More Americans are job-hugging as switching employers doesn't pay like it used to

More Americans are job-hugging as switching employers doesn't pay like it used to

Long gone are the days of the Great Resignation. America’s labor market is increasingly in “hire less, fire more” mode — a subtle shift from the "hire less, fire less" pattern seen over the summer — and it’s weighing on those considering a job change.

The “fire more” part of that trend is showing up at some of America’s biggest employers, with Amazon, UPS, and Target all recently announcing staff cuts — as US layoffs hit their highest October level since 2003. In the same month, the hiring rate for unemployed workers fell to a 4-year low, per the Chicago Fed.

Don’t quit your day job

As companies shrink their teams, job-hopping has given way to a lot more job-hugging, with workers resisting the pull of a new post. One sign is the quits rate, a proxy for workers’ willingness to leave jobs. Since peaking at 3% in early 2022, the rate has steadily dropped to 1.9% as of August — the lowest level since 2015, outside the pandemic shock.

And that stay-put mood seems likely to persist: employees are more likely than ever to stick with their current jobs over the next six months, according to Eagle Hill Consulting’s Employee Retention Index, which hit a record high in Q3. Several factors nudged the index higher — such as stronger confidence in leadership and dimmer views of the job market — but the biggest lift came from workers feeling more satisfied about their current pay and its growth potential.

That instinct is spot on: switching jobs isn’t as lucrative as it used to be.

Per Atlanta Fed data, people who have switched jobs have historically seen faster wage growth than those who stayed put — a premium that’s averaged roughly 1% over the last decade. Now, that gap has all but evaporated, with the premium shrinking to just 0.1% in August, the smallest since 2010.