Loyalty used to come with an implied deal. You do solid work, you stick around, your pay keeps up. A lot of workers in 2026 feel like that deal quietly expired, but the expectations stayed.
The frustration rarely starts with greed. It starts with the annual raise cycle that feels pre-decided, the promotion that comes with a title and a modest bump, and the creeping realization that the biggest pay jumps keep happening to people who leave.
That gap has a name now, the loyalty penalty. Stay put long enough, and you can end up earning less than someone hired yesterday to do work similar to yours, sometimes even on the same team.
The important nuance, job hopping does not always pay like it did during the Great Resignation peak. The premium narrowed in a cooler market. Even so, the latest data still shows switchers ahead, and over a few years, that difference compounds into real money.
What the latest pay data says
ADPโs Pay Insights data for January 2026 shows job-changers saw a median year-over-year pay increase of 6.4%, compared with 4.5% for job-stayers. That gap, 1.9 percentage points, looks small until you remember it can repeat year after year for people who move strategically.
ADPโs research team also notes the job-switching pay premium has narrowed and sits near the smallest gap theyโve measured since they began tracking this series in 2020, but it still exists.
Another credible dataset tells a similar story with an even tighter spread. The Federal Reserve Bank of Atlantaโs Wage Growth Tracker, built from CPS microdata, has shown long stretches where switchers and stayers run close, and in some months, stayers briefly edge ahead. That matters because it explains why the argument online has gotten noisier. People are arguing about different time windows.
Why job hoppers still tend to win, even in a slower market
Most companies budget differently for retention than for hiring. Raises are often governed by bands, cycles, and internal equity rules. Hiring budgets are driven by urgency and market price. When a team needs someone now, the offer often stretches further than the raise pool ever will.
That dynamic creates the loyalty penalty without anyone having to โcheatโ you. The system does it. Employers pay market rates to attract, then rely on inertia to retain.
Investopedia ran the compounding math using ADPโs January 2026 gap and showed how a modest annual advantage for switchers can add up over time, even with conservative assumptions. The point is not the exact dollar figure for every worker. The point is that small percentage gaps become meaningful when they persist.
Why the premium narrowed, and why that does not โsolveโ the loyalty penalty
A cooler labor market reduces leverage. When quits slow and hiring slows, employers feel less pressure to outbid each other, and the gap between switchers and stayers compresses.
That compression is real, and it shows up in coverage of the latest ADP release. The story in 2026 is not that job hopping always wins. It’s that job hopping still wins more often than people expect, but the margin is thinner than it was in 2021โ2022.
There is also a second force at work. A lot of roles now come with tighter compensation bands than candidates got used to during the hottest part of the market. WSJ reports that switching feel less rewarding, especially in fields where pay got ahead of fundamentals and then corrected.
The long-term impact, the loyalty penalty compounds
If you want to understand why this topic keeps resonating, ignore the culture war framing and look at the timeline. Careers are long. A one-time under-market adjustment can echo for years because future raises and bonuses often build on your current base.
In plain terms, a worker who stays underpaid can become โlockedโ into a lower trajectory. Even if they get respectable percentage raises, those raises apply to a smaller number. Meanwhile, a strategic switch resets the base closer to market, and the next raise compounds on that higher base.
How to use this data without turning your career into a constant job search
Not everyone wants to hop. Not everyone should. Switching jobs carries risk, and a slower market punishes sloppy moves. The practical lesson here is to verify with actual data.
- Track your market signals. Once or twice a year, pull a small set of comparable roles, salaries, and requirements. If you cannot defend your current pay with market data, you have a negotiation problem, even if you never intend to leave.
- Ask for an off-cycle adjustment with a specific case. โI want more moneyโ rarely works. โHereโs my scope, hereโs market range, hereโs the gap, hereโs what I deliveredโ works more often.
- Build optionality quietly. You do not need 40 applications a week. You need a clean pipeline you can activate when the math stops making sense.
If you want a simple way to stay organized without turning your life into tabs and chaos, use a tracker. SpreadsheetPointโs free job tracker spreadsheet works well for this, even if your goal is only to benchmark the market and keep a light just-in-case pipeline.
And if the bigger issue is cash flow and planning, the loyalty penalty shows up there too. When pay growth lags, your budget gets tighter even when you feel like you are doing everything โright.โ A basic expense tracker can help you see the gap in real numbers and decide what matters, negotiate, cut recurring waste, or pursue a better offer.
The takeaway
Workers feel angry about loyalty because the numbers keep validating the feeling. Even in 2026, with a cooler labor market and a narrower premium, job-changers still see higher median pay growth than job-stayers in ADPโs data. That is the loyalty penalty in its simplest form.
The healthiest way to respond is not constant hopping. It is refusing to be surprised. Know your market value, track it like any other metric that matters, and make your next move, stay, negotiate, or leave, with your eyes open.