Job hopping for better wages no longer pays off the way it used to, ADP analysis says

Once upon a time (a few years ago), if you wanted to rapidly increase your salary, the best way to do it was “job hopping”: bouncing up the career ladder to leverage better pay and benefits. This is a particularly effective tactic when the labor market is tight, such as during the COVID pandemic, because employers are willing to stretch themselves for the talent they need.

In 2026, that’s no longer the case. Economists have been picking over the low-hire, low-fire jobs market for the best part of a year, and it appears that the job-hopping hack is unwinding.

ADP’s latest data suggests that there are now only a couple of industries where competition between employers results in better pay: industries where demand for skilled labor outweighs supply. A pay trends report shared with Fortune yesterday from the private payroll company showed that in January, year-over-year pay growth for job-hoppers slowed to 6.4%, down from 6.6% in December.

For job-stayers, their pay growth held steady at 4.5%, where it has sat for the best part of the past year.

The gap between job-stayers and job-hoppers (analysed by tracking high-frequency payroll reporting for the same cohort of workers over 12-month intervals to compute each individual’s year-over-year change in gross pay, including base salary, bonuses, and tips) has been shrinking, particularly since this summer, and hasn’t been so close since November 2020. As of January, the difference in pay growth between switchers and stayers is just 1.9%.

The growth between job-stayers and those who jumped ship was highest in sectors with in-demand skills: construction, and natural resources, and mining. These sectors saw job-hopper growth of 6.6% and 5.6% compared to job-stayers, respectively.

This was followed by financial activities and manufacturing, where job hoppers got a boost of approximately 3% compared to those who stayed in their roles (who also saw a YoY raise, irrespective).

In service roles, gains were fractional, up only 0.6% to move; and in education and healthcare, as well as trade, transportation, and utilities, gains were marginal: Just a 1.6% increase to move.

In some roles, it actually pays to stick with the same employer. In leisure and hospitality and IT, workers who stayed in their roles actually saw their salaries fare better than those who left. The difference in wage growth between hoppers and stayers was -2.5% and -0.6% respectively, in these categories.

ADP’s data, overall, plays to the labor market narrative economists had seen in the data right up until the latest jobs report. Despite January’s jobs report coming in ahead of expectations, adding 130,000 roles, many economists still believe slow-hire, slow-fire is the base case.

RSM Chief Economist Joe Brusuelas wrote last week: “There are several reasons why hiring has slowed: Changing demographics, tight immigration policies, the end of labor hoarding and a pause in hiring as productivity improves. In the near term, there is no reason that these factors will change. But it is growing equally clear that gross domestic product is in the process of decoupling from hiring.

“While GDP provides strong insight into production, construction and investment, it does not always tell us how we live now. Slower job growth makes it more difficult to find a similar job at higher wages and adds to the very real affordability crisis that many households face.”

Working less

The ADP report, penned by the organisation’s chief economist Dr Nela Richardson, also suggests people are working less than they used to. Richardson writes: “On average, employees are working an hour less each week than they did before the pandemic. Although January showed a modest year-over-year increase in hours worked, levels remained near a seven-year low.” The average working week, per the ADP data, is now 33.6 hours a week compared to 34.7 hours in January 2023.

Some of this may be due to the fact that more people are now working part-time, with a greater proportion of U.S. workers working less than the full working week of 35 hours. “In 2025 and 2026, the share of people working part-time was about 45%, 6 percentage points more than in 2019,” Richardson noted.

One factor potentially contributing to this shift is the age of the U.S. population: The median age of workers has steadily increased from 40.5 in 2004 to 41.7 in 2024, according to the Bureau of Labor Statistics. While this is still comfortably ahead of the retirement age, it exemplifies the broader shift the labor force will experience in the coming years.

Research from the Population Reference Bureau found the number of Americans aged 65 and older is projected to increase from 58 million in 2022 to 82 million by 2050 (a 42% increase), and the 65-and-older age group’s share of the total population is projected to rise from 17% to 23%. This has knock-on impacts on retirement, or those who want to work less but still earn, with studies from the likes of Pew Research showing boomers are participating in the workforce at levels not seen for generations.

This story was originally featured on Fortune.com