ADP Analysis: Job Hopping for Higher Pay No Longer as Effective

In recent years, a common strategy for quickly boosting one’s salary was “job hopping,” which involved moving between positions to secure better pay and benefits. This tactic was particularly effective in a tight labor market, such as during the COVID-19 pandemic, when employers were more inclined to make concessions to attract necessary talent.

However, this trend has shifted. The labor market has been characterized by slower hiring and fewer layoffs for about a year, and the effectiveness of job hopping as a salary advancement strategy appears to be diminishing.

Recent data from ADP indicates that only a few industries continue to see significant pay competition among employers, specifically those where the demand for skilled workers outstrips the available supply. A pay trends report shared with [Publication Name] from the private payroll company revealed that in January, year-over-year pay growth for job switchers decreased to 6.4%, down from 6.6% in December.

For employees who remained with their current employers, pay growth remained stable at 4.5%, a rate that has persisted for most of the past year.

The disparity in pay growth between job-stayers and job-hoppers, which is calculated by analyzing high-frequency payroll data for the same group of workers over 12-month periods to determine individual year-over-year changes in gross pay (including base salary, bonuses, and tips), has been narrowing, particularly since the summer. This gap has not been this small since November 2020. As of January, the difference in pay growth between those who switched jobs and those who stayed is only 1.9%.

The most significant pay increases for job-stayers compared to those who switched roles were observed in sectors with high demand for specific skills, such as construction, and natural resources and mining. In these sectors, job-hoppers saw pay growth of 6.6% and 5.6% respectively, compared to job-stayers.

Following these were financial activities and manufacturing, where job switchers experienced an approximate 3% pay increase compared to their counterparts who remained in their positions (who also saw year-over-year raises).

In service roles, the gains for job switchers were minimal, at only 0.6% more than stayers. In education and healthcare, as well as trade, transportation, and utilities, the increases were marginal, with job switchers seeing just a 1.6% higher pay increase than those who stayed.

In some sectors, remaining with the same employer actually resulted in better wage growth. In leisure and hospitality and IT, workers who stayed in their roles saw their salaries increase more than those who left. The difference in wage growth between job-hoppers and job-stayers was -2.5% and -0.6% respectively in these categories, indicating that staying put was more financially beneficial.

Overall, ADP’s data aligns with the labor market narrative that economists have observed, even in light of the latest jobs report. Despite January’s jobs report exceeding expectations with the addition of 130,000 roles, many economists still anticipate a “slow-hire, slow-fire” environment as the prevailing condition.

Joe Brusuelas, Chief Economist at RSM, stated: “There are several reasons why hiring has slowed: Changing demographics, tight immigration policies, the end of labor hoarding and a pause in hiring as productivity improves. In the near term, there is no reason that these factors will change. But it is growing equally clear that gross domestic product is in the process of decoupling from hiring.”

“While GDP provides strong insight into production, construction and investment, it does not always tell us how we live now. Slower job growth makes it more difficult to find a similar job at higher wages and adds to the very real affordability crisis that many households face.”

Working less

The ADP report, authored by the organization’s chief economist Dr. Nela Richardson, also suggests a trend of reduced working hours. Richardson noted: “On average, employees are working an hour less each week than they did before the pandemic. Although January showed a modest year-over-year increase in hours worked, levels remained near a seven-year low.” The average work week, according to ADP data, is now 33.6 hours, compared to 34.7 hours in January 2023.

This reduction in hours may be partly attributed to an increase in part-time employment, with a larger proportion of U.S. workers now working fewer than the standard 35-hour work week. “In 2025 and 2026, the share of people working part-time was about 45%, 6 percentage points more than in 2019,” Richardson observed.

One factor potentially contributing to this shift is the aging U.S. population. The median age of workers has steadily risen from 40.5 in 2004 to 41.7 in 2024, according to [Source Name]. While this age is still well below retirement age, it reflects a broader demographic transformation occurring within the labor force.

Research from the Population Reference Bureau projects that the number of Americans aged 65 and older will increase from 58 million in 2022 to 82 million by 2050, a 42% rise. Consequently, the share of the total population in this age group is expected to grow from 17% to 23%. This demographic shift has implications for retirement and for individuals who wish to work fewer hours while still earning income. Studies from organizations like [Organization Name] indicate that baby boomers are participating in the workforce at levels not seen in generations.