March 26, 2026
Amid a grim job market, new knowledge exhibits laid-off employees are sometimes accepting lower-paying roles.
New analysis exhibits {that a} rising variety of laid-off employees go on to simply accept jobs that pay lower than their earlier roles.
Revelio Labs, an analytics agency, lately reported {that a} rising share of employees are taking lower-paying jobs, Enterprise Insider reviews. Amongst white-collar staff who switched roles on the finish of final 12 months, 40% accepted pay cuts of greater than 10%, the very best price in at the very least a decade.
“Accepting that is going to set my profession again 5 years,” stated Scott, a tech employee who took a six-month contract technician position after shedding his senior supervisor place in 2023 and spending two years looking for an analogous job. “I do know I’m actually good. I need an opportunity to show myself.”
Amongst Revelio Labs’ findings, the share of execs receiving comparable raises has additionally fallen to its lowest stage, suggesting the labor market could also be weaker than it seems. Whereas simply 4.4% of the U.S. workforce is unemployed, low by historic requirements, that determine could masks how tough it’s been for displaced employees to seek out new roles.
Lengthy-term unemployment has practically doubled over the previous three years, and after prolonged job searches, many individuals, like Scott, are accepting positions they wouldn’t have beforehand thought of. In December, when Scott took the job, he was amongst 7.5 million unemployed Individuals competing for simply 6.6 million accessible positions.
His state of affairs underscores why many employees are accepting pay cuts: hiring has slowed, giving employers extra leverage and making them extra selective. One clear signal seems in job postings, the place corporations demand extra expertise. Mid-career roles now require about 10% extra expertise than three years in the past, and senior roles about 11% extra, in accordance with the findings.
The state of affairs might have lasting results for employees like Scott. Taking a lower-paying job can result in “wage scarring,” by which future earnings are anchored to a diminished wage. However with a weak job market, staying unemployed posed a good higher danger.
Hopes of a white-collar rebound have but to materialize, as layoffs tied to AI and broader cuts proceed throughout main corporations, including extra employees to an already aggressive job market. A working paper from the Nationwide Bureau of Financial Analysis discovered that fewer than half of surveyed CFOs (44%) anticipate AI-related job cuts.
Throughout the broader financial system, that interprets to about 0.4% of jobs, roughly 502,000 out of 125 million, with about half impacting white-collar roles. Whereas that’s a pointy soar from final 12 months’s 55,000 AI-related layoffs, it nonetheless represents a small share of the general workforce.
“It’s not the doomsday job situation that you just would possibly generally see within the headlines,” stated John Graham, co-author of the research and the director of the Duke CFO survey.
For now, Scott is concentrated on proving himself in his new position and is already being thought of for a promotion with a modest elevate. He’s additionally interviewing for different positions that might supply higher pay. Although none would match his pre-layoff wage, every might transfer him nearer to his former profession path.
“I do know I can impress folks if they provide me an opportunity,” he stated.
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