Switching jobs to get higher pay works best in these industries

Andrew Keshner

Finding a new job is one way to get a pay increase at a time when inflation has been outpacing wage growth

Finding a new job is a good way to get a pay increase - in some industries more than others.

September's jobs report shows a paycheck doesn't seem to be going as far, even as people are sticking to their jobs.

Average hourly earnings climbed, but less than expected, both on a monthly basis and compared to a year ago.

Month over month, earnings barely moved, with a 0.1% increase. Year over year, earnings increased 3%, just under the 3.1% forecast.

It's already been five straight months of inflation rates outpacing average hourly earnings growth on a yearly basis, said Bret Kenwell, U.S. investment analyst at eToro. If September's inflation rate tops 3%, it will be a half-year streak, he noted.

All in all, at a time when Americans are sorely aware of their everyday living costs, Friday's numbers didn't help much.

What does help? Finding a new job that will pay more. They are out there - especially for people who switch jobs within one sector.

"Certainly, the pay premium in construction jobs is the strongest," said Nela Richardson, ADP's chief economist. In fact, the pay bumps to move within the industry have been growing larger as the year progresses, she said.

It's difficult to know how much of those pay increases are powered by demand to build AI data centers, but it could be part of the story, she said.

Check out this sector-by-sector breakdown from ADP (ADP), showing the difference in median pay between job stayers and job switchers in specific industries. The chart shows gross pay, which is base pay along with extra pay including overtime and bonuses.

All sectors show that switching jobs results in higher pay, except for leisure and hospitality.

It's not that workers take a pay cut when they make a move in that industry. It's that the salary increase for job movers is more modest than the pay increases for people who stay at their job. In other words, switching jobs doesn't pay off for those workers.

Across all industries, job stayers had a 4.4% increase in pay, while job changers had a 7.3% increase, according to ADP data. That's a 2.9% difference.

Construction added 11,000 jobs in September and the industry has added around 10,000 jobs each month for the past 12 months, the Bureau of Labor Statistics said Friday. Construction jobs were the second-largest driver of private-sector job additions last month, behind healthcare, which added 23,000 jobs.

Meanwhile, the information sector shrank by 10,000 jobs in September. Both are "potentially related to the ongoing artificial-intelligence buildout and efficiencies gained by its use," said Rick Rieder, BlackRock's chief investment officer of global fixed income.

Some people in construction won't move for less than a 10% raise

The AI data-center buildout is just one part of the construction-industry boom, said Stephanie Lovett, vice president of construction and property at Hays.

Infrastructure projects, hospitals and healthcare facilities are also powering the need for workers, said Lovett, who recruits for general contractors and large subcontractors. So are projects like distribution centers and new schools reflecting population shifts, she noted.

Lovett's company fills skilled management positions, such as project managers and superintendents.

Right now, these roles are fetching base pay that ranges around $90,000 to $150,000, plus benefits. The pay packages also typically include car allowances and bonus opportunities, she said. Certifications and experience working on data centers and pharmaceutical sites can tack on extra pay, she added.

In Lovett's experience, candidates are not considering a job move for anything less than a 10% pay increase. Moves aren't just about bigger paychecks. Candidates are also weighing factors including time-off options, company equity and the employer's future project pipeline.

"The biggest challenge is not finding people, it's finding people with the right experience," she said.

There are transferable skills people can bring to the construction industry, which is good news for anyone who wants to break in.

Skills managing schedules, budgets and a team of people are appealing, she said. For example, someone with a financial background could be a good fit for a contractor who needs help assembling project bids.

Lovett heard of a client who was pleased with the hire of a school teacher. Hired as an assistant project manager, the candidate's strong communication and organizational skills were his selling point, she said.

Some construction companies are open to hiring candidates with no prior industry experience, but not all.

There's one major challenge for construction and the trades, which could be a win for workers. The industry is short of workers, according to Associated Builders and Contractors.

To meet construction spending demand, the industry needs to attract 349,000 new workers, the trade group estimated.

Builders may be increasingly ready to look beyond the industry to find candidates who could be the right fit, Lovett said. "As the market continues to tighten, people are going to be more open to it."

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-Andrew Keshner

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10-03-26 1242ET