June 20, 2024

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The ‘Big Stay’ isn’t going away as the labor market stops rewarding job hoppers, according to ADP payroll data

2 min read

The final death knell of the Great Resignation has rung. The latest data available from the Bureau of Labor Statistics shows that workers are now quitting their jobs at the same rate as in the six months that preceded the pandemic.

We are witnessing another shift in the post-pandemic labor market. For a while, workers were changing their jobs at rates well above historic levels. Now, they’re hunkering down and sticking with the same employer.

A deep inspection of ADP payroll data could provide an explanation for the Big Stay’s staying power: Workers who change jobs are no longer being rewarded with pay gains.

Job hopping isn’t what it used to be

Money was a key driving force behind the Great Resignation. Pay gains from switching jobs began to accelerate dramatically in the spring of 2021. By June 2022, the median year-over-year increase for job changers had hit a record 16.4 % as abundant job opportunities and labor shortages combined to deliver big pay bumps to workers who quit one job to take another.

Those gains now are slowing almost as rapidly as they accelerated. The ADP Research Institute, which tracks the pay of roughly 22 million workers nationwide, can distinguish between individuals who have been with the same employer for 12 months and those who have quit in the past year to start a new job. We’re able to compare the pay trends of both groups.

For job stayers, median annual pay growth reached a high of 7.8% in September 2022. Since then, median annual pay growth has fallen steadily, reaching 5.9% this past September, a 1.9 percentage point decline.

The ADP Pay Insights report tracks the trajectories of job changers whose previous and current employers both are ADP clients. For this group of job changers, the slowdown in pay gains has been even steeper.

After peaking at 16.4% in June 2022, median year-over-year pay gains for job switchers fell to 14.7% in January 2023. In September, the typical pay bump was 9%.

That…

Nela Richardson

2023-10-23 07:52:44

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