The Phone Call That Budgets Did Not Anticipate
Consider a senior analyst at a mid-sized company. Her review went well, and her merit increase came in at 3%, in line with the budget and with what most of her colleagues received.
Two weeks later, a recruiter calls. The offer includes a base salary increase near 5%, a signing bonus, and a role with more earning potential through overtime and variable pay. She was not looking. She listens anyway.
Situations like this now show up in national data, and they carry a message that the headline employment numbers tend to obscure.
A Cooling Market With a Pricing Signal
By most measures, hiring has slowed. The Bureau of Labor Statistics reported that the US economy added only 29,000 jobs in September, and the unemployment rate sits near 4.2%. KPMG chief economist Diane Swonk has pointed to low turnover and a shrinking flow of new labor force entrants as defining features of this market. Economists describe it as low hire, low fire.
Yet the picture is not uniformly soft. ADP reported that private employers added 86,000 jobs in October, matching a revised September total and exceeding most forecasts. Federal JOLTS data showed job openings rising by 333,000 to 7.52 million in September, with hires and quits both increasing and layoffs declining.
The most important figures, however, concern pay. ADP Pay Insights, which draws on millions of year-over-year pay observations, found the following for October:
- Base pay growth:8% for job-changers, compared with 3.0% for job-stayers
- Gross pay growth:6% for job-changers, compared with 4.4% for job-stayers
ADP chief economist Nela Richardson noted that earnings growth for job-changers reached its fastest pace since March 2024, driven by a combination of bonuses, overtime, and additional hours alongside higher base pay.
The labor market is slow to hire, but it is not slow to pay for talent that moves.
Three Insights Beneath the Numbers
1. The premium for moving is larger than base salary suggests
The base pay gap between job-changers and job-stayers is 1.8 percentage points. The gross pay gap is 3.2 points, roughly 1.8 times wider.
On a $100,000 salary, a job-stayer’s gross pay grows by about $4,400 over the year, while a job-changer’s grows by about $7,600. That is a difference of $3,200 in a single year, and most of it arrives through components that never appear in a salary band.
The implication is direct. Organizations that benchmark only base salary are measuring the smaller part of the competitive gap. Competing offers are increasingly built on total compensation, including bonuses, overtime opportunity, and scheduling flexibility.
2. Slow hiring raises the stakes of retention
When openings are scarce, it is tempting to assume that employees are immobile. The data suggests otherwise. Quits are rising, and those who move are being rewarded well. Because turnover is low overall, the group of workers who change jobs is smaller, which makes each departure more consequential and the pay premium more visible to those who stay.
A resignation also carries a second cost. The vacancy it creates must be filled in the same market that is currently pricing talent upward.
3. The cooling is uneven, and pressure lands where hiring is strongest
ADP’s sector data shows a market moving in different directions at once. Professional and business services lost 27,000 jobs in October, the third consecutive monthly decline. Meanwhile, trade, transportation, and utilities added 39,000 jobs, education and health services added 28,000, leisure and hospitality added 19,000, and financial activities added 15,000.
Hiring was also spread across firm sizes, with small establishments adding 28,000 jobs, medium establishments 33,000, and large establishments 24,000. Regionally, the South led with 47,000 additions.
A single national narrative of a cooling market therefore misleads. Competition for talent is intense in sectors where hiring is expanding, and it is concentrated in the roles those sectors need most.
What Leaders Should Do Now
With 2027 compensation cycles taking shape, four actions deserve attention.
Benchmark total compensation, not base salary alone. Include bonus structures, overtime opportunity, and scheduling terms in every market comparison. This is where competing offers are gaining ground.
Identify retention-critical roles before budgets close. These are the roles where a departure would be costly and a replacement slow to find. A flat merit increase applied across every role treats unequal risks as equal.
Use variable compensation as a flexible lever. Retention bonuses, project incentives, and sign-on components allow an organization to respond to market movement without permanently raising its base salary structure.
Calibrate by sector and role. The market is not one market. Strategy for a healthcare operations team should differ from strategy for a professional services function, because the hiring conditions facing each are different.
Returning to the Phone Call
The analyst in that opening scenario was never unhappy. Her employer simply did not know that its 3% increase was being compared, quietly and persistently, against offers that were worth far more.
In a cooling market, that is the central risk. The headline numbers suggest that organizations have time. The pay data suggests that talent is already moving, and being paid to do so.
How Systemart Supports Talent Strategy in This Market
At Systemart, we help organizations interpret market signals like these and translate them into practical decisions: where to search, how to structure offers, and how to plan workforce needs across technology, healthcare, and enterprise functions. Through direct hire, RPO, and staffing partnerships built over 25 years, we work alongside clients to make sure their talent strategy reflects the market as it is, not as the headlines describe it.
Systemart is a premium technology and healthcare staffing partner providing direct hire, RPO, and workforce solutions across the United States. Connect with our team to review your talent strategy against current market conditions.
