Does job-hopping pay off?
April 23, 2008 by Jim GiulianoPosted in: Hiring, In this week's e-newsletter, Latest News & Views, Money, Retention and turnover
It’s a simple question: Are people better off climbing the ladder with one company or switching ladders by jumping to another employer? The answer depends on a couple of factors.
First, let’s look at the cold statistics.
At the end of 2006, Chicago-based outplacement firm Challenger Gray & Christmas surveyed 3,000 mid-level managers who had changed employers that year across a wide variety of industries.
The results: 92% said they ended up with equivalent or better salaries, benefits, and titles. That’s the highest percentage in the 10 years the company has been doing the survey.
So the answer to the original question is a resounding “yes!” Well, maybe not.
The magic 5%
The company also pointed out that 2006 and 2007 were years of low unemployment – mostly under the magic 5% figure that economists use as the dividing line between a labor shortage and a labor excess. What’s more, the unemployment rate among people with four-year college degrees was a tiny 1.9% in 2007. So the real answer is: supply and demand. Job-hopping usually pays off when unemployment is low, and the better educated the hopper is, the better the chance that hopping will pay off.
In fact, the survey shows a correlation between low unemployment and signing bonuses and fat raises for those who make the leap from one company to another.
Tags: challenger gray & christmas, Management, salaries, unemployment
April 28th, 2008 at 1:36 pm
“Job-hopping” is not always a choice. Telecommunications companies used to be the industry that could “make-or-break the economy in general. I remember hearing the saying; “when Hi-tech is hurting – everyone is hurting”. Meaning, when the computer software companies and telecommunications companies were “down-sizing”, it precipitated a glut in the housing and retail industries. The chain reaction of such events involved hospitals and banks, as well.
I have been in the workforce for 30+ years in Massachusetts. In my experience, it would have been nice to be employed with a company that could stay in business for more than 5 or 6 years. That could help employees to be better able to “climb the ladder of success” with the same employer!
Lastly, whenever it was necessary for me to collect the unemployment benefits from any company I was with – there appeared to be just as many “degreed” workers standing in unemployment lines as often as non-degreed personnel.
April 28th, 2008 at 2:16 pm
It would be interesting to know the statistic on how many of the 92% actually made it with the new company. Did they job hop again or even worse, were they fired, because they didn’t cut it. Perhaps that is the reason why companies do not have a very high longevity rate. Our system makes it easy for someone to leave, collect unemployment and look for greener pastures.
April 28th, 2008 at 6:57 pm
I find this very troubling. When I read all the books, articles, small bits of information that help me find and retain good employees I act on that good advice. It is very difficult as a business owner to trust problems will be solved for fellow employees, managers, and most important CLIENTS. Putting into practice all the best tools of treating employees right, giving them great opportunities, paying them what they are worth only to find some will be influenced by this type of behavior is upsetting to any employer that cares about their employees, their clients, and their business.
Something I found with an employee that handled their professional career this way was concerned they were viewed negatively by prospective employers because they jumped around too much. When concerned about what goes on a resume it can get difficult. How do you answer why you worked so many places and why did you leave? The answers can be troublesome. Even worse, if you can’t include a place of employment how do you answer for the gaps of time in your employment record? As one who hires employees these issues are lokked at very seriosly. I for one want to steer away from those that do not look like longer term employees.
April 29th, 2008 at 1:40 pm
I touched on the subject in one of my previous blogs. My take on job-hopping is basically “if the shoe fits, wear it”. Job-hopping can provide an enlightening experience for individuals when they first enter a career field. It can provide them with contacts of various degrees and backgrounds, as well as give them a broader range of work experience more quickly than one company may provide. The full blog article is at http://tiny.cc/ZMh7O. Naturally, leaving several positions without notice or respect for the employer will not work out favourably, but it is possible to job-hop with good intentions. And for you business owners out there, if you’re selecting your employees properly and treating them right – you have nothing to worry about.
September 24th, 2008 at 4:18 pm
Typically, an employer can expect to keep someone about 3-5 years. Based on exit interviews I have conducted, many leave for better money but not always. If an employer wants to keep someone, it goes a long way when the boss says “I want you to know that I really appreciate your help.” I have seen many bosses and owners become miserable after an employee left but alas, they never told that person how much they were appreciated. Later on when I bump into the ex employee he might say “If I’d known how much the boss really appreciated me, I might have stayed.”