Researchers have suggested that the longer you stay in the same company, the less money you make over time.
Recession, inflation and a demand for tailored employee skills are just some of the factors continually shifting the job market. To minimise the impact, many employees have resorted to job hopping.
While experts have warned against its detriments, studies have shown something intriguing.
Employees who stay in the same company for more than two years get paid 50% less, a study by Forbes revealed. The study was carried out by comparing the average wage rise to the wage rise an employee gets when moving jobs. This was compared over a 10-year period and included the rate of inflation.
In South Africa, salary increases in the formal sector were estimated to have gone up by 5.6% at the beginning of the year, while the Consumer Price Inflation rate is estimated at 4.4%. If, best case scenario, you’re an outstanding employee who’s received an increase of say 4.5% for your performance, in essence your salary has only been bumped by 1.2%.
Although this percentage increase is more than what economists initially predicted, during difficult economic times, management can decide to enforce less pay, which an employee can do very little to change.
On the other hand, if you decide to leave your job for greener pastures, you’ll be in a better position to earn more money. In fact, depending on your experience and the industry you work in, your salary can increase quite substantially.
Staying in the same company for longer does have its perks too; moving into senior management positions, leadership opportunities, stability and increased benefits. However, the limitation is that your annual increases will be usually based on your current salary. In addition, there is only a limited amount that your manager can boost your salary by as your increases are based on your salary. By contrast, if you jump ship, you can usually request a higher salary.
The same issue is evident in job titles as well. A number of companies have a limited number of promotions they can award each year. If you’re in the same company for years, it may be harder to move up the ranks because you may be waiting in line with other employees who should have been promoted before you, but couldn’t due to the limit. In contrast, if you apply to a different company, chances are your skills will be matched to the title you’re applying for and the company will take you on with a new title.
Yes, you may be worried that moving from one job to the next will reflect negatively on your CV. And the truth is job hopping does not appeal to all employers. In addition, it can hamper your quality of life, and the stress levels that come with job hopping can affect your mental and physical health. For such reasons, it may be a good idea to stick out your job for a couple of years.When all is said and done, you are the captain of your own ship. If your career plan is to achieve your goals and to take a step up the ladder, the responsibility is with you to make decisions that will boost your career in the right direction.