You could miss out on an 8.5% raise if you don't join the Great Resignation and job-hop this year, new study finds
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- Job hoppers are seeing higher wage increases than those who stay at the same job.
- Job hoppers are also seeing their biggest median pay increase in more than 20 years.
- Raises are helping some workers keep afloat amid sky-high inflation.
More than a year into the "Great Resignation" — or as some call it, the "Great Reshuffle" — many Americans are continuing to leapfrog between companies as they search for fulfilling, flexible work.
At the very least, they're getting better pay.
That's according to a new study by the Federal Reserve Bank of Atlanta. The Fed researchers found that the gap in pay raises for those who switch jobs and those who remain at the same company is the widest it's been in decades. People who stayed at one job saw a median annual wage increase of 5.9% this past July, a slightly smaller amount than they saw in June, according to the Fed. In contrast, those who recently left their employer for a new one saw a median annual raise of 8.5% in July, up from 7.9% in June.
That's the biggest median pay increase for job hoppers in more than 20 years, according to the Fed researchers.
The data comes as historic inflation has offset the wage gains made by workers during the pandemic, although many lower-wage workers are still managing to outpace price hikes thanks to employer desperation. Despite that, the job market has cooled slightly in recent months, although many are still quitting in droves — more than 4 million Americans did so in July, according to the Bureau of Labor Statistics.
Lesley Labaraba, a human resources director at healthcare company Chopra Global, told Insider in March that she job-hopped her way to a 39% pay increase across three jobs over the past two years. Insider verified these numbers via pay stubs.
She described her year-end bonus as "significantly less" than she expected at the job she left in 2020, and is happy where she's landed.
"As all these boomers exit the market and it's filled with Gen Z people, you begin to see time as a commodity," she said, explaining that she thinks young people rising in the workplace value their time more than generations past, in addition to seeking fair compensation for their work.
'The first tool in the toolbox for employers is to raise wages and benefits'
The Fed study comes on the heels of similar data from ADP's monthly employment report last month.
ADP found that quitters' wages rose 16.1% in the year through August, outpacing job-keepers' 7.6% gain. That means that job changers' wage gains have roughly doubled that of their more stagnant peers through a majority of the pandemic, even tripling job-keepers' pay growth in some months, Insider's Ben Winck and Madison Hoff reported.
And that kind of pay growth has become necessary for employers to maintain worker interest, Daniel Zhao, senior economist at Glassdoor, told Insider's Juliana Kaplan and Madison Hoff in June.
"I would say that the first tool in the toolbox for employers is to raise wages and benefits," Zhao said. "That can mean quite simply just increasing pay overall or offering a bonus or expanding and experimenting with new benefits, like tuition reimbursement, for example, that's one that has become more popular over the last few years."
The ADP and Atlanta Fed data suggest that stronger-than-usual wage growth will persist in the coming months at the very least, before it returns to the pre-pandemic trend. That's a silver lining for Americans who are still struggling with the toll of inflation — plunging many back into the credit card debt they escaped during the pandemic — even as prohibitive costs like that of gas start to cool.