The People Who Quit in January Decided to Leave in October
Every January, the resignations come in, and every January we treat them like weather. New year, fresh resolutions, people reassess, some of them move on. A bit of that churn is healthy and completely normal, and I am not going to pretend a company should keep everyone forever. Some turnover is the system working.
Here is the part we would rather not look at. The person who resigns in January mostly did not decide in January. They decided in October, or the November of a bad review cycle, or the moment a bonus plan told them what the company actually rewards. January is when they act. The decision is already old. And more often than we admit, the thing that made the decision for them was something we built.
I know this one from the inside, because I built it. Early in my career I carried a sales team on a quota that was pure top line, total revenue and nothing else. So I managed to it. I micromanaged, I chased the fast, easy re-orders that hit the number this quarter, and I quietly abandoned the slow work... new-customer development, coaching my people. Within about six months, most of my team had quit. Sales declined, I moved on, and the organisation had to rebuild. The plan rewarded "close fast," so I coached "close fast," and the people who wanted to do the real work left to go do it somewhere else. The compensation design did not just miss the point. It emptied my team.
Is January really the big quitting month?
Not quite in the way people say. There is no clean statistic showing a January peak in actual resignations in Canada. What there is, reliably, is a new-year surge in job searching. Robert Half's Canadian research heading into 2026 found about a third of employed professionals planned to look for a new job in the first half of the year, up from roughly a quarter the previous summer, with competitive pay and better benefits among the top motivators. The intent spikes with the calendar. The quitting follows, on a lag, from decisions made months before.
So January is not the cause. It is the settlement date. Which means if you only react in January, you are treating the receipt, not the purchase.
But if switching does not even pay right now, why are they leaving?
This is the question that should change how you read the whole thing. For years the story was simple: people leave for a raise, because switching jobs paid a premium over staying. That premium has thinned out. By early 2025, wage-growth data in North America showed job stayers finally matching or beating job switchers for the first time in well over a decade, in a labour market that had clearly cooled. Statistics Canada had job vacancies falling through 2025 and average wage growth running around 3.6% year over year. This is not a hot market pulling your people away with fat offers.
Read that carefully. If good people are still leaving in a soft market where switching barely pays, they are not being pulled by money. They are being pushed by something. And a push comes from inside the building. That is the uncomfortable gift of a cooling market: it strips away the easy excuse. You cannot blame a bidding war for the person who left to make roughly the same money somewhere calmer.
What is it actually costing you?
More than the salary you were protecting. Gallup estimates that replacing an employee costs between one-half and two times their annual salary once you count the hiring, the ramp, the lost knowledge and the drag on everyone covering the gap. So the compensation plan you kept lean to save money, the raise you did not give, the design you did not fix... those decisions do not save what you think. They just move the cost to a line you are not tracking, and make it bigger.
The honest nuance
I am not telling you to just pay more. That is the lazy version of this argument, and it usually fails, because a raise bolted onto a broken plan buys you a few months and then the same exit. Pay matters, and underpaying people relative to their market will absolutely lose them. But in a market where switching no longer pays a premium, retention is less a bidding war and more a design question. Get genuinely competitive first, pay people properly once you can, then let them share in the upside, in that order. What keeps your best people is rarely just a bigger number. It is a plan that rewards the work you actually want them doing.
What doing it right looks like
A few research-backed steps, learned partly by getting it wrong:
1. Audit what your plan rewards versus what you say you value. If it pays for fast and easy and starves the slow, important work, then fast and easy is the behaviour you will get, followed by the exit of the people who wanted to do more.
2. Separate the January noise from the signal. When someone resigns, find out when they actually decided. The pattern usually points back to the fall. Fix that cause, not the calendar symptom.
3. Get competitive, then pay properly, then share the upside. Do not lead with "just pay more." Lead with a plan that is fair and rewards the right things, and fund it as margin allows.
4. Reprice retention against replacement. A raise that keeps a strong performer is almost always cheaper than the one-half to two times salary it costs to replace them. Do that math before, not after.
5. Have the stay conversation before the exit interview. Ask the people you would fight to keep what would make them want to stay, while they are still in the building and it can still matter.
6. Believe the soft market. If people leave when switching does not pay, stop looking outward for the reason. The push is coming from something you designed, and you can redesign it.
The honest close
I emptied a team with a compensation plan I thought was disciplined. So I am not lecturing from a clean record.
Two things are true at once. Some January turnover is healthy, inevitable, and none of your business to prevent. And most of the people you lose in January were lost months earlier, by a plan or a manager or a review that told them exactly where they stood. The resignation is not the event. It is the receipt for a decision you could have changed while there was still time.
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In short
January looks like a resignation spike, but it is really the visible settlement of decisions employees made months earlier, and compensation design is often what made the decision for them. New-year job-search intent surges (about a third of Canadian professionals planned to look in the first half of 2026, per Robert Half), but the labour market has cooled: by early 2025 job stayers matched or beat switchers on wage growth for the first time in over a decade, and Statistics Canada shows vacancies falling and wage growth near 3.6%. That matters because if people still leave when switching barely pays, they are being pushed by something internal, not pulled by money. Replacing them costs one-half to two times their salary (Gallup). The fix is not "just pay more" but auditing what your plan actually rewards, getting competitive before generous, and repricing retention against the real cost of replacement.
Key takeaways
- January is a job-search surge, not a proven quitting peak: about a third of Canadian professionals planned to look for a new role in the first half of 2026, up from roughly a quarter the prior summer (Robert Half).
- The market has cooled: by early 2025, job stayers matched or beat job switchers on wage growth for the first time in over a decade, and Statistics Canada shows vacancies falling and wage growth around 3.6%.
- When people leave in a soft market where switching barely pays, the cause is usually internal, not a competing offer.
- Replacing an employee costs roughly one-half to two times their annual salary (Gallup estimate).
- The fix is design, not just dollars: get competitive, then pay properly, then share upside, and audit what your plan actually rewards.
- Have stay conversations with your best people before the exit interview, when it can still change the outcome.
Frequently asked questions
Is January actually the peak month for resignations?
The reliable pattern is a new-year surge in job searching, not a proven January peak in actual resignations. Intent to look spikes with the calendar (Robert Half), and the resignations follow on a lag from decisions often made in the previous autumn.
If job switching does not pay much right now, why are employees still leaving?
Because pay is not the only driver. When the market cools and switching stops paying a premium, the people who still leave are usually being pushed by something internal, a broken plan, a manager, or a lack of advancement, rather than pulled by a bigger offer.
How much does turnover really cost?
Gallup estimates replacing an employee costs between one-half and two times their annual salary, once you include hiring, ramp time, lost knowledge, and the load on everyone covering the gap. That usually dwarfs the raise or fix that would have kept them.
Should we just raise pay to keep people?
Underpaying relative to the market will lose people, so pay has to be competitive. But "just pay more" bolted onto a broken plan tends to buy only a few months. Fix what the plan rewards first, then fund fair pay as margin allows.
References
1. Robert Half Canada. Survey on 2026 job-search intent (December 2025). About one-third of Canadian professionals planned to look for a new job in the first half of 2026; competitive pay and benefits among top motivators. Company-reported survey. https://www.google.com/url?q=https://www.newswire.ca/news-releases/survey-one-third-of-canadian-professionals-plan-to-search-for-a-new-job-in-2026-864263988.html&source=gmail&ust=1789496041494000&sa=E
2. Pew Research Center. "Majority of workers who quit a job in 2021 cite low pay, no opportunities for advancement, feeling disrespected" (March 9, 2022). 63% cited low pay; 63% cited no advancement. Verified at primary source; U.S. data. https://www.google.com/url?q=https://www.pewresearch.org/short-reads/2022/03/09/majority-of-workers-who-quit-a-job-in-2021-cite-low-pay-no-opportunities-for-advancement-feeling-disrespected/&source=gmail&ust=1789496041494000&sa=E
3. Statistics Canada. Job vacancies, third quarter 2025 (December 16, 2025) and Labour Force Survey wage data (December 5, 2025). Vacancies at 492,500 and cooling; average hourly wages up 3.6% year over year. Verified at primary source. https://www.google.com/url?q=https://www150.statcan.gc.ca/n1/daily-quotidien/251216/dq251216a-eng.htm&source=gmail&ust=1789496041494000&sa=E
4. Atlanta Federal Reserve Wage Growth Tracker, reported in early 2025. Job stayers matched or exceeded job switchers on wage growth for the first time since 2010. Secondary reporting of a primary Federal Reserve series; U.S. data used as directional context. https://www.google.com/url?q=https://www.creditunions.com/blogs/when-it-comes-to-wage-growth-does-it-finally-pay-to-stay/&source=gmail&ust=1789496041494000&sa=E
5. Gallup. "This Fixable Problem Costs U.S. Businesses $1 Trillion" (2019). Replacement cost of one-half to two times annual salary. Company-reported estimate. https://www.google.com/url?q=https://www.gallup.com/workplace/247391/fixable-problem-costs-businesses-trillion.aspx&source=gmail&ust=1789496041494000&sa=E
Notes on sourcing: Robert Half figures are proprietary survey data and are labelled company-reported; Statistics Canada and Pew are primary sources. The stayers-versus-switchers figure is U.S. wage-tracker data used as directional context for the Canadian market. The Gallup replacement-cost range is a widely cited estimate, not a government statistic. This piece is general HR information, not legal or financial advice.
