The Great Hesitation: Job Switching Slows from Pandemic-Era Highs

The Great Resignation may be cooling, but the job market remains complex. While lower earners see wage gains, higher earners are hesitant to switch jobs. Employers struggling to fill roles should consider proactive recruiting strategies.

Back during the initial period following the first reductions in COVID-era mandatory lockdowns, businesses were still scrambling to adapt to the “new normal” in business, defined by a world of remote work and burgeoning technologies like in-store pickup and delivery. Meanwhile, the COVID pandemic itself (which began nearly half a decade ago, as hard as it is to believe) brought forth large-scale cultural transformations throughout society, many of which are ongoing and/or are still felt to this day. For one, lockdowns necessitated that families and parents with children attend to their children throughout the day as they remotely attended school over the Internet, which was an unprecedented shift for many and drew far more time and energy from these adults, causing some to drop out of the labor market altogether. Others reflected on their priorities during their time spent in quarantine and decided to “downshift” their lifestyles, making do with less by quitting their job to live on a fixed income (which in many cases may have also been supplemented with forms of Government aid such as the COVID Stimulus payments and/or unemployment insurance).

Others still — such as essential workers — may have felt insufficiently valued within their existing roles and were able to leverage their government stimulus funds towards activities such as entrepreneurship and/or education in hopes of landing a more fulfilling/lucrative career. All of these factors taken together, the labor market became substantially tighter as people from across the workforce resigned or reduced their hours, leaving businesses in a panicked state to fill gaps in order to maintain operations. Consequently, employers found themselves needing to make amends they wouldn’t have earlier considered, such as offering higher salaries and/or benefits, such as allowing staff to work fully remote, even following the rollback of quarantine mandates. During this period of time, it’d be fairly safe to say that the shift of power in the world of staffing flowed from employers themselves to jobseekers, who were able to take advantage of a hot hiring market to switch employers for higher salaries and more benefits at a time when more people were leaving the market entirely.

As the years passed following the initial COVID outbreak, it appears that many employers were eventually able to secure the workers they needed to continue with operations at a normal level. As a result of this, it appears that the rate of job-hopping has seen a decline since then, as according to data and analysis from Bank of America Institute, a trend they’ve dubbed “The Great Hesitation”. According to the bank’s analysis of their personal and business customers’ financial activity, the rate of raises decline from the rate during the throes of The Great Resignation, even though national employment still remains low in the US, relatively speaking from a historical standpoint.

Intriguingly, according to Bank of America’s customer data, gains made by income earners within the lowest income bracket (earning under $50k annually) have seen the highest income gains through job-to-job migration (J2J), i.e. job-switching. This would suggest that lower-earners have been more successful than their higher-earning peers of late in securing pay-raises over the past few years, which does appear to suggest that individuals within lower-paying positions have more leverage for higher wages than in the past. All this having been said, J2J movement has remained at a higher level than in 2019 (before the pandemic), and therefore shows signs that the economy remains strong and unemployment rates within the United States remain low, even though job-switching behavior is down somewhat, particularly among higher-earners.

For employers who are still seeking to build out their ranks with new hires — bucking the overall trend, given the recent decline in hiring and job switching among employees — companies will likely need to go beyond seeking out passive hires and take a more proactive approach towards talent acquisition. In a hiring market where professionals are generally more hesitant to switch jobs, it is of upmost importance to seek out qualified hires using an active approach. Utilizing a skilled team of specialized recruiters, such as the team at New York Technology Partners, is one such method. By utilizing a recruiting firm (such as NYTP), one has access to a filtered pool of candidates that one may not otherwise locate. Moreover, by using a staffing firm, companies have the ability to consult with specialists who have their boots on the ground, surveying hiring trends within the industry firsthand, providing additional insights for your hiring efforts. Feel free to give us a call at (585) 300–4720 from 9 a.m. to 5 p.m. EST, Monday through Friday.