While job hopping might not be the best long term career move, it can definitely pay off in the short term.
It’s fairly common knowledge that the average Millennial changes jobs once every 18 months. There are plenty of theories as to why: Millenials are disloyal, entitled, or bore easily.
However, I think the answer is a lot simpler: you make more money when you move, and over the years that can add up.
Let’s Check the Numbers
According to Aon’s annual survey on salary increases, the average annual pay raise is 3% a year. Meanwhile, according to LTS, the average bump in salary from switching jobs is between 8-10%.
Looking at it from an annual salary perspective, job hopping can make a big difference. Take three folks who all start out making $40,000 a year: a job hopper that moves every 18 months, another person who moves once every three years, and last, another person who never leaves their job.
By the end of 10 years, the stalwart employee who never changes their job will get 10 years of 3% raises, and take home a little under $54,000. Our moderate friend, who changes jobs every three years and acquires three 10% bumps, will be making around $65,500. More than a $10,000 increase, nice!
So how about our fearless job hopper? After 10 years and six new jobs, our job hopper is sitting at just under $80,000, nearly $15,000 above our every-three-year mover and a whopping $26,000 above our permanent employee.
From a percentage standpoint, the person who never changed their job increased their salary by only 34%, while the person who changed their jobs every three years increased increased their salary by 64%. The job hopper has increased their salary by nearly 100%.
We haven’t even talked about total income: by the end of 10 years, the person who never changes their job earned $512,000 total, the three year mover earned $565,000, basically adding another year to their salary, and the job hopper has made $638,000, and is now 2.5 years ahead of the person who’s stayed at the same company the whole time.
So I Should Start Looking for a New Job, Right?
Well it depends. And personally, here’s where I disagree with the data, at least what’s presented here. I think that everyone has their own value systems, and if yours is maximizing your income, then you should definitely consider the advantages of changing jobs every year or two (literally).
However, I think you also need to consider what you’re missing by not staying very long at each company (the opportunity cost). By staying at a company for a few years, especially one that’s growing rapidly, you can be exposed to leadership opportunities or other parts of the business. If you’re job hopping and want to maximize your salary, you’re more likely to stay in the same type of role.
It’s easy to discount exploration over the money from job hopping initially, but if you end up discovering something you enjoy much more and identifying a career your passionate about, then that’s much more valuable than a short term salary cut.
Furthermore, if you’re more passionate about something, you’re more likely to end up being more successful at it over time, and the rewards for being at the top of your field are much greater than being simply better than average.
My advice: Play the Long Game and Move When it’s Genuinely a Better Opportunity
In your career you can optimize for title, salary, responsibility, and job satisfaction. I prefer to optimize for the latter two over the first two, but I know that I might be sacrificing the first two in the short run. However I believe that by focusing on the latter two, and by seeking out opportunities where I can learn new skills I’m interested in, I can maximize all four in the long run.
That’s not to say that other folks might not ‘need’ the money–I know each one of us has our own values, priorities, and responsibilities. However, I also know that too many folks fall into the rat race of focusing too much on salary over choosing a path they’ll be happy with in the long term, which in turn motivates them to treat their unhappiness by spending, resulting in a negative spiral.
Job hoppers might win the first 10 years from a salary perspective, but as they continue to advance in their careers (or bop around) they’ll also face the potential headwind of being labeled as a job hopper. After all, why would a company hire you over another applicant when they know you’ll be gone in a year or two?
For these reasons, I advise against job hopping just for the salary. I do recommend keeping your ears and eyes open, and waiting for the right opportunity to develop in your career and invest in your long term success.