For decades, job-hopping was one of the surest ways to climb the career ladder and boost your earning potential. But just as Gen Z settles into adulthood, that payoff has shrunk dramatically.
Workers are quitting at some of the lowest rates in years. Only 1.9% of nonfarm employees quit their jobs in August, according to the Bureau of Labor Statistics, keeping the quits rate near its lowest level since 2020. Data from the Bank of America Institute also shows the few who do move aren’t seeing the same financial rewards workers enjoyed just a few years ago.
In 2022, the typical job switcher saw their after-tax pay jump nearly 18% in a single year, compared with a 7% raise for workers who stayed with their employer, according to the Bank of America Institute’s analysis of its customers’ deposit data. By the first quarter of 2026, switchers’ pay was growing just 8%, compared with 5% for those who stayed put—the smallest gap between the two groups in seven years.
The shrinking premium is especially notable given new research from the National Bureau of Economic Research suggesting a varied résumé matters more than ever for those aiming for the top job. Today’s newly appointed CEOs have roughly 10 more years of experience outside the company they eventually lead than their counterparts did in 2000, according to the working paper, which attributes the shift to rising demand for “generalist human capital.” That’s precisely the kind of broad experience job-hopping once helped young workers build—and an opportunity that is narrowing for recent grads.
The diminished reward for moving reflects today’s “low-hire, low-fire” labor market, in which employers hold the upper hand and are reluctant to add headcount while the economy remains uncertain. In that environment, Bank of America Institute economists wrote, companies may feel they have less reason to pay a premium to lure new hires. Workers, meanwhile, afraid they won’t be able to make a switch at all, are “job-hugging”—staying in roles they would previously have left, often while growing resentful of the employers they feel stuck with.
The Great Resignation, when tens of millions of Americans quit their jobs in 2021 and 2022 in search of higher pay and better working conditions, now feels like a distant dream for recent grads entering the job market.
Tentative signs of a thaw are emerging. A September update from the Bank of America Institute found job-switching pay premiums have climbed to their highest level in more than three years, with Gen Z still seeing the biggest gains from changing jobs. But the premiums remain below pre-pandemic levels.
Gen Z’s job market woes
The typical new hire is no longer a bright-eyed college grad but someone in middle age: The average age of a worker starting a new job climbed to 42 in 2025, up from 40.5 in 2022, according to Revelio Labs. The low-hire, low-fire labor market is hitting the youngest generation hardest, as employers with limited hiring budgets prioritize experience over taking a chance on younger, less-trained candidates.
Stories of young job seekers firing off hundreds of applications without landing an offer have become all too common. The unemployment rate for recent college graduates—those ages 22 to 27—was about 5.6% in the second quarter, according to the Federal Reserve Bank of New York, well above the 4.2% rate for all workers as of September, per the Bureau of Labor Statistics.
Many young people blame AI, which took off after OpenAI released ChatGPT in late 2022. According to a January iCIMS Workforce Report, 51% of Gen Z feel AI is the greatest threat to their job security. But the real culprit is more likely a whirlwind of simultaneous changes. Apollo chief economist Torsten Slok has argued that Fed tightening, trade-war uncertainty, slowing immigration, and the “general low-hire, low-fire labor market” are the more likely drivers.
Despite all the tumult, Gen Z is still down to make moves. Even among those lucky enough to have a job, a significant portion of the generation wants to ditch their current employers for greener pastures.
Around 55% of Gen Z professionals plan to look for a new job before the end of this year, according to recent data from recruitment and staffing firm Robert Half. That’s up 23 percentage points from a year ago, when only 32% said the same.
“Career expectations have shifted for many younger professionals, and Gen Z tends to be especially intentional about finding roles that align with where they want to go professionally,” Dawn Fay, operational president at Robert Half, told Fortune. “When they feel stalled or don’t see room to grow, they seem to be comfortable exploring new opportunities rather than waiting for those circumstances to change.”
Bank of America’s data shows they’re following through. More than one in four Gen Z workers changed companies in the first quarter—more than 10 percentage points higher than millennials and more than triple the rate of baby boomers. Switching still pays off for them: Gen Z job switchers saw more than four times the wage growth of peers who stayed put. But those raises are far smaller than they used to be, with pay increases for Gen Z switchers down 20 percentage points since early 2022—a sobering trend for a generation already struggling to find its footing.