Americans’ Growing Reluctance to Quit Their Jobs, in Five Charts

Quitting is a sign a worker is unhappy with their job, but also a sign they are confident they can find another. Quits trending down can be worrisome. The quits rate fell in each of the past three recessions.

But workers today are also sticking with their jobs for other reasons, including greater flexibility, better pay—or even that they are happy. And that suggests the economy has more staying power.

Why workers quit, then stopped

The so-called quits rate—the number of resignations as a share of total employment—was 2.3% in July, down from a 3% peak in April 2022. Readings this summer were back to levels from before the pandemic began. Fresh Labor Department data on the quits rate and job openings is due on Tuesday at 10 a.m. Eastern time.

When the economy emerged from a short-but-sharp slump in early 2020, after Covid-19 lockdowns, demand for workers quickly heated up as short-staffed businesses reopened. Employers raised wages and improved benefits to attract new hires. More Americans quit jobs to jump to better-paid positions, a phenomenon some called the ‘Great Resignation’.

The rate at which Americans quit has more recently cooled as the premium they received to switch jobs has narrowed.

Weighing the pros and cons of walking away

Switching jobs comes with risks: new colleagues, a learning curve and many unknowns about working conditions at a new employer.

For some, it is an easier choice to stay put if the conditions are right.

Paull Young planned to quit his job as a partnerships manager at Facebook parent Meta Platforms in late 2020 to devote himself fully to work on combating climate change. Then Meta’s sustainability team let him know a role was opening on the company’s climate product team, he said, and he decided to switch roles but stay.

“It was a fit, where stuff I like doing, I can keep doing," said Young, a 40-year-old who lives in Los Angeles. “Especially at the end of the pandemic and having my first child, having good pay, good benefits, good healthcare—that was a big draw."

But loyalty to an employer doesn’t necessarily insulate workers from layoffs.

Hiring slowed this summer and the unemployment rate edged up from ultralow levels. Manufacturing, financial services and tech firms have had bouts of layoffs in the past year.

Young was caught in those, and lost his job in April. He now works as a freelance consultant on climate topics.

So why not quit now?

The pace of job growth cooled markedly over the past couple of years. Job postings were down about 15% from a year earlier in late September, according to jobs site Indeed.

“There are fewer opportunities compared to last year, and less opportunity to jump around," said Cory Stahle, an economist at Indeed.

And it might be hard to negotiate a big raise.

Employers say they are planning to offer smaller wage increases next year compared with this year, a fresh sign that wage pressures are easing as job growth cools. Budgets for salary increases are set to rise by 3.9% in 2024, compared with a 4.1% increase in 2023 for workers who aren’t in unions, according to an employer survey by benefits-advisory firm Mercer.

Some workers are happy to stay put

Since the pandemic, workers have gained more flexibility to work remotely or on hybrid schedules, and gained benefits like more paid time off. For many, that means they are happy in their current jobs.

Americans’ satisfaction with their jobs is the highest it has ever been, according to an annual survey published in May by the Conference Board. Hybrid workers reported the greatest job satisfaction compared with fully remote or fully on-site workers, according to the survey.

“Labor markets are loosening, but overall we are still in a very tight labor market," said Selcuk Eren, senior economist at the Conference Board. “If companies are interested in retaining workers, they need to continue offering hybrid and remote work settings."

Write to Harriet Torry at harriet.torry@wsj.com