Switching Jobs for Better Pay Is Getting Harder
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Here's your money briefing for Wednesday, August 30th. I'm J.R. Whelan for The Wall Street Journal. Over the past few years, workers were able to get a big bump in pay and maybe even a sweet signing bonus just by leaving their job and joining a new company. Now, those big pay hikes are a lot harder to come by.
It just really shows how much the job market has flipped. Up till pretty recently, we were talking about the great resignation and all of the bargaining power that workers had.
We'll talk with our reporter Teping Chen about what job hunters can expect. That's after the break.
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Those steep pay raises companies have been offering to new hires for the past several years are coming back down to earth. Wall Street Journal reporter Teping Chen looked into this reversal of fortune, and she joins me now. So Teping, remind us, why were companies offering such hefty salaries and bonuses for new workers over the past couple of years?
Well, during the pandemic, we had a lot of disruption, obviously, in the labor market. And a lot of workers wound up sitting on the sidelines and companies really having to compete pretty fiercely in order to get folk through the door. This also happened to coincide with the time that a lot of companies need to hire quickly ramp back up after lockdown. The worst of the pandemic and these sorts of forces combining to really create a condition in which companies were doling out huge pay raises in order to sometimes poach workers or bring people off the sidelines. And it became a really intense bidding war, almost an auction mentality at times.
Yeah, it seemed like every week we were talking about the great resignation.
Yeah, absolutely.
What changed in the job market that led to big pay hikes for new hires during the pandemic?
So it was a time when we saw enormous raises being offered in many cases, huge signing bonuses and others and other perks like remote work, etc.
So why are many companies reversing course? And what kind of turnaround are we talking about?
Well, especially after we saw the layoffs really ripple through tech starting last year, a lot of companies across sectors have become much more cautious in their hiring. A lot of companies just looking around and sensing potential economic headwinds over the last few quarters and thinking, okay, well, we have to be more conservative here. Sometimes that looks like layoffs. And in other cases, as our story reports, it also looks like pay cuts for new hires.
Are some kinds of jobs seeing steeper drops than others?
We're seeing a lot of these declines happen, especially in professional services and in the tech sector. We are also seeing it across others as well. So certainly not exclusively something that's happening with professional jobs, but more concentrated there, I would say.
But are there industries where new workers are still being offered pay bumps?
There are. The government is one sector where and also nonprofits where we have seen some growth. It's not necessarily just industry specific that we're seeing. For certain really in demand roles in whatever industry, you're still seeing pay bumps. Absolutely. And for others, even in industries that are really struggling to hire or where we're seeing a lot of demand now, there are other roles that may be seeing pay cuts.
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