Switching Jobs Pays Less Than Ever, New ADP Data Shows

Also In This Episode

• ADP National Employment Report
• The Conference Board Employment Trends Index
• Appcast’s 2026 Recruitment Marketing Benchmark Report

Full Episode Transcript

Pete Newsome: 0:00

Welcome back to Cornering the Job Market. Today’s Tuesday, February 17th. I’m Pete Newsome, and today’s workforce news and headlines include a leading employment index that just ticked up. And that’s despite consumer confidence in the job market hitting a five-year low. So I’ll break down what that contradiction means. Plus, a massive new recruitment report just came out. I won’t go through all of it, I’ll just hit the highlights. But unfortunately, it tells us that a white-collar recession is upon us right now.

0:26

But first, ADP research just published new pay data this morning, and the headline is clear. And that’s that the financial reward for switching jobs has shrunk to the smallest gap ADP has ever recorded. Job stayers saw a 4.5% annualized pay growth in January, while Job Changers had a 6.4% pay growth, which was a decline from December. In the past, especially during the great resignation period, you could jump to a new company and expect a 7 or 8% pay bump over what you’d get by staying. But that premium has been cut roughly in half. So the incentive to move, it’s just gone. I mean, it’s not completely gone, but for all intents and purposes, when you weigh the risk or reward, it may as well be. And at the very least, it certainly isn’t what it used to be. ADP also found that Americans are working about an hour less per week now than they were before the pandemic. And the hours are at a seven-year low. Also, the share of workers putting in less than 35 hours a week is now about 45%, which is six percentage points up from 2019. And that part-time number is significant because it tells us employers are managing risk by keeping hours flexible, and workers may be piecing together income differently than before, and specifically differently than they’d like to be. So if you can’t get hours, you can’t make enough money, that’s just math is not good. We we can just easily see that.

1:56

Now there is a potential bright spot. New higher pay jumped to 19 an hour in January after being stuck at roughly 18 an hour for about a year and a half. According to ADP’s chief economist Nella Richardson, an uptick in new higher pay is the first sign that the labor market’s low hire, low fire standoff might be breaking in the right direction toward more job churn and better pay in 2026. All right, let’s hope that happens. I mean, that’s a number worth paying attention to. Because if new higher pay holds at 19, it means employers are actually competing for talent again, at least at that level. So we’re not seeing a hiring boom yet, far from it. Only a couple of sectors are really experiencing uh decent hiring right now, but it’s a step in the right direction, it’s positivity, and as I often say lately, we’ll take it wherever we can get it. So there is that.

2:46

Um, also a quick note on the weekly data ADP’s NER Pulse came out this morning, and it shows private employers added an average of 10,250 jobs per week through January 31st. So that’s good. That’s the third straight week of strengthening gains after a pretty awful December that bottomed out at 4,250 per week. So again, this is nothing to celebrate, but any trend in the right direction is worth pointing out. And ADP’s numbers, of course, come from private payroll data to not government data. So we can, well, let’s just say we can feel that these are accurate. Also, today the conference board’s employment trends index rose. Now, this is a leading indicator. So when it goes up, job growth typically follows. More positivity. How about that, right? I mean, I don’t remember the last time I had two positive stories in a row. Six of the eight components they measure improved. So on the surface, the labor market looks pretty balanced right now, but it does get a little interesting because the confidence numbers are going down. So they’re heading in the wrong direction. That’s the share of consumers saying jobs are hard to get. So that jumped to 20.8% in January, and that’s the highest level since early 2021, and things were still really bad in 2021.

4:01

So the conference boards, Mitchell Barnes summed it up pretty well. I’m going to read a quote from him. He said the confidence of consumers and businesses point in a negative direction. It remains to be seen whether 2026 will continue to be the theme of a low higher, low fire environment. I certainly think that’s what we’re going to see for the foreseeable future. I’m not nearly as optimistic as I was in December, heading into January. Just not seeing uh really anything that should is going to serve as a catalyst for change, or at least not anything good. I don’t want to talk about bad today. I want to keep this positive, but it’s just sort of, we’re just kind of frozen in place right now, which is what I feel like I’ve been saying for a long time. So that’s what the data tells us from ADP this morning. Again, two stories that are that are trending in the right direction. But then here’s our third headline today. Uh, it’s from Appcast. They just released their 10th edition of uh what they call their uh recruiting marketing benchmark report. And AppCast has access to a lot of job openings and applications. I won’t get into detail about what their business is right now, but they have visibility to about 300 million clicks and over 27 million applications across 1,200 employers. So they’re an interim they just sit in the middle of a lot of applications. I’ll just say that, uh, hence the name, AppCast. But here’s what the report tells us from a big picture standpoint.

5:24

The similar to what I’ve already said in the other reports uh today, the the the market is balanced but but frozen. Supply and demand are nearly identical at about 171 million on each side, and this is 2025 data. Uh, monthly job growth hit its slowest pace since 2009, outside of COVID time. So that is alarming, right? I mean, that it doesn’t matter what the White House tries to tell you, it doesn’t matter what gets reported. I was super annoyed last week because the uh jobs report came out, we added 130,000 jobs, but revised down by almost a million in 2025 jobs that never existed in the first place that were publicized as being added at one point. So, look, when I see that 130k for January, I don’t believe it. Do you? I mean, you shouldn’t based on history. We’ll expect to see that revised down uh next month, probably. But that’s alarming. I mean, seeing uh monthly job growth according to AppCast at its lowest since 2009. So that is just that that tells us a lot. Um, also the quit rate flattened flatlined at 1.9%. So that great resignation we saw a couple of years ago, that is a distant memory at this point. We are back to the great stay, job hugging, whatever you want to call it, right? Nobody’s moving. That’s the bottom line. And as I alluded to at the beginning, the data confirms that we’re effectively in a white-collar recession. Apply rates for office-based jobs went through the roof.

7:03

So this is lots of people looking for jobs. Technology hit 7.14%, which is up 14% year over year, legal jump nearly 18%, finance climbed 14%. Meanwhile, healthcare apply rates dropped, right? So healthcare workers, we know that that has been a good market, one of the few. They’re not having to look as hard for jobs. Those um those apply rates dropped almost 6%, and hospitality fell over 7%. So those sectors still can’t find workers. I mean, that’s what this is telling us. So it’s like we’re living in two very different labor markets right now. If you work at a desk, you’re competing with a flood of applicants. But if you work on your feet, employers are competing for you. Can you think of why that might be happening? I mean, hmm, how why would why would uh desk uh desk jobs be strained right now? What could have led to that? Oh, maybe, maybe can I get away with the day without saying the A word? Well, I’m not gonna say it, but why do we think that white-collar jobs might be struggling right now? I don’t think I’ve said it once. I don’t remember the last time I went through a podcast or video and did not say the acronym, the A acronym. I’m not gonna say it today.

8:24

Now here’s the counterintuitive headline. Recruiting actually got more expensive despite the softer market. Cost per application rose to $19.32, and cost per hire climbed to roughly $1,340. And if you were hiring someone with technology skills, that cost per hire more than doubled to $2,795, even though technology had the highest apply rate of any sector. So that it’s that data seems counterintuitive, contradictory, whatever you want to call it. So the takeaway is that more applications don’t mean better, uh it doesn’t mean better hiring, right? In technology, the flood of applicants is overwhelming to recruiters. That’s happening right now, especially with all the fake applicants. One click apply, it is a mess. So you when you have too many unqualified candidates, um, you can’t screen anyone officially. You can’t get to the good ones. So that is just um it’s a mess. I don’t know what else to say about the when you’re trying to hire through advertising, it just creates through job ads, it just creates a just a convoluted cluster that benefits no one, right? I mean, that’s what it is. So that I I don’t I I think AI is gonna help us. Oh, I said it. I said I wasn’t gonna say the A-word, and I just did, but not in a negative way, not about job displacement. This is positive. We’re keeping things positive today. It is going to help create efficiencies that don’t currently exist in the recruiting process as a whole. So I’m sticking with that for now.

9:54

Also, AppCast uh found that salary transparent job postings pulled a 5.03 apply rate versus only 4.51 without transparency. So, employers put your salaries in your in there. That will get you more applicants. And I’ll I won’t say more, I think it’ll get you better applicants. I mean, this is it’ll get more. That’s not the goal. The goal is better, and we know that that is something that is really important to candidates. So that’s it for today. But here’s your fun fact before we close. Working from home can save the average person between $2,000 and $7,000 a year in commuting and food costs. So commuting makes sense. Food cost, I guess. If you’re if you didn’t bring your lunch, if you were someone who went out to to eat all the time, I would think that would be balanced out by eating more when you can walk a few steps, get to your kitchen. But we’ll we’ll say that as a compelling case. If you’re trying to uh um to recruit someone who gets gets to work remotely, well, that’s that’s it, those are real bucks that are in their pocket. And if you I don’t know, maybe make that case to your boss if you have to work in the office every day. I’m trying to think of the benefit. Maybe you’ll be a happier employee. So use that. Those are real numbers, and um you know if you can use them to your advantage, I hope, I hope, uh, hope it works out. So thank you for listening today. That’s it. Please like, subscribe, share with anyone who you think might be interested. And I look forward to talking to you tomorrow.