Forbes magazine has undertaken research and found that employees who ‘jump ship’ every two years and find a new job, will, over their working lifetime, earn double that of the loyal worker who remains with the same employer for many years.
How can this be?
Well the average worker in 2014 will receive a 3% pay rise but if you subtract the effect of inflation, that works out to only around a 1% raise. However, employees going to new jobs will often receive a pay increase of 10% to 20% and possibly even that promotion that they could not get at their old job.
Forbes says the problem is that, particularly due to the long recession, many companies have introduced pay freezes.
Bethany Devine, a Senior Hiring Manager in California’s Silicon Valley who has worked with many Fortune 500 companies told Forbes: “I would often see resume’s that only had a few years at each company. I found that the people who had switched companies usually commanded a higher salary
“The problem with staying at a company forever is you start with a base salary and usually annual raises are based on a percentage of your current salary.
“However, if you move to another company, you start fresh and can usually command a higher base salary to hire you.
“Companies competing for talent are often not afraid to pay more when hiring if it means they can hire the best talent.”
Bethany went on to say that promotions work in a similar fashion. Quite often there is a ‘waiting list’ for promotions and that can stall advancement. But if you take on a new job and you have the relevant skills then you may be able to jump straight into a promoted position.
Brendan Burke, Director at Headwaters HW, agreed, saying that “companies turn over great employees because they’re not organisationally strong enough to support rapid development within their ranks.”
However, Christine Mueller, President of TechniSearch Recruiters, said that some of her clients “will not consider anyone who has had more than three jobs in the last ten years, no matter the reason.” Even so, Ms. Mueller still recommends that an employee change jobs every three to four years in order to maximise their salary. So, the question is less about whether employees should jump ship, but how long they should wait before jumping!