A salaried employee in any Tier 1 city across the globe was confident of bagging a 20% to 30% salary hike for job switching. The market was robust with ample growth opportunities for both the companies and the employees. The ratio has now narrowed down, benefiting the company only, and not the job switcher.
“The switching premium has evaporated,” said Lacey Kaelani-Dehan, CEO of job search engine Metaintro to Investopedia. Just three years ago, job switchers saw a 20% to 30% salary hike in their new offer letter. Now it’s only 3% to 5% increase from the existing pay scale.
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“In 2021-2022, job switchers saw 20% to 30% salary bumps. Now it’s 3% to 5%. The job market has normalized, and employers have the negotiating power back,” she said. The development indicates that the job market is cooling as firms tighten their budgets. In addition, fewer job openings are available, making it difficult to secure a salary hike for switching.
Employers no longer feel the pressure of coughing up more to hire new talent. Upskilling is also a concern in the industry, as most skills have stagnated with limited growth. This gives employers the negotiating power, cutting down on significant salary hikes across the employment sector.
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AI Talent Bucks the Trend, Commands a Bigger Salary Hike For Switching
The technology industry, especially those in the AI sector, has bucked the trend in job switching. Engineering talent in artificial intelligence commands a 35% to 56% salary hike during job switching. Tech firms are willing to shell out more to attract top talent and build their ecosystem. It is now among the highest-paying jobs in the technological sector.
Almost all multinational corporations have invested billions in building their AI centers. Job switching and expecting a bigger salary hike are possible now only in this sector. Apart from AI, jobs in the medical field, especially nurses, are also able to get bigger salaries for switching.