Millennials are often portrayed as disloyal job hoppers always looking for the next best thing. But maybe you should be job hopping even more.
Employee loyalty doesn’t mean much today. In fact, those who stay with the same company for years tend to see lower pay growth than people who move around. In other words, it doesn’t always pay to stick with the same company for years. Find out how switching careers can increase your earnings over time.
Job hopping can lead to a higher salary
Millennials represent the most highly educated generation to date and they’re working in the most productive economy. But unfortunately, that doesn’t mean they’re the most highly compensated.
According to American Progress, the median 30-year-old in 2014 earned the same amount of money as a 30-year-old in 1979.
But there is something you can do to increase your salary. Switching jobs is one of the best ways to boost your income, surprisingly enough.
The ADP Research Institute found that workers aged 25 to 34 saw pronounced salary increases from full-time job switching. In comparison, people who stayed in one company saw sluggish income growth.
Just how much does employee loyalty slow down wage growth? According to Forbes, staying at the same company for more than two years could cut your lifetime earnings in half — an estimate that they claim is conservative. The longer you work, the lower your salary could be compared to your job-hopping peers.
Annual raises might not be enough to boost your income
Instead of renegotiating your salary every few years at a new job, staying with one employer forces you to rely on annual raises for a pay bump.
You may only see small, incremental increases to your baseline salary. Annual raises may even be disappearing from the equation, according to the Resolution Foundation.
While a 4 percent yearly raise was once common, now many workers don’t see any salary increase. Those who are getting a raise may not be keeping up with inflation either. With a 2.1 percent inflation rate, a 3 percent raise is, in effect, only a 1 percent bump.
If you started out with a $55,000 salary and got a 3 percent annual raise, you’d be making $63,760 after five years. But if you found a new job, you could potentially increase your income by that much or more all in one go.
People who stay in their jobs long-term are at risk of seeing their earnings stagnate. If you start somewhere new, you could hook an entirely new baseline that’s a better match for your skills and experience.
Millennials aren’t moving around as much as you think
Millennials have a reputation for jumping ship whenever a new opportunity comes along. But the Resolution Foundation found that people in their twenties and early thirties are actually opting for job security. In fact, people in the generation born 10 years earlier were more than twice as likely to switch companies.
Job security certainly has its benefits, but it can also go hand in hand with stagnation. Before committing to a company, find out whether it’s also committed to you. Ask how the company plans to support your professional, personal, and financial growth.
How can you boost your earning potential?
All this data, of course, doesn’t mean that you should run out and quit your job today. Nor do you want to move around so often that potential employers see you as a flight risk. But the research does suggest you shouldn’t feel guilty about leaving a company in pursuit of a higher-paying opportunity.
If your job doesn’t offer much professional or financial development, it could be time to look for new opportunities. As you look, research salary information on a site like Payscale to get a realistic sense of your earning potential.
By gathering data, you’ll be better equipped to navigate salary negotiations and you’ll know when a company isn’t measuring up to its competitors.
If you’re looking to increase your income, consider acquiring new marketable skills. General Assembly and Dev Bootcamp, for example, offer continuing education programs. Their classes train people for highly-paying careers in tech.
Is switching jobs right for you?
Salary isn’t the only factor when it comes to choosing a job. Starting a new job can be risky and stressful, and you also want to prioritize personal fulfillment and professional development.
There are lots of factors at play when it comes to job satisfaction. But if a low income is holding you back, consider what you can do to increase your earning potential.
Whether it’s learning new skills or changing companies, you can put yourself in a position to make more money.
Check out this article for more ways to market your skills to new employers.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Rates (APR)||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!|
|2.58% - 7.25%||Undergrad & Graduate||Visit SoFi|
|2.99% - 6.99%||Undergrad & Graduate||Visit Laurel Road|
|2.57% - 6.32%||Undergrad & Graduate||Visit Earnest|
|2.57% - 6.49%||Undergrad & Graduate||Visit CommonBond|
|3.11% - 8.46%||Undergrad & Graduate||Visit Citizens|
|2.56% - 7.82%||Undergrad & Graduate||Visit Lendkey|
Student Loan Hero Advertiser Disclosure
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.