela Richardson, ADP chief economist, in her research institute data report.
The reluctance of the employees towards leaving their jobs has been dubbed "The Big Stay." A confluence of geopolitical reasons and internal economic events has caused the companies to adopt cost-cutting measures. In these circumstances, employees are now exercising caution. Another contributing factor to this phenomenon is the rise in interest rates for the 10th consecutive time to try and dampen inflation. When these rates rise so do the taxes on households and companies, tightening the belt even further.
Wage Gains From Job Switch Lower In April
The ADP data shows that those who switched jobs in April got a pay hike that was 7% less as compared to those who switched in March.
“If you’re a worker, it’s obviously not a good thing if your wages aren’t as high,” the data report read.
However according to Richardson, it's a good sign on a macro level. "The fact that pay gains are decelerating means that demand and supply are coming into better balance," she said.
"This is the best report you could possibly hope for from the private sector — strong job gains, moderating wage growth," Richardson said. "That’s good news for both [gross domestic product] growth and good news for moderating inflation."
How Much Job Hopping Is Too Much Job Hopping?
According to research by CareerBuilder, an employment site, GenZs spend an average of 2 years and 3 months in one organization whereas millennials stay for 2 years and 9 months. While there are many perks of job hopping, one must consider that it comes with its own set of drawbacks. You must take into consideration these things before hopping again and again.
You Got To Face The Loyalty Test: Starting in a new organization means that you have to start afresh. This means needing to prove your loyalty. So, ask yourself, "Are you ready to be tested once again?"
The Toll on Mental Well-being: We are a creature of routine, and frequent changes can take a toll on us.
