Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less
The worst kept secret is that employees are making less on average every year.
I made the mistake of becoming a manager about 4 years ago. This is one of the most frustrating parts of the job. If you have a good relationship with your team they’ll usually tell you something like “I’ve been getting contacted about other offers, here’s what they’re offering.”
It’s usually about a 20% bump. I’ve not once been able to convince the company I’m at to match it. Usually the best I’m allowed to do is something like a 5-6% raise in the next salary increase cycle.
I’ll usually know for 2-3 months a team member is leaving before it actually happens because of this. Of course, if I’m allowed to hire a replacement they’ll let me pay market value.
Job hopping is definitely the best way to get a pay increase.
I just dont understand that logic
"Oh god, this guy wants a raise? Fuck him, he wont get anything.. but when he quits, hire his replacement at what he was asking for, or higher"
and they wonder why loyalty isnt a thing anymore
We cope by saying they hire a replacement who asked for more. The reality is they generally don’t. They either offload the work to the rest of the dept and go “oh look at that we didn’t need them!” as the group drowns OR they find a wide eyed, younger professional who will take a crap - or at least lower - salary.
This varies from industry to industry but it’s very common.
They're probably hoping to not hire a replacement at all
It all makes "business" sense for those who see employees as "commodities", i.e. all kinda equivalent and hence easilly replaceable with nothing lost when they're switched.
It's basically the MBA thinking of employees as just another "raw material" or "supplier".
The reality, more so in complex domains, is that employees have an adaptation and learning period when they arrive (unlike engineered devices, companies aren't standardized machines using standardized parts, so you a new "part" won't just seamlessly fit and start delivering full performance) and often never written institutional knowledge that goes with them when they leave.
However as those things are not easilly quantified and measurable, MBA types - being unable to add it to their spreadsheets - will simply ignore them rather than trying to balance such costs against salary costs: giving a decent salary increase (a guaranteed cost) will always look like a worse option in an accounting spreadsheet if its only counter is a sub-100% possibility that they might lose that employee (and, remember, since they don't count adaption and loss of institutional knowledge costs, that's listed there as costing nothing) and replace it with somebody else who might even be possible to get with a less "decent" salary (so, more than the current employees but less that a fair salary for the current employee).
Such approach works well if all companies are doing it and the probability that people will leave if they don't get a decent salary is low enough (which it probably is, since the majority of human beings favour stability over change).
It's a bit messy for the employer. You can't just hand out 20% raises every time someone threatens to leave. Then everyone would be threatening to leave. And that's a hefty cost to add to what's likely your largest operating expense. Also, that's not just 20% in the employee's pocket, there are additional costs like unemployment insurance and the like.
OTOH, unless your employee plain sucks or the job is simple, it's almost always better to keep them than train a replacement. Tribal knowledge is valuable knowledge.
And no, only very small-time employers expect loyalty. They understand the game, and we should as well.
Funny that lemmy whines and moans about capitalism all day, without realizing they can play as well. Jumping jobs over the last 11 years got me $14 > $22 > $39. Been at this place 5-years, thinking about jumping ship again. Probably put me over $100K with a little luck. Oh, and I've never had such fat benefits or worked less. From home to boot.
Related: When we first moved here, a friend started at an oil change place, well below his skill set and previous pay. Kept job hopping and stacking his resume, now he's the top service manager at the largest auto dealer group. He quit moving, guess he's fat and happy. Sure drags in the $.
Clickbait.
Article is nearly 10 years old.
Article contains no studies or surveys showing this result.
The 50% figure is calculated by assuming a paltry annual raise and consistent large pay bumps by switching companies.
That being said, word is that in the tech industry at least, hiring budgets are clearly higher than promotion budgets and that moving every 2 years or so is clearly the best strategy for career advancement.
Just one industry, of course, but the pattern certainly seems to have settled in there, and it may not be a stretch to speculate it will spread to other industries perhaps under the shitty influence of AI.
Every single time I see this type of conversation come up it's always about the more privileged higher paying white collar work.
In my shit experience, blue collar work is "get shit raises or take massive pay cuts." There is no "change job and also make more." I've been stuck in the same cycle for 15 years now... Every time I leave a job I get knocked back to the wage I made when I first started the job I left regardless of the new position.
But that's because only white collar workers are seen as people. Us blue collar workers are just meat machines that never deserve more than we were "bought" for and any new employee is automatically assumed to be as intelligent and skilled as a dead cockroach.
Well, it does match my own experience and observations (in Software Development in a couple of countries in Europe) going back to the 90s.
The shift to "no loyalty to employees and hence for employees being loyal is a net negative" was around the point when companies started refering to employees as "human resources" and IMHO, resulted from the increased use of MBAs in Management, which in Tech happenned aound the early to mid-90s (though it dependend on country and the actual Industry making heavy use of IT).
Mind you, at least in IT and even all the way back then, it was already a good idea to move places at least once in one's career because people who worked all their life in one place don't really know any other way of working than the one of their place, which is limiting for one's professional growth (though plenty of people did manage to just keep ticking up on salary purelly on age-seniority even well after they stopped improving as professionals) because no one company has "the right processes" for everything.
Personally I actually think it's healthy to move companies at least a few times in one's career, but my point here is more about one's career and income growth stalling (and pretty early on, too) if you don't move companies.
That said, I'm talking about expert and in high demand career tracks: I don't really know if in the kind of jobs were the bean counters basically see employees as commodities there is any significant benefit from job-hopping, unless it's job-hopping into a different kind of job.
That said, it would interesting to see what the actual numbers are, although I'm sure it will vary a lot between industries and jobs and other factors. Anecdotally it sounds correct but that could just be true for some trait of my social circle, or some other bias about mentioning pay or something. Or just that people tend to be more likely to change jobs when they are underpaid, so the pay jumps from changing jobs seem bigger since the job they're changing to will be closer to the market, whereas well paid employees will stick around and maybe not notice the gradual pay increases as much.
I'm glad forbes put the date in the URL otherwise I probably wouldn't have noticed and come back to the comments.
Old article, but it’s certainly true in my industry. Having said that, I’m a bit conflicted with this at least for my own personal situation.
I’ve been with my current employer for a decade. I’m sure I can get a significant pay bump if I switch, but I’m in a comfortable position where I think the trade off is worth it. I earn enough to support myself and my wife on a single income. Work from home, unlimited PTO, and the job itself is not super stressful that I get good work/life balance. My manager and teammates are awesome. The company has great benefits and lots of perks.
I’m at a point in my life where I no longer want to be “challenged” with work. Meaning, I just want to clock in, do work, clock out. I don’t yearn for promotions, new challenges, and moving up. I just want to get paid for work I’m familiar with and good at, and focus my energy on my personal life. And my current job allows me to do that plus all the perks mentioned. So the question is, will I be willing to potentially sacrifice all the comfort I currently enjoy to get paid more? Sure, there’s a chance I could get a better paying job AND all the same perks, but that’s not a guarantee and I will never know until I’m working that new job. Also take into account all the effort required to learn everything on the new job and having to “perform” to impress as a new hire.
But who knows, it might come to a point where my current pay is no longer enough. Only time will tell.
But how did you get there?
I think job-hopping helps people who still need to climb the ladder until they land some “senior” position into which they can settle in, safe in the knowledge that they can always find another job elsewhere with their experience.
This article is more than 9 years old.
And still nothing has changed
My wife and I skyrocketed in our careers. How? Between 1997 and 2008 we did exactly the opposite of what our parents recommended and kept hopping jobs. My longest stint at any one place was 18 months and hers was two years. When we realized that our skill sets were too expensive and rare to waste at a single project, we started our own consulting firm and continue to cycle through projects regularly.
Remember, whether you are self-employed or employed by someone else, you ultimately work for yourself. Act accordingly and guard your self-interests.
It still applies today.
Yeah, I did a double-take when I got to the part about expected wage increases for 2014. I suspect it's much worse now, and was interested to see what Forbes was printing about that as at least these days they're notorious for posting stuff with an anti-labour focus. I can't imagine they'd post an article like this these days.
That said, I'm sure this article is more relevant than ever now and it's a damn travesty that this is what the labour market has come to since the 70s/80s.
I'm on the executive team for a small business that my family bought almost two years ago. Many of us had worked there for years beforehand and absolutely weren't paid what we were worth. As soon as we took over, we started to raise wages across the board (other than sales, who are our own little 1% due to the structure we inherited). Wages are still far from where we'd like them to be, but we're trying our best with the resources at hand while we navigate these first few years of ownership. Shit's not easy for a lot of small businesses and I get that many small business owners are outright taking advantage of their staff. We actively try not to (granted, in the Marxist sense we inherently are) but I realize that most of our staff deserve more than we can currently afford to pay them.
I used to be one of the “loyal” ones but around covid time I decided to see where I could get by doing this. Since then, and three jobs later, my salary went from around 66k to now 105k. Current gig seems cool and a cake walk, so may stick around a bit.
Same! There was a shortage in IT for a little while and I took advantage of it and got a $30k increase! With same benefits and paid vacation.
Now even a 2% pay raise is significant on the salary I make. I feel like I'm finally being appreciated and paid what I'm really worth after a decade of struggling.
Yep, I jumped ship a year ago and got a $50k increase! I also get a yearly bonus up to 10% of my salary. Feels good man.
Preach. You gotta move to get paid. I have no idea why people would think their current employer would just throw them a gigantic increase.
It's funny when I put in my notice in my last job and why, they magically had money to counter. Like where was this cash when I was closing difficult tickets and completing projects?
This sucks for the general public. You're always either going to be dealing with a] a disgruntled employee who knows he deserves a raise or b] an under trained new guy. You never get the one who knows the job really well.
Negotiating with your current boss is significantly more difficult than negotiating with a future prospective firm, because your future prospective firm doesn't have the power to fire you.
It's 10000x better in the blue collar world because right off the bat you're assumed to be as useless as a person can possibly be so you either do the futile argue for a raise (which never matches what you should get) or you take a huge pay cut when finding a new job...
I've been stuck in the same cycle for 15 years now... Get shitty raises for 5 years, get burned out and bail, take massive pay cut, prove my worth to get back to shitty wage I left for but am now burned out again, find a new job and take another massive pay cut etc etc... adjusted for inflation I make as much now as I did 10 years ago...
These articles are always about white collar work. :(
Unless you have a union job, then you're making the same thing as anyone else with the same experience as you and you've got benefits and probably job security 👍
Yeah I love being in a union. It's 👍
Confirmed 👍 and Im not top rate yet
Or, as my omniscient relatives and neighbors who have on countless occasions provided unsolicited commentary on my career would say, "a nice stable job, why don't you ever stay in one place?"
This has been well documented for at least a decade.
Meanwhile, employers feign concern over turnover but know it's a better bottom line and their bonus to let employees with standards leave than to do the right thing.
Well, it's different if you work for good companies. I've stayed at my last 3 jobs for well over 2 years each and my career is going great, making twice as much money as I need. IT / technical stuff. 6 years at one, 4 years at the next, currently at 3 years with current.
I've never lasted that long at any former employer though. My shortest employment was half of one shift at a factory, it sucked so bad I left on my first lunch break. The moral of my story is that it's OK to stay with a good company, if you can find a good job like that. Experience counts for a lot towards getting hired to these good jobs.
Article is old but I have often heard this anecdotally. I have known a number of people over the years who changed jobs every 1-2 years, because they said it's the only way to get ahead salary-wise. I suspect it's a lot harder to pull it off now, tough. There's a lot of fake job postings. Not to mention running the gauntlet of submitting your resume 300 times to get auto-rejected 299 times by some dumbass AI where a clueless HR person typed in the criteria prompt. "A young person with at least 30 years of experience who knows ALL the latest technology but will work for less than a landscaper per hour thanks bye".
P.S. I'm not shitting on landscapers. They do real work, unlike most office drones like me.
The job hunt is much less annoying when you're already employed though. No real rush, and you can be very picky.
Before covid I switched jobs. Got about $12k more. Months go by, COVID hits and I can't do my job (didn't have the flexibility and daycare was shut down). So I get my old job back but said I'd do it for $X where X was another $10k above from the new job.
Switching jobs definitely works. It sucks giving up a sure thing and the comfort zone though
It sucks giving up a sure thing and the comfort zone though
Very much. It's also kind of a privilege to be able to do that. Often this requires mobility - which you don't have if your spouse is also working (could not find a job in the same place) or if you have kids (school, friends etc). I think in the USA it is very common to constantly move, but here people usually avoid moving too often. Taking a risk when it's not just you on the line is also a bit harder.
Ha.. This is true.
There's only been one company that I had worked for almost 4 years. Every company I've ever worked for, on my second year I check the job market, if it looks good I start to submit my resume with the goal to get job offers that offer either more pay or more PTO/sick time/holidays (more time off combined). Take my job offer, present it to my employer, then just leave to the other org because more than likely I'll have a target on my back when it comes time to cut employees / lay off.
I wonder how this looks when compared to a decent union shop. In union shops you probably tend to not move jobs a lot, or like in some trades you take your union creds with you no matter where you work.
You certainly can increase pay by jumping around a lot in regular work, but union gigs tend to have set progression based on seniority.
Unions periodically renegotiate their salary and benefits through broad company-wide contracts, so its not just a single small bean asking to be paid a bit more. Its an entire department or firm demanding a bigger percentage of the gross revenue.
Seniority solves a lot of the "how much money do I even ask for?" questions when renegotiating salaries. It also establishes a clear-cut cost of living track. You know what you'll be making in five years, so you can buy a house or get married or have kids with some underlying expectation of how much you'll earn when your cost of living goes up.
Well, yes…I’ve been union for decades so I’m quite familiar. This comment is helpful to summarize for some people a bit of how unions do things, but when I originally commented it was more a question about how the two compared as far as earnings. Do you have to constantly jump around non-union jobs to keep up with union wages? Will the mobile employee outpace union wages? At what rate? Overall lifetime earnings? My understanding is that union gigs for comparable jobs may not offer high pay off the bat, but over a lifetime often do better than non-union with wages, benefits, and retirement. However, some normal jobs will allow you to jump right in to good pay relative to a union gig but you may not advance much in pay or have to leave to advance.
10 year old article might be off juuust a smidge
You are right. It is probably much worse these days.
By changing workplaces twice I tripled my income in under 2 years. The biggest thing that happened is that I was promoted to a much more senior position 6 months into the middle workplace, but they screwed me on the salary thinking that because it was a big bump from my lower position it would keep me around.
So I did that job for a year and got hired for the same job elsewhere for a 50% pay increase.
I've moved to a couple different employers over the last few years obtaining all kinds of skills, most of the companies went down or moved to cheaper labour countries.
My wage has been stagnant for the past 10 years. It's all bullshit anyway, they just fuck with you just to fuck with you.
Don't worry if you're Canadian - wages don't go up here unless you're in a good good union, or crack upper management.
There may be a few industries where job hopping is worthwhile, but there's a kilometers thick crust of nepotism to crack if you don't have connections
Eh, at some point you find a place you like and stop worrying so much about getting 20% more in another job
Then you realize, since your raises no longer even keep up with inflation, your current job is now underpaying you - making it more difficult to hold on to what you do have.
There are definitely reasons not to change jobs constantly. It kind of depends on industry.
Finding a new job might mean you need to relocate, which is inconvenient and becomes harder if you own a home or have a family.
There is also always a risk that the new company’s culture or your new boss are bad. It’s not something you can really know for sure until you switch, but if they aren’t good, it might not be worth the extra money.
It also takes time to ramp up and figure out the way things work. Being new in a job kinda sucks for a lot of reasons.
Your current job might offer something that is hard to find elsewhere like flexibility to work remotely when you want, or free food, or a good 401k match.
Some benefits take time to accrue and starting over at a new company might mean starting over on benefits accrual. For example, some companies increase vacation days based on years of service. Same goes for other things like percentage of 401k match. You might also miss out on claiming the full 401k match that you’ve earned at your current job if you leave early depending on vesting schedules.
Some companies have better job security than others. A new company might pay more, but also do regular layoffs. If your current company is fairly stable, it might not be worth it to move to one that does more layoffs.
Your current employer might pay close to top of market already. It could be hard to find another employer that actually would pay you more, and even if they could, it might not be worth the little extra for all of the other above cited risks of changing jobs.
While not focused on exactly the same topic, this HMW video has some intersection and gets into the nitty of what's going on.
It also means the employers hosed themselves, since skilled labor is not threatened by a potential firing (the way they once were) and are continuously looking for their next rung on the ladder elsewhere. Also, it means promotions are no longer an incentive for hard work, since the workers expect you to hire from elsewhere. So all those incentives to overperform are gone.
PS: Curiously in The Sims 2 (a 2004 game) I figured out the best way to get rich legitimately (e.g. without using cheats, and not getting an Open For Business storefront, was to swap careers whenever you reached the top tier of a career ladder while sustaining necessary skill and friend minimums. The sim would get promotions every day of work, including a fat bonus, and I could finally afford that pre-built dream-house I made.)
I keep on getting fired. I also usually get a dramatic pay increase with each new job. Still pisses me off.
We just have a fully open system based on age, experience and seniority.
No discussions, no begging or threatening to leave, but also just industry median salary.
I have stayed for 6 years now.
The public sector model, there's definitely something good about knowing exactly where you are and where you're going, only a problem when the scale is totally off of whack with current CoL etc.
That's empirically testable in my case. Same employer's for ~10 years, went from £13k per annum to almost £30k. In the next 10 years, I went from £30k to £85k. Software developer, in the UK.
Yeah this sucks for people like me that just want to do a good job. 30 years and finally making some money but not goood money.
I’ve been fortunate. With same company for 12 years and am above market rate enough that I dont care to look elsewhere.
I've been mostly working at startups since I graduated and I haven't had a job for longer than 2 years once I stopped delivering pizza for Papa John's and driving for Lyft. My pay is pretty good but it's kinda balanced out by the amount of time I've been unemployed.
Tarifvertrag with Entgelttabellen says no
Incidentally it can also work at your existing company. I’ve gotten 5 promotions in 6 years and my salary is 120% more than when I started. It’s less the company hopping part and more ensuring you grow in your career. I’ve found that it’s definitely about stating your desires (having a clearly defined “this is where I want to go in my career”), volunteering for the random projects your boss or their boss needs done and showing you want to grow.
That only works if you have managers that give a rip about helping you grow and compensating you well for that growth, which sadly, most people don't have.
In my experience, staying at the same place and taking on more "growth opportunities" was just an excuse for management to throw more on my plate without compensation increases. Sure I would get a little raise sometimes, but it was always pissy amounts of money, even when I asked for more.
I started jumping jobs aggressively and magically my pay exploded upwards. I now have basically zero loyalty to the companies I work for, just like they have for me. Contract work is even better for this, but the downside is usually you have bad or zero benefits.
This article could've gotten paid more if it hadn't stayed on forbes for nine years and instead jumped publishers.