Switch Jobs, Get Paid Less
Two in five white collar workers who changed jobs at year-end took pay cuts of more than 10%. After the big raises of the past, are firms seeking a ‘salary recovery?’
With promotions down and raise percentages in the low single digits, it’s not surprising that workers would be looking to switch jobs in hopes of boosting their pay. The thing is, experts say, it simply won’t work today.
In one of the starkest examples of how much the job market has shifted in favor of employers, two out of every five white-collar workers who switched jobs in the second half of 2025 took big pay cuts to do so. Even worse, according to new research from economic-analysis firm Ravelio Labs, the cuts exceeded 10%—the highest percentage in a decade, At the same time, the number of job switchers who got raises of 10% or more at their new gig fell considerably, from 55% four years ago to just 41%.
Experts believe that in most cases, many organizations no longer feel they must pay premiums to attract new talent. These firms worry that they overpaid for roles during the so-called Great Resignation of several years ago. “This isn’t employers discovering jobs are worth less—it’s employers no longer being forced to pretend they’re worth more,” says Tom McMullen, leader of Korn Ferry’s North America Total Rewards expertise group.
As recently as the early 2020s, employers were offering pay-increase percentages in the mid-teens or higher, whether to attract talent from other organizations or keep their own employees from jumping ship. Indeed, some experts worried at the time that a massive gap might be developing between the wages of loyal employees and those of new hires and workers who threatened to quit.
But over the last two years, the external labor market has emerged from its post-pandemic hiring spree. The conditions that supported high mobility, rapid hiring, and big wage gains have reversed. The nation’s employers are taking longer to make hiring decisions—if they’re hiring at all. The nation’s hiring rate has been this low at only one other time since the early 2010s: in April 2020, at the height of the COVID-19 lockdowns.
When a company does decide to fill an open role, it often won’t make an offer until it has reevaluated the salary associated with it. In some cases, a firm lowers the pay for a role after an employee vacates it, confident that they can fill the spot with a willing outside candidate or an internal one. HR experts even have a term for this phenomenon: salary recovery. “We had not heard much about it in the last few years, for obvious reasons,” says Ron Seifert, a Korn Ferry senior client partner and leader of the firm’s North America Workforce Reward and Benefits business. But some firms, eager to keep a lid on labor costs, are now adopting the practice.
Even for AI proficiency, many employers won’t pay a big premium. When Korn Ferry surveyed pay practices at more than 4,000 companies in 133 countries, firms overall were offering an average of just 10% above market rate (5% at the low end, 15% on the high end) for AI roles. Firms aren’t expanding their budgets to cover that cost, either; instead, they’re often siphoning it from other roles. Workers whose scope has been reduced by AI are seeing a pay cut of between 5% and 10%.
Of course, firms couldn’t do any of this without job seekers who are willing to take less money—and their numbers are increasing, experts say. Indeed, there’s evidence that workers might be adjusting their priorities, valuing a stable job, future career opportunities, and non-salary benefits over an immediate salary bump. Asset manager Nuveen recently surveyed 2,000 US workers about their priorities, and found that more than half—51%—have recently applied for or taken a job with lesser or equal pay but better benefits. Plus, 62% said they would choose long-term job security over improved benefits or a higher salary. “Candidates who once anchored on rapid pay growth are now anchoring on employability,” McMullen says.
Learn more about Korn Ferry’s Total Rewards capabilities.
