"With fewer open roles, the job‑change premium-the extra pay boost workers typically receive when they switch jobs-has started to compress across the board. This softening matters because job changing remains one of the most effective ways workers secure higher pay."
"The pay bump for job-hoppers in January is less than a third of the post-pandemic peak of roughly 14% in 2022, when businesses were hiring workers in droves. Over the years since, companies have whittled down their supersized workforces and reeled back hiring, flattening the pay bumps for switching roles."
"Looking ahead, if 'low-hire, low-fire' continues to characterize the labor market, the job‑change premium could compress further, limiting the extent to which workers can secure meaningful pay bumps by switching roles."
The traditional career strategy of job-hopping to secure rapid pay increases has significantly diminished in effectiveness. Workers who switched jobs in January received only a 4% median pay increase compared to 3.5% for those who remained in their positions. This represents a dramatic decline from the post-pandemic peak of 14% in 2022. The compression of job-change premiums stems from reduced hiring and workforce contraction by employers. As companies maintain 'low-hire, low-fire' practices, the financial incentive for workers to change jobs continues declining, with job-hopping wage gains dropping from 9% in 2023 to 8% in 2024 and 6% in 2025. This trend suggests the job-change premium will continue compressing, limiting workers' ability to secure meaningful pay increases through job switching.
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