More Workers Want to Change Jobs but Now Face Tougher Odds

American workers are getting restless in their jobs just as the labor market is making it much tougher for them to jump to something new.

Millions of workers switched jobs during the past couple of years, enticed by abundant openings and big pay raises from companies desperate to hire. The market for salaried, white-collar jobs has since cooled, but workers’ itchiness to find new work hasn’t. Roughly 85% of 1,000 U.S. professionals polled in a new LinkedIn survey say they are thinking about changing jobs this year, up from 67% a year earlier.

Those who are actually job hunting—versus those who might be venting their work frustrations—are discovering that they have less leverage than in the recent past. Companies are offering new hires less-generous pay and flexibility than they did a year or two ago, data from job boards suggest. They are also holding the line in negotiations over perks such as additional vacation time, applicants say.

That is, for the people able to score an offer. While the market for hourly jobs remains robust, the number of listings for finance, marketing, software development and other white-collar fields has fallen below prepandemic levels, according to data from the jobs site Indeed. On LinkedIn, one job opening is available for every two applicants. A year ago, jobs outnumbered applicants two to one.

The upshot? Plenty of workers feel stuck, and that is helping to fuel job dissatisfaction. Many continue to wrestle with questions of work-life balance and have watched recent pay raises be eclipsed by inflation. Meanwhile, bosses are calling on them to do more with less. The latest Gallup survey research shows that the share of U.S. workers who say they felt engaged in their jobs slipped in the second half of 2023 after a slight rebound in the first half.

“The pendulum has swung back, and the power is in the hands of the hiring managers,” says Catherine Fisher, a LinkedIn vice president who tracks job trends.

Smaller pay offers

A spate of layoffs has sent some workers already on the hunt. Sarah Sterner, 30, was still getting used to her job as an educational coursework designer when, several months after being hired, her position was cut in a layoff in November.

More than 350 applications and 18 interviews later, she is still looking for another job. She says she received one offer, for a position advertised for $17,000 less than what she previously earned. She got the company to raise its pay offer by $8,000. But when it wouldn’t budge on her request for more than two weeks of paid time off, she decided to walk away.

“That was a pump-the-brakes moment for me,” Sterner says. Her two previous job searches, in 2021 and early 2023, were easier. “From start of search to offer took six weeks both times,” she says.

The pay premium for a new job is thinning across the U.S. workforce. People who switched jobs in August 2022 were rewarded with an average 8.4% pay bump for making the move, around 3 percentage points more than those who stayed in their jobs, according to wage-tracking data from the Federal Reserve Bank of Atlanta. By last month, the average raise that came with switching jobs was 5.7%, compared with 4.9% for workers who stayed put.

The shrinking raises reflect companies’ growing leverage in hiring decisions now that many have paused recruiting sprees and, in some cases, initiated new layoff rounds, says John Robertson, senior policy adviser and economist at the Atlanta Fed.

The need to be strategic

Some economists are optimistic the hiring environment will improve for white-collar roles in the coming year if interest rates fall.

In that case “you’ll probably have a lot of companies that feel comfortable hiring and investing all at once,” says Julia Pollak, chief economist at the online employment marketplace ZipRecruiter. April to August is typically a relatively strong hiring season, she adds.

Economists surveyed this month by The Wall Street Journal forecast hiring to average 64,000 a month this year, less than a third of the average in 2023. They expected the professional-services and the high tech information sectors to be among the slowest growing fields. Meanwhile, some executives and analysts predict that companies will continue to scrutinize corporate roles as artificial intelligence transforms and takes over some knowledge workers’ tasks.

For now, job seekers need to be strategic, says LinkedIn’s Fisher. That means making networking part of the daily routine and re-evaluating skills that might transfer nicely to new job categories.

Younger workers are especially eager to switch jobs, the LinkedIn survey data show. About 90% of Gen Z workers—now in their early and mid-20s—and 92% of millennials say they are considering a job change this year, compared with 83% of Gen X workers and 48% of baby boomers.

Some early-career professionals have no choice but to look for a new job. Peyton Nibblett, 23, says he is willing to take a pay cut after being laid off after less than a year from a $75,000-a-year position at an executive-search firm. Since then, the 2022 Northwestern University graduate has sent more than 1,700 applications to companies hiring entry-level analysts, with no luck.

After months of fruitless job searching, he moved back in with his parents in the Roanoke, Va., area in November. He says he worries that his lack of work experience puts him at a disadvantage.