More than a quarter of new hires are taking pay cuts, survey finds

Survey finds 27 percent of new hires in Q4 2025 accepted a pay cut: ZipRecruiter

Most who took pay cuts said they did so because they were unemployed

Pay premium for switching jobs has narrowed considerably, ADP data shows

Survey finds 27 percent of new hires in Q4 2025 accepted a pay cut: ZipRecruiter

Most who took pay cuts said they did so because they were unemployed

Pay premium for switching jobs has narrowed considerably, ADP data shows

(NewsNation) — Landing a job has gotten harder, and many Americans are accepting lower pay to get hired.

More than a quarter (27 percent) of people who recently started new jobs took pay cuts from their previous position, according to ZipRecruiter, while about 16 percent saw no change in pay.

Both figures rose from the prior quarter, a sign that workers are losing negotiating power in a softer labor market.

Most new hires who took pay cuts (65 percent) said they did so because they were unemployed and needed a job, up from 54 percent earlier in 2025.

Only 30 percent of workers negotiated their offers in the fourth quarter, the online hiring platform found, down from 36 percent in the previous period — another sign of waning leverage.

“When facing extended unemployment, restarting income and benefits often takes priority over holding out for a higher salary,” ZipRecruiter said in its latest new hire report, based on a survey of 1,500 recent hires.

The findings highlight how much the labor market has shifted from just a few years ago, when wage growth surged, and jobs were plentiful.

Hiring slowed sharply in 2025, with job growth largely concentrated in health care. Unemployment remains relatively low at 4.4 percent, but job seekers are taking longer to find work.

In February, 1 in 4 unemployed people — roughly 1.9 million Americans — had been looking for work for six months or longer, about 400,000 more than a year earlier.

Job switching no longer carries the same pay premium

Switching jobs often meant a sizeable pay bump during the post-COVID-19 pandemic hiring boom, but those gains are harder to come by now.

Pay growth for job-stayers was unchanged in February at 4.5 percent year-over-year, but pay growth for job changers slowed to 6.3 percent, according to payroll processor ADP.

That puts the so-called pay premium for switching jobs at 1.8 percent — down from 8.4 percent in April 2022 and the lowest level in ADP data going back to 2020.

“With hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs,” Nela Richardson, ADP chief economist, said earlier this month.

It’s not just the pay premium for switching jobs that has shrunk — fewer new hires are getting raises at all.

Just over half of new hires (56 percent) secured higher pay than in their previous role in the fourth quarter of 2025, according to ZipRecruiter — down from 70 percent during the same period in 2023.

“Fast-paced job-hopping has been replaced by the cautious decision-making of job-hugging as stability beats rapid advancement,” the online employment platform wrote.

American employers unexpectedly cut 92,000 jobs last month, a sign that the job market remained under strain to start the year.

At the same time, job openings rose to nearly seven million in January, while the number of unemployment claims is still historically low.

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