The pay premium for job-hopping is disappearing—switching roles nearly has nearly the same payoff as staying loyal to an employer

Workers have long been taught that job-hopping is the fastest way to rise through the ranks and secure big pay raises—but the career strategy has lost its edge. 

Professionals who switched jobs this January only got a median pay increase of around 4%, according to a recent Bank of America study. Meanwhile, those who stayed in their roles during the same period received a 3.5% wage bump, according to the Atlanta Fed’s Wage Growth Tracker. 

And the financial incentive for workers to take the leap to a new job has been steadily declining for years, as employees cling to their roles and hiring stagnates. 

“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,” the Bank of America report says. 

“This softening matters because job changing remains one of the most effective ways workers secure higher pay.”

Welcome to the ‘low-hire, low-fire’ economy

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. 

In 2023, the wage gain for job-hopping stood at around 9%, lowering to about 8% in 2024, and roughly 6% in 2025, according to the Bank of America report. 

Workers hoping that the tide of job-hopping gains will turn in their favor might be waiting a while; so long as employers continue to limit hiring and workers stay put in their jobs, the situation will only get worse. 

“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 report explains.

Job-hopping replaced company loyalty—and now, workers are ‘job-hugging’

Young workers earning rock-bottom salaries are known to job-hop in an effort to quickly climb the corporate totem pole. But Gen X and baby boomers were once promised that loyalty breeds success: by staying at one company for many years, they could prove their dedication, and have a better shot at bigger titles and salaries. But as benefits wane and promotions are clinched, leaving an employer for greener pastures became commonplace.

Around 75% of workers ditched their employer before even receiving a promotion, according to an ADP report on 2023 payroll data. And Gen Z in particular have adopted the strategy in recent years—about 83% of the young workers self-identified as “job-hoppers,” according to a 2023 report from ResumeLab. And up until recent years, it’s been paying off: in 2023, nearly one-third of Gen Z changed jobs, with 35% making the move explicitly to secure higher wages, according to an H&R Block report.

And despite how much employers might hate job-hopping, most professionals have been embracing it as a useful career tool. About 41% of workers in general think switching gigs every two to three years is acceptable, with 56% of Gen Zers believing the same, according to a 2024 report from Resume Genius. 

However, wage gains have become so marginal, and job openings have become so scant, that the popularity of job-hopping could lose traction. Just last month, American employers unexpectedly cut 92,000 roles, and the unemployment rate ticked up to 4.4%. Meanwhile, AI is automating human work at a dizzying pace; since ChatGPT’s rise, U.S. job postings fell by about 32%, according to a 2025 analysis of Federal Reserve data.

This story was originally featured on Fortune.com