As a child, my only work goal was to find a job and stay at that job for as long as I could to earn more money. I thought that the longer you worked with the company, the more raises you would get, and you would make more money. Well, to my surprise, it turns out that the opposite is true. In fact, according to Cameron Keng, if you stay with a company for longer than two years you will make up to 50% less money over your lifetime.
People working in America are changing jobs more now than ever. The reason is that people are not getting significant raises that compensate them for their skills. They learn the skills, get some experience and then apply for a new job with a better title. The cycle continues until they find a job that they feel is compensating them enough. According to USA today, in 2014 the average raise was only 3%. Cameron states that the current inflation rate is 2.1% according to the Consumer Price Index. So a 3% raise is really only worth about a 1% increase in salary.
More of a Raise Starting a New job
So how much is the raise when you start a job with another company? Well, according to Cameron, when a person leaves a company for another job title, the average raise is 10%-20% increase in salary. In some cases, some people even make 50% when they start at a new company. With the economy improving and more companies starting up, we are at an advantage as a job seeker.
“The world is desperate for skilled labor and companies around the globe are starving for talent. Companies can tout technology replacing labor, but it is only exacerbating the global shortage of human capital and skilled workers. This means that we as employees are positioned better than ever to leverage our abilities for increased pay.”
What does this mean for you? If you are a skilled worker, you are likely to find a job earning more money. If you can hone your skills and become excellent at what you are doing, then you will always find a job and make more money. He uses Jessica Derkis as an example:
“Jessica Derkis started her career earning $8 per hour ($16,640 annual salary) as the YMCA’s marketing manager. Over 10 years, she’s changed employers five times to ultimately earn $72,000 per year at her most recent marketing position. This is approximately a 330% increase over a 10 year career. Derkis’ most recent transition resulted in a 50% increase to her salary. Derkis’ is a great example of how “owning your career” can make a huge difference in your income and career path.”
The Other End of The Spectrum
On the other end of the spectrum, some hiring managers won’t hire a person who doesn’t have a lot of time at past jobs. If they see an employee who only stays at companies for a few years, then they won’t hire them. I personally think it just depends on who the hiring manager is. Some hiring managers will see the value that you bring to the company and figure a few years of work is worth the value you provide. Perhaps they think you will plan on staying longer, whatever the reason is, you finding a higher paying job is going to be reliant on the hiring manager and the values that hiring manager has.
So why don’t companies just pay employee’s more to stick around and continue to provide good work? Well, Cameron says that “most companies are not equipt to rapidly promote and reward their best employees for a variety of reasons such as office politics.” Some companies just can’t afford to give raises to everyone as rapidly as they deserve them. Good employees understand this and do what is best for themselves.
Before you jump ship, ensure that you have the skills for a new job or job title that you want. Leaving a job can be stressful, and you may regret it if you work at another job that may pay more, but doesn’t share the values that you have. Do a personal assessment of how happy you are at your current job, how much debt you have, and if you are in a good position to leave the company. If not, leaving may do more harm then good.
What type of employee are you? The long term loyal employee or the kind of employee that tends to jump ship?
Let us know in the comments