One of the main drivers of the “Great Resignation” that saw more than 50 million Americans quit their jobs in 2022 was the fact that labor was in short supply, resulting in higher wages being offered by employers who struggled to fill open positions. Switching jobs quite simply paid off, as workers were able to land significantly higher salaries by putting themselves back on the market instead of sticking with their old employer.
According to ADP Pay Insights, which is based on payroll transaction data from almost 10 million employees in the United States, the median year-over-year increase in annual pay for job switchers was above 15 percent for the most part of 2022. For people staying in their current jobs, the average pay increase was significantly lower, between 7 and 8 percent, or roughly half of the pay rises job switchers were getting.
Over the past two and a half years, the labor market has cooled significantly though, with job openings coming down from historically high levels and fewer positions remaining unfilled across industries. As labor supply and demand gradually came back into balance, wage growth naturally slowed down. According to ADP, that slowdown has been steeper for job changers, though, resulting in a smaller gap between pay increases of job switchers and job stayers. While there was an 8.4 percentage point chasm between the two in April 2022, the difference in median pay increases has narrowed to 1.9 percentage points by March 2025.
At the same time, and partly because of this trend, the number of Americans quitting their jobs has come down notably as well, putting an end to the “Great Resignation”, one of the more surprising post-pandemic labor market trends.