The dramatic churn in labor markets during the Covid-19 pandemic — dubbed the “Great Resignation” — is giving way to a new phase: the “Great Stay.” Economists use the term to describe a period of unusually low worker turnover and cautious employer behavior, where firms are neither aggressively hiring nor shedding staff.
“We had this ‘Great Resignation’ just a couple of years ago,” said Nela Richardson, chief economist at ADP, in an interview with CNBC. “But now, workers aren’t going anywhere.”
She noted that many employees secured favorable roles during the pandemic, often with higher pay and greater flexibility, such as hybrid or remote arrangements. “What we actually see in the data is very low turnover, which is very unusual in the U.S.,” Richardson added.
‘No-hire, no-fire’ market takes hold
Employers are exercising caution as well. Richardson described the trend as a “no-hire, no-fire” environment — with hiring decisions on hold amid economic uncertainty, but layoffs remaining scarce.
Initial jobless claims remain near historic lows, underscoring employer reluctance to reduce headcount after years of difficulty attracting and retaining talent. “It took so long in the U.S. to get them back,” Richardson said.
This marks a sharp reversal from the pandemic-era surge in resignations, when around 50.5 million Americans quit their jobs in 2022, up from 47.8 million in 2021, according to the U.S. Bureau of Labor Statistics.
U.S. labor market cooling
Still, signs of softening are emerging. Nonfarm payrolls rose by just 73,000 in July, well below expectations, while the unemployment rate ticked up to 4.2%. The weaker data has fueled speculation that the Federal Reserve may be inclined to lower interest rates at its September policy meeting.
U.K. labor market mirrors U.S. shift
A similar “Big Stay” dynamic is unfolding in the U.K. Job vacancies, which had surged to a record 1.29 million in Q2 2022, have since cooled sharply. By May–July 2025, vacancies dropped 5.8% to 718,000, declining in 16 out of 18 sectors, according to the Office for National Statistics (ONS).
The inactivity rate — the share of people aged 16–64 not working and not seeking work — stood at 21% between April and June 2025. Economists point to high labor costs from tax hikes and minimum wage increases, alongside broader economic uncertainty, as factors dampening recruitment appetite.
“Business hiring has been continuously dropping for the past three years,” said Monica George Michail, associate economist at the National Institute of Economic and Social Research. “Meanwhile, falling inactivity and rising unemployment are increasing the supply of labour.”
Businesses wait for clarity
Neil Carberry, chief executive of the Recruitment and Employment Confederation, described the U.K. market as one of hesitation. Firms remain reluctant to expand payrolls until they gain more confidence in economic growth prospects.
“Permanent recruitment has been low for two or three years now, and it hasn’t quite come back [since Covid-19],” Carberry told CNBC. “Businesses are just, like, sitting there with a hand over the button … they can see what they’re going to do, they just want a bit of confidence to do it.”
