After two years of record-high quits, the "great resignation" could be fizzling out. 

In 2022, more than 50 million U.S. workers left their jobs, the highest number of quits since the government started keeping track in 2000, according to federal data. 

Abundant job opportunities, labor shortages and significant pay increases for workers who changed jobs all fed this historic quitting wave — now, however, these dynamics are abating, and the great resignation is looking like "a thing of the past," says Nela Richardson, the chief economist at ADP.

Fewer people are quitting their jobs so far in 2023: In March, the number of quits decreased to about 3.9 million, the lowest level since May 2021, according to the Labor Department's latest Job Openings and Labor Turnover survey.

As Richardson sees it, "the 'big quit' of last year could be easing into the 'big stay.'"

But the great resignation, a trend that spawned a million colloquialisms and widespread panic among bosses, isn't driven entirely by economics. 

"The great resignation, at its core, is a people shock," Richardson explains. "All of the challenges of the pandemic led us to re-evaluate the purpose of work in our lives … but the labor market of 2021-2022 supported this self-reflection: stimulus checks, a moratorium on rent payments, all of these initiatives relieved the financial pressure of staying in a job you hate because you need the money."

Now, most of the social supports job-switchers have counted on are "gone," she adds. "The labor market is no longer in job switchers' favor." 

Smaller pay bumps for job switchers

Job hopping isn't paying off like it used to.

In April, job switchers saw a 13.2% boost in pay year-over-year, down from 14.2% just a month earlier, ADP reports. It's the lowest pace of wage growth job switchers have seen since November 2021. 

To be fair, workers who stick with their jobs are seeing their wages fall, too, but at a much smaller rate: Job stayers' wages fell 0.2% between March and April 2023, compared to where they were a year ago, according to ADP. Richardson expects wage gains for job switchers to decline at a steeper rate than job stayers in the coming months.

Those who change jobs, she adds, are "far less likely" to see a sizeable increase in their wages than they were even nine months ago. In some cases, "you would have done better and made more money if you stayed in your current job instead," she adds. 

This is especially true for workers looking to switch jobs within leisure and hospitality, Richardson points out, as this industry is used to high turnover and employers feel less pressed to pay a premium for new hires. 

Across all industries, however, "companies aren't holding on to workers as tightly as they were before," says Richardson. "There are no grand, romantic gestures in the labor market anymore."

Although wage growth for full-time workers is outpacing inflation, Richardson expects pay gains will "begin to stall" in the coming months alongside the Federal Reserve's continued efforts to lower inflation. 

The labor market is 'starting to re-balance'

The demand for talent and supply of candidates is finally evening out. 

While there are still a lot of job openings, these numbers are nowhere near the historically high level that spurred the great resignation. As of March, there were close to 9.5 million job openings, down 20% from a year ago, according to federal data. 

At the same time, the number of people returning to the job market has increased: During the depths of the pandemic, the labor force participation rate fell to less than 80%, but edged up again to 83.3% this April, the highest rate in 25 years, which has boosted hiring.

Now that companies have more or less recovered the millions of jobs they lost to the pandemic, workers have lost some leverage, says Richardson.

"If you're wondering what the next six months will look like, we can expect to see a labor market that's starting to re-balance," she explains." "This means that jobs will become more competitive, and the benefits employers were offering just to get people in the door, like remote work, will ease."

What the 'big stay' means for Gen Z, millennials in the workforce

Gen Zers and millennials could see the biggest pay gains from not quitting, even if they are more likely than other generations to resign this year.  

Close to 72% of Gen Zers and 66% of millennials are considering a career change in the next 12 months, compared to 55% of Gen Xers and 30% of baby boomers, a recent LinkedIn survey found.

Gen Zers, in particular, are exploring their options after beginning their careers in fractured hybrid or remote environments at the start of the pandemic, Karin Kimbrough, chief economist at LinkedIn, told CNBC Make It in January.

However, many young job switchers regret their decision to quit. Nearly 90% of Gen Zers who left their jobs during the great resignation regret quitting, and as a result, their mental health is declining, according to a recent Paychex survey of 825 workers. 

Gen Z and millennials who stay at their jobs for more than 12 months have seen the greatest pay increases compared to other generations of workers, likely because they "had the lowest wages to begin with," Richardson points out.

Salaries for workers between the ages of 16 and 34 who stayed at their jobs are 10-15% higher, on average, than they were a year ago, ADP reports. 

Regardless of which generation you're in, Richardson stresses how important it is to consider all factors when deciding whether to switch jobs, including benefits and flexibility.

"If higher pay is your No. 1 priority, you'll have to be more selective," says Richardson. "But if you're willing to weigh the other benefits of a job, including flexibility, you might have more options available to you."

DON'T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!

Check out:

Some remote jobs will still be hot in 5 years, and others 'might not exist,' economists say—how to know the difference

3 industries with the greatest risk of layoffs—and 4 that are probably secure

CEOs are quietly backtracking on remote work—and more companies could follow