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Are You Paying A Price For Company Loyalty? Why You Should Embrace Job-Hopping Culture

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jobhop1 2

Millennials just can’t win sometimes.

The stereotype of the working millennial typically includes the image of an ambitious 20-something with a penchant for cold brew who is constantly switching jobs.  The data on whether millennials are job-hopping more than previous generations is mixed, but it is becoming normalized, and despite what cranky Gen Xers might say about it, it’s not a bad thing.  

Strategic job-hopping can be a crucial step in getting a better salary because employees who stay loyal to one company for longer than two years get paid 50 percent less than their job-hopping peers.

Are millennials really job hoping that much more?

A study provided by LinkedIn says millennials job-hop more than older generations, but this only include the information that users report on their profiles. Older site users probably wouldn’t go all the way back to their first jobs in their profile history, especially on a website that has only had public user profiles since 2006.

Conversely, the Bureau of Labor Statistics reports that Baby Boomers job-hopped in their youth just as frequently as millennials do now. The study tracked the careers of about 10,000 Baby Boomers since 1979 and found that on average, they changed jobs a dozen times between the ages of 18 and 48.

Disloyalty pays

Why would something so common be thought of so negatively? Most likely because it’s a headache for companies to constantly be replacing old employees and retraining new ones, but despite the stigma, the numbers show that it’s totally worth it.  

The average annual pay raise an employee can expect sits at about 3 percent, but the current rate of inflation in the United States is about 2.1 percent. So when you account for inflation, you only make about 1 percent more per year as a reward for your company loyalty. However when you negotiate your starting salary at a new job, on average, you can expect a pay increase between 10 and 20 percent.  

Why are people who jump ship rewarded?

Unfortunately, this is another echo of the great recession. Recessions generally let businesses get away with freezing their payroll based on market trends. As a reaction to tight times, this is understandable, but these temporary reactions have a tendency to become permanent once put in place, and the trend has become a marketplace norm.  

Takeaway

If companies want to retain their staff, they’re going to have to relax the tightening of belts they’ve been doing since the recession and start giving 5 percent annual raises again. Otherwise, 45 percent of employees report that they plan to switch jobs after less than two years, and they’ll just have to get used to the idea that people are going to move when the price is right. It’s been true for generations that it pays not to get too comfortable at one job.  

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