Money Like You Mean It by Erica Alini

Author:Erica Alini [Alini, Erica]
Language: eng
Format: epub
Tags: BUSINESS & ECONOMICS / Personal Finance / Money Management
ISBN: 9781459748699
Publisher: Dundurn Press
Published: 2021-10-30T00:00:00+00:00

Sources: Current Population Survey, Bureau of Labor Statistics,

and Federal Reserve Bank of

Atlanta Calculations; 12-month moving average of monthly median wage growth; hourly data

But there’s another important question to address: Even in good times, does job-hopping lead to better pay in every industry? The answer may be no.

A 2018 study by salary-comparison site PayScale found that frequent job-switching could backfire in certain roles.3 The analysis used more than 300,000 salary profiles to compare similarly experienced employees who had been in their current job for less than a year to those who’d worked at one company for 9 to 10 years. The data showed very different trends for different jobs. Software developers and staff accountants who’d never quit turned out to earn 10 percent less than the job-hoppers in their field. But operations managers and administrative assistants who had stayed put were earning around 20 percent more than new hires. For nurses, there wasn’t much of a difference between job switchers and job stayers.

The author’s hypothesis about what’s behind the divergence is interesting. “The advantage of switching employers is that your wage gets reset to the market rate, but it comes at a cost: you lose the internal knowledge and relationships that make you effective at your company,” wrote Chris Martin, then director of research at PayScale. “For some jobs, like operations managers and administrative assistants, this internal knowledge is critical to success. However, software developers and staff accountants skills are transfer-rable, so organizational know how is less important.”

If you’re wondering whether you should job-hop, you might want to consider the general state of the economy and what’s happening in your industry. Are employers desperate to hire or flooded by resumés amid high unemployment? You should also think about how much — or how little — the organizational know-how Martin speaks about seems to matter for career progression in your role. Does it pay to be an insider?

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