Is it still a good time to change jobs?
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Key Takeaways
- Jobs were plentiful last year, and finding new jobs resulted in higher wages for workers.
- But the U.S. economy is on the brink of a possible recession, leaving some workers hesitant to look for other jobs.
- If you're looking for trade or service positions, you may still have an opportunity for better pay and possible job security, experts say. But how you change things is really different in every situation.
In early 2022, Grace Spencer was working as a digital content coordinator for a children's craft company in New Jersey. He had been there for a year and a half and planned to stay, but his loyalty was not rewarded.
“I had to fight for every compensation, every bonus, every raise I got there,” Spencer said.
After changing jobs four times in the past year — twice being fired and twice quitting — she recently took a $20,000-plus job as a digital manager at Taft Communications, a public relations firm in Lawrence, New Jersey.
“If there's one thing I've learned from two layoffs and finding steady work, it's that I can find a job in two weeks,” she said. “I don't want to say I'm not modest about it, but that's the kind of market we're in.”
Spencer may be an extreme case, but she's not alone. Changing jobs and employers has often worked out well in the past year. According to data from the Federal Reserve Bank of Atlanta, people who saw their pay rise an average of 7.7%, compared to just 5.5% for those who stayed put.
Indeed, official labor market measures paint a rosy picture for workers – the unemployment rate was just 3.5% in December, a 50-year low. However, major high-tech companies including Google, Microsoft and Amazon have cut thousands of jobs in the past month, raising fears that more widespread job losses could result as companies go out for a lean period.
Conflicting signals leave workers with a dilemma: is it better to change jobs in search of better pay, or is it better to stay in the secure job you've got with the hope of a potential layoff?
According to experts, the best strategy varies by person and industry. After all, changing jobs during an economic downturn can backfire.
Note
Data from employer review website Glassdoor shows that employees noting “downsizing” in their job reviews rose 11% in January and 149% year over year – the highest since July 2020. month and has increased more than four times since last year.
“You could be putting yourself at risk for a 'last in, first out' scenario,” Benny CEO Andy Kalmon said in an email. “This is definitely a great time to network and see what's on the job market, but if your current job is secure, I'd proceed with caution.”
According to Aaron Terrazas, chief economist at Glassdoor, whether or not it's still time to look for a job depends largely on where you work. While layoffs have hit some sectors of the economy, hiring is still going strong in others—partly explaining the mixed signals in the data.
“In 2023, we are on track to have a two-way labor market with softer hiring conditions for skilled knowledge workers, but still very tough conditions for frontline service and trade workers,” Terrazas said.
Gregory Pontrelli, president of HR consulting firm Lausanne Business Solutions, said in an email that there is a big contrast in how their clients approach hiring depending on what sector they are in. Tech and financial companies are laying off 10%-15%. And those in manufacturing offer sign-on bonuses, flexible schedules, and more pay to attract applicants.
Terrazas said there is further variation within these broad categories. For example, in technology, those who are laid off by large companies can find jobs at smaller firms, albeit at lower wages. These companies still have open positions because they haven't been able to compete for talent against the tech giants for the past few years.
“Don't count yourself out because some big names are cutting back,” Resume CEO Kat Sabatini said in an email Tuesday. “These companies have been hiring en masse during the pandemic and are 'righting the ship' – some would say it's an overdue correction from the last few years of growth.”
Andrew Lokenauth, a career expert and adjunct professor at the University of San Francisco's School of Management, says it may be worth looking for a new position while still considering the opportunities available, especially if you're unhappy with your current job.
Note
In recent months, there have been roughly two jobs for every unemployed worker — an unusual imbalance since workers have outnumbered jobs for most of the past 20 years. That gives workers an advantage in job searches and salary negotiations, but the tide could turn as the economy slows.
In addition to stay or switch, there is a third option: none of the above. Long Islander Vanessa Steil, after recently leaving social media and public relations for a nonprofit group. Her new job gives her more flexibility to be a caregiver for her 94-year-old grandmother, and she, like many other freelancers and consultants, thinks she can get new opportunities as companies cut back on full-time workers.
Steil said she's seen many of her friends make that choice, too.
“If they were in the full-time world, if they didn't get those raises or promotions, then they just said, 'I'm going to do something for myself,'” he said.
However, if you're happy with your current role, it makes sense to stay put given the changing tides in the job market.
“If you are currently in a job that you are satisfied with and that offers stability and security, it may be wise to keep it,” Lokenauth said in an email. “A potential recession could make it harder to find a new job, and it's always better to have a job than to be unemployed.”
Even Spencer, a four-time job switcher in 2022, would think twice about doing it again.
“Given the current landscape of the labor market? I would be quite reluctant,” he said.
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