The job market in the U.S. has seen some significant changes over the past few years. What was once a scene bustling with unprecedented levels of employee movement is now witnessing much less turnover.
To put it simply, what was dubbed the “great resignation” in 2021 and 2022, has now transitioned into what labor experts are calling the “great stay.” This shift is characterized by low hiring levels, fewer quits, and minimal layoffs. “We’re moving beyond the chaotic labor market of the pandemic,” remarks Julia Pollak, ZipRecruiter’s chief economist.
### Changes in the Job Market
As the U.S. began to rebound from its slump caused by COVID-19, businesses were eager to staff up. The number of job openings soared to historic heights, unemployment dropped to rates not seen since the late 1960s, and salaries rose sharply as companies vied for talent. In 2022 alone, over 50 million workers quit their jobs, encouraged by abundant new job prospects.
However, over time, the labor market has started to ease back.
### Big Causes for the Great Stay
The recent trend of decreased job-hopping, known as the “great stay,” can be attributed primarily to employers’ reluctance to part with their staff, a mentality rooted in the challenges of hiring and retaining talent they faced not long ago, explains ZipRecruiter’s Pollak.
Another key factor is the decline in available jobs, which has led to fewer resignations—a sign of workers feeling less confident about finding new opportunities. This change is largely due to the Federal Reserve’s efforts to control inflation through interest rate hikes from early 2022 through mid-2023, according to Pollak. Higher borrowing costs made companies halt expansion plans, which in turn affected hiring rates. Even though the Fed began reducing interest rates in September, they have indicated that future cuts will be more gradual than initially anticipated.
### Stabilizing Labor Market
These elements suggest that while the labor market is steadying, it’s still feeling the effects of recent economic shocks, notes Shrivastava from Indeed. This “great stay” assures those employed unprecedented job security, says Pollak. However, for those on the job hunt, including fresh college grads or those looking to switch from their current positions, the landscape might be less welcoming. Pollak advises these job seekers to consider expanding their search parameters and to possibly acquire new skills to improve their chances.
