Job Seekers Hit Wall of Salary Deflation
It used to pay to switch jobs. Now it doesn’t.
The salary difference between those who stay in their roles and those who change jobs has collapsed to its lowest level in 10 years, according to the latest federal data.
Job stayers increased their wages by about 4.6% in January and February. Meanwhile, those who switched jobs received only slightly more at 4.8%. That gap has narrowed considerably since the start of 2023, when job switchers could fetch an average salary bump of 7.7%, compared with job stayers’ 5.5%.
“We’re not in a recession obviously, but things are not as good as before,” says Yongseok Shin, a professor of economics at Washington University in St. Louis. “People are responding by staying put.”
Keith Sims runs Indianapolis recruiting firm Integrity Resource Management and places teams of five to 40 people in software implementation with big companies such as Panasonic. Many offers are coming in low these days.
“We’re seeing wages be off from expectations most of the time,” he says.
Kim Vandrilla, 42, had been working as a creative director for a major consumer brand up until this past fall when she was laid off. She was making more than $200,000. During her job hunt, she is finding the same role listed for $140,000 to $160,000.
“And that’s at the high end of the range,” she says. “My first role as a creative director was for $175,000, and that was in 2017.”
Even in the tech industry, where not so long ago workers bounced around for big raises with ease, more people are hanging on to the job they have.
Workers who negotiated their salaries during the pandemic when the sector drove big pay increases, especially at high-growth tech firms, aren’t likely to find a new job for more money than they are already making.
“There’s little incentive for those folks to go out and look for a new job,” says Zuhayeer Musa, co-founder of Levels.fyi, a platform for salary data.
In the second half of 2024, median pay decreased between 1% and 2% for several roles, including software engineers, product designers and technical program managers, according to Levels.fyi data. Bumps in pay were reserved for certain high-demand employees such as hardware engineers and data scientists.
“There’s two sides to this market depending on whether you’re in AI or not,” Musa says.
Senior and midlevel leaders in tech face the most pronounced pay drops of between $10,000 and $40,000 a year, says Michael Butts, chief executive of Burtch Works, a staffing company that tracks compensation for executives and white-collar professionals around the U.S.
Even in artificial intelligence, managers overseeing machine-learning teams have seen compensation shrink by $10,000 to $20,000 a year as companies focus on hiring practitioners over leaders.
Josh Vogel was working as a director of customer success for a company that makes golf simulators when he was laid off in October. He spent five months job hunting and submitted his résumé to 2,500 positions using AI to populate the application fields. Vogel found during interviews that companies seem to be looking for the so-called perfect candidate—somebody who checks every single box.
“During the Covid era, I experienced a lot of career hypergrowth,” he says. “That seems to be getting course corrected.”
And wiggle room when it comes to salary negotiations? Gone. If the role is advertised as $100,000, that’s what it pays. Vogel recently accepted a job as a customer success manager for a benefits technology firm. He is making $120,000 a year, which is $50,000 less than his former role and his overall compensation is even lower once he takes into account the annual bonus he used to get.
“No one is paying what they used to,” he says. “If you don’t like it, there’s 50 people behind you they’re going to call right afterward.”
‘Things can change on a dime’
As higher-paying roles become rarer and layoffs continue to ripple through the workforce, fewer people are quitting. The number of American workers who quit their jobs last year hit the lowest level since 2020, federal data show, and some economists expect even fewer people to quit in 2025.
“People are still getting laid off, and I’m not sure that firms are putting a whole lot of budget into replacement salaries,” says David Ellis, a senior vice president at Korn Ferry, an organizational consulting firm.
Meanwhile many internal job changes amount to a “dry promotion”—one that comes with a bigger title and more responsibility but without the money to match—because companies are dialing down what they earmark for raises. This year’s average projected raise for employees who stay in their jobs is 3.7%, down from 4% last year and 4.4% in 2023, according to Willis Towers Watson, a workplace advisory firm.
One bright spot: finance. Over the past six months, most senior-level candidates that executive recruiter Paul Sorbera has worked with have been able to command a bigger salary when changing jobs.
“Some of the banks had record earnings. They’re doing pretty well,” says Sorbera, president of executive search firm Alliance Consulting. “When they make money, they go out and spend money.”
For finance-job candidates with five or more years of experience, Sorbera has seen some aggressive hiring and found healthy competition among large banks. Still, he cautions, “One thing that happens on Wall Street is these things can change on a dime.”
Credit: Katherine Bindley








