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- In August, the rate at which US employees resigned reached its lowest point since 2015, aside from a brief decline in April 2020.
- A slowdown in hiring across the nation has resulted in fewer opportunities for those looking to switch jobs.
- This trend is complicating efforts for many workers to secure raises and promotions.
During 2021 and 2022, American workers left their positions at unprecedented rates—the highest recorded since tracking began in 2000. Many who made this leap were rewarded with salary increases, promotions, and benefits such as tuition reimbursement.
However, circumstances have shifted dramatically. Those resigning today must navigate the repercussions on their earnings and career trajectories. In August, US employees quit their jobs at a rate not seen since 2015 (excluding pandemic-related fluctuations).
The declining quits rate is not indicative of an overall increase in job satisfaction or compensation among workers.
“The ongoing decrease in quit rates correlates directly with a reduction in hiring,” stated Kory Kantenga, head of economics for LinkedIn Americas, during an interview with Business Insider.
Job seekers are now contending with a far more competitive employment landscape than they faced two years ago. Excluding the temporary dip during the pandemic’s early months of 2020, hiring rates across US businesses have plummeted to levels last seen nearly a decade ago—specifically since 2013. According to LinkedIn’s statistics, applicants per available position have surged from an average of 1.5 last year to approximately 2.5 this year. Contributing factors include recent interest-rate hikes by the Federal Reserve aimed at curbing inflation—one reason behind this hiring slowdown that is making it increasingly difficult for dissatisfied employees to find new roles while also hindering one of Americans’ most effective routes toward increased salaries and career growth.
“While leaving one’s job often carries negative implications, it plays a crucial role in advancing careers and enhancing personal income,” remarked Cory Stahle from Indeed during his discussion with Business Insider.
The Challenge of Securing Raises or Promotions
Stahle noted that individuals who change jobs typically experience greater wage growth compared to those who remain stagnant within their current positions—and that reduced quitting activity could lead to “smaller pay increases overall.”
Nevertheless, due to decreased hiring activity making transitions less lucrative than before, there has been a noticeable narrowing of wage growth disparities between those switching jobs versus those staying put since early this year.
The downturn in quitting has also hindered some individuals’ ability to progress within their careers. When someone departs from their position it can create openings that may be filled through internal promotions—a process currently stunted by lower turnover rates. A recent survey conducted by Mercer revealed that companies anticipate promoting only about eight percent of staff members this year—a decline from ten percent observed previously.
Additonally, diminished resignation rates have allowed certain organizations greater leeway when scaling back employee benefits like remote work options. For instance: Employees unhappy about mandatory office returns may feel compelled to accept these changes if alternative employment opportunities are scarce.
“A reduction in resignations shifts power back towards employers while decreasing incentives for them to enhance retention strategies through salary increments or flexible working conditions,” Kantenga explained further adding “Many firms no longer need compete vigorously for specific talent given improved retention.”
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Certain indicators suggest many Americans currently enjoy satisfactory work conditions without any intention of leaving their roles behind: A survey conducted last November involving nearly seventeen hundred working adults found that over sixty-two percent expressed contentment regarding their jobs.
Moreover, switching jobs doesn’t always guarantee success , as numerous individuals manage successfully attaining desired salaries or advancements without needing relocation.
For companies themselves higher employee retention can lead positively impact productivity levels too!.
Looking Ahead: What’s Next?
Kantenga along with Stahle remain uncertain regarding when we might see an uptick again within quit rates—or when employees will regain leverage necessary push forward demanding better wages/promotions moving forward into future economic climates where Fed begins cutting interest rates soon enough alongside optimistic forecasts suggesting potential avoidance near-term recessions could eventually stimulate business recruitment once more.
However should trends continue downward further still then transitioning between roles may become even tougher going ahead.
“Should we observe continued declines amidst prevailing economic pressures such as stringent monetary policies then expect corresponding drops amongst quitting behaviors too,” Kantenga concluded.
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