Changing jobs is looking lucrative again.
Base pay for job changers in the private sector increased 4.7% in August, compared to 3% for job stayers, according to the latest report from payroll provider ADP.
When you consider gross pay, which includes tips, commissions, and bonuses, wages for job stayers rose 4.4% year over year, while gross pay for job changers increased substantially more: 7.3%.
In another recent report, the job-jumping news was just as promising.
The median pay increase for workers switching jobs rose to 5% last month from 4.4% in July, according to new data from the Atlanta Fed. For those who stay put, the average pay increase was 3.6%, the same as in July.
“There is an opportunity to boost wages by changing jobs, even in this low-hire, low-fire jobs market,” ADP chief economist Nela Richardson said.
‘Every sector tells a different story’
Not all job changers will reap the same rewards.
“The real action is under the surface,” Richardson said. “Every sector tells a different story. For example, construction workers see the highest job changer pay. Employers would like to hire more people in construction and can’t find the workers, and wages are adjusting appropriately.”
Leisure and hospitality are the opposite. It’s the only sector that ADP tracks in which gross pay for job changers is lower than for job stayers. That sector, Richardson said, “rewards stability and loyalty over job changing.”
Read more: What to do when your pay raises aren’t keeping up with inflation
According to new Bank of America Institute data, workers who are paid by the hour and receive a weekly paycheck are getting the biggest pay bumps, along with Gen Z workers who are kicking off their careers at relatively low wages.
“We’re clearly seeing the pay incentive to switch jobs is strengthening, especially on the small business side of things,” Taylor Bowley, an economist at the Bank of America Institute, told Yahoo Finance. “For those people looking to change jobs, their bargaining power is definitely increasing.”
One key factor: a dearth of qualified applicants.
“A lot of businesses over the past several months have been reporting that they’re having a hard time filling positions because the applicants’ skills don’t match what they’re looking for,” Bowley added.
This reality has been playing out across the board this year. Nearly 70% of human resource professionals report challenges recruiting for full-time positions, according to a report by the Society for Human Resource Management.
