Why job hopping might no longer pay
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For years, job hopping was the surest path to a hefty raise.
- Not anymore — now, pay raises for those who switch employers are the same as for those who stick around.
Why it matters: The slowing job market — particularly for professionals — is giving employers the upper hand on pay, a new Bank of America Institute report points out.
- "The balance of power is shifting back towards firms that are hiring," the report states.
- There's also been a tariff-related pullback, with employers pressing pause on hiring.
How it works: Switching jobs is defined as having a different occupation from a year ago, or changing one's employer or job duties in the past three months.
By the numbers: The switchers saw a 4.3% average wage increase in July — the same as for those who stayed put, per government data cited in the report.
The big picture: Since 2010, job switchers always had the pay raise edge over the loyal job stayers.
- The gap between the two surged during the so-called Great Resignation, when the labor market boomed and job hopping was prevalent.
Yes, but: Internal data from Bank of America, which looks at a narrower dataset, found that that the median pay raise for a job mover was 7% — higher than the federal data indicated.
- Still, at the height of the Great Resignation in 2022, raises exceeded 20%, per the BofA data.
The bottom line: As The Economist recently mused, it may be time to log off LinkedIn and focus on impressing the higher-ups.
Go deeper: With labor market weak, employees are "job hugging"
