Job Hopping Is Officially Over?

Are the days of job hopping a thing of the past? If the latest economic data is any indicator, it seems like the good times may be coming to an end. If you're new here, my name is Brian, and I'm a corporate recruiter and an HR professional with over 20 years of experience interviewing and hiring thousands of people into some of the world's most well-known and well-respected companies. I've made it my mission to demystify how job search and careers work at corporations to give you a leg up on the competition, and if unlocking your true career potential interests you, you may want to consider signing up for my free webinar, How to Reclaim Control in Your Career. You can find it in the comments below. So the Wall Street Journal recently posted an article about job hopping and whether or not it's come to an end, and they've speculated that based on some of the employment data published by the Federal Reserve, that it's not really tracking very well for the average employee who has relied on this strategy. And let's define what job hopping truly is. It's jumping from job to job to job in a relatively short amount of time. And what that time frame is, is completely subjective and varies from company to company. But the key differentiator here is it's often at the same level. So if you're jumping from job A to job B to job C, all at the same level and not having any definitive progression in your career, that's what employers consider to be job hopping. And it's often given a bad rap by employers because they look at it as an indicator that you may not stick around very long. Kind of ironic considering they're happy to lay you off just as quickly and the double standard is real. But nonetheless, employees have used job hopping as a relatively successful strategy to move through salary bands relatively quickly, especially earlier in their careers. But the problem is, is that there's a point of diminishing returns. And after you move through the entry level salary ranges, you often slow down considerably in salary growth. And that's where the previous job hopping can start to bite people a little bit. Because suddenly you have to start defending yourself on your resume about why did you leave this job? Why did you leave that job? And employers tend to be pretty biased against it. Now, obviously, it's in our best interest to try to move through salary bands as quickly as we can to get into these higher rates of pay, especially given what's going on in the economy. And this strategy was certainly made very popular with the latest wave of employees entering into the workplace over the last four or five years, and in particular, at the height of the job market for job seekers, you know, somewhere around the 2021 to 2022 timeframe. And at this point in time, as you recall, the industry was going through a lot of rapid change. In 2020, we had massive layoffs and there's nobody hiring on the job market. But the job market came screaming back in 2021 and in particular in the tech market, where we saw roles like software developers suddenly becoming extremely hot. And certainly people who are early in their career benefited the most as they were able to move through these roles much quicker than was probably normal in the past. And as a result, they were able to get some pretty nice salary increases and you didn't have to stay in roles too terribly long in order to qualify for the next 10 or 15 or 20% bump. So you were kind of foolish not to do that. If you wanted to move through these salary bands as quickly as you could. And while it was predominantly contained to tech in the beginning, it did start to spill over into other industries as well. So a lot of people took advantage of job hopping in order to really improve their financial circumstances. And because the job market was so hot, it was of no surprise that we started to see things like the great resignation occurring with this rising phenomena of people walking away from viable careers because they got tired of it and they were ready for something different, but they knew that they could get a job relatively quickly and probably at a higher rate of pay. However, all good things come to an end. And we saw the market fall out from underneath us in 2023, heading into 2024 and all the way up till today. So those of us who are in the job market are noticing that it's particularly difficult to find a job right now. And in particular with jobs that pay well in the data that came out from the feds and the wall street journal reporting on it shows a very interesting trend of what's happening to wage growth for people who stick around versus people who jump ship. So let's take a look at it and see if we can determine whether or not job hopping is still a viable strategy to get ahead in your career, especially early on. So here's some of data that I found. This is from the federal reserve bank of Atlanta, where they published some wage surveys dating all the way back to 1997. And as you can see in this chart, you can see the percentage of wage growth that people are experiencing in their careers. And for the sake of this video, we're going to focus on column F here, which is the overall. So this is the percentages of wage growth during the period of time that it's measuring. This is by month. So we can see, you know, these numbers probably don't mean a whole lot to us overall, but when we start to put them into chart format, it actually starts to paint a more interesting picture. So that's what I did. I put the, put together a chart here tracking from 1997, all the way up to 2025 of overall wage growth and percentage. And as we can see in about 2000, mid two thousands, we had a pretty low dip. We were really not growing at all in wages and you can see a steady increase over time. And I wonder what happened right around this period of time where we see this massive uptick. Of course, this is during the great job market of 2022, 2023, where we saw massive increases in salary. In fact, probably the highest on at least tracking back to 1997. And you can see just how hot that job market was. And this is where driving the market up drastically by these bidding wars. In fact, if you're a senior software developer and in particular principal level engineers, you couldn't fall out your front door without landing on at least two or three better offers than you had yesterday. But of course, the good times come to an end. It only lasted for about a year and a half or so. And now we've been seeing a steady decrease in wage growth. And what is happening is, employers are really tightening up. And after 2023, employers have been actively trying to bring wages down much to the dismay of people who are still looking for jobs and who have gotten laid off. They're finding that the job market is much more difficult. Lowball offers are certainly much more of a thing and wages overall are just moving downward. We're not getting these huge raises anymore. And so that's what we're seeing on the overall. I wanted to also jump into the data though around people who stay in role and people who jump ship and whether or not that data is tracking with what we're talking about here. So let's head over to the Wall Street Journal. This is numbers coming again from the same data points, but it's just measured in a little different way. We can see on the blue line here, this is people who stay in jobs versus people who switch jobs. So job would be called job switchers or job hoppers. This is only dating back to 2022. So you can see this is corresponding with that big peak that we saw and then the gradual decline. So as you can see, being a job switcher back in January, 2022 resulted in a 4.7% increase versus somebody who stayed in role and only got a 3.7. You got to keep in mind at the same time we have inflation that was off the charts. So even at a 4.7, I even job switchers were still falling further and further behind based on the economy. So it certainly at that point made sense to try to make moves and try to jump ship because the amount of money that you would make as a job switcher started to decouple from being the job stayer. So if you looked at in January or June of 2022, 4.8% to stay, companies were realizing that they wanted to keep people on board so you could see how they were improving their wages as well. But it still made a lot more sense to jump ship because they just couldn't compete on the open market and bidding wars. And you saw 6.4% in June to be a job switcher. But if we go up to the peak of the market, which was October of 2022, this was like the peak of the job market. If you wanted to leave your role, November of 2022 was the best time to do it. And we saw a 7.7% average increase for somebody who switched jobs versus somebody who stayed in role was over 2% lower. And again, this is when companies were still trying to match and trying to retain staff. That was the big mantra at that point in time. But the job market, the wage market broke, it seems like sometime like May of 2023, which is starting to come down on the job switcher. But then the internal job market retaining people started to break as well around that period of time. So we saw the data start to switch a little bit sooner with job switchers versus job market. So the companies on the outside market realized like, hey, we're driving wages up too much for everybody, at least according to them. Again, for the job seeker, that's a great thing. But for these companies, what this ends up leading to is layoffs. That's the restructuring in those layoffs, those layoffs that we become so accustomed to, unfortunately, in today's market. And you started seeing a drastic decrease in the amount of wages that employers were willing to pay for job switchers and even retaining people. And as you're trying to quote unquote, reset the market, you're doing a lot of laying off and restructuring. And we saw a huge increase in the number of people who are applying for jobs at this point in time. This is where the job market went off the rails. It's been like whiplash versus bad, then it was really terrible, then it was amazing, and then it's been really bad ever since. And as you're seeing, when a company has a lot of options, they've got a lot of people to choose from, they can be much more selective and they can pay lower. It's the law of supply and demand. And as we're seeing over time into June 2024, the summer, basically back to the beginning of the January of 2025, 4.8% to switch versus 4.6% to stay. So the incentive for leaving jobs is just not there anymore. Now, it doesn't mean that you can't move up relatively quickly by a few select or strategic job hops, because it probably still is, especially if you came into a market lagger and you could potentially move up a little bit and maybe in salary, in particular, if you can move up in level, that's probably the more important one. But it doesn't seem like it's nearly as lucrative today as it was just a few short years ago. So I'm curious for those of you who are actively looking to hop jobs, is this still a viable strategy for you? Are you finding that high wages and hopping from job to job to job is working the way it was maybe a couple of years ago? I'd be curious if you could leave a comment and let me know just to get that extra data point. But that's what's happening in the job market right now. So now it seems like the new mantra for companies, at least over the last few quarters, is to retain the staff that they want to keep, become more efficient. And I kind of read into the utilization of AI and becoming more streamlined. And as part of that, the downsizing, the right sizing of what they'll call the right sizing. And that's where we are today. And I'm also curious, if you were somebody who was fortunate enough to catch the top end of the market, how has that worked out for you? Are you still there? Did they lay you off? Are you able to still parlay that into additional raises? Leave a comment, let me know. I'm really curious about that as well. So that's the data. And unfortunately it doesn't look great for people who are hoping to rely on job hopping as a viable strategy. But I don't want you leaving here feeling all dismayed because there are other ways that you can move through salary bands quickly and with more authority that don't rely on job hopping. And in particular, it's establishing a long-term career strategy and taking very calculated steps in your career. Of course, building up the skills that employers are demanding, knowing how to market them through resumes, through interviewing, through your networks and establishing yourself as a clear brand. And those are some of the things that you can do to propel your career forward, rather than just taking small incremental steps or staying at the same level through a series of hops. And again, if you're interested in learning more about how to do this, check out my free webinar. It's how to reclaim control in your career and your job search. In other words, how to act like the CEO of your career. So check it out in the comments below. Anyway, that's what's going on in the market. Appreciate you watching. We'll see you on the next one.