For most of the last decade, I was in full-time employment with a multinational corporation. Four different multinational corporations, to be precise. Why? Because with every two and a half years that have passed, I’ve made a conscious decision to move on.
This process doesn’t get easier – leaving behind friends and the comfort of routine, starting the learning process again someplace new. But I continue to move on because I believe the benefits far outweigh the short-term discomfort.
Job-hopping offers bigger salary increases, richer career experiences and a sense of reinvigoration when things have gone stale. It’s hardly surprising it’s become so popular among millennials.
What Is Job-Hopping?
Before we move to my more detailed case in defence of job-hopping, it’s worth setting out a definition. While there isn’t an established definition, job-hopping is conventionally seen as spending a period of less than two years in a job before moving on to another job.
I’d like to be a bit more specific for the purpose of my case here. Job-hopping, as I define it, is moving to a different organisation after 1 or 2 roles in an organisation, usually every 2 to 5 years. That is sharply contrasted with switching jobs much more frequently, such as every 6 months, which simply raises alarm bells of prospective employers. I’m not for a second recommending such an approach here.
The Benefits of Job-Hopping
With a definition in place, let us now turn to the benefits that underpin my decision to change organisations every few years.
#1: Bigger salary increases
The salary gains I’ve negotiated externally far exceed the salary gains I could yield through near-term internal promotions. Current employers’ knowledge of your salary can preclude them from offering increases beyond a certain percentage. A fresh external negotiation therefore offers far more upward flexibility.
But don’t just take my word for it. Bloomberg recently summarised extensive research from the ADP Research Institute, finding that job hoppers were realising annual gains of 5.3%, outpacing 4% gains for all private employees in the US. In the UK, ONS figures reveal a bigger gap: in 2018, median earnings growth for job hoppers was 7.3%, versus just 3% for those staying put. That gap has increased substantially since 2010.
Some specific contextual factors matter, though, such as industry and region. Technology, construction and professional service employees were realising the biggest gains in the US, up between 8% and 10% per year, while in leisure and hospitality the job-hopping formula appears to fall over. The UK data shows a similar skew towards higher-skilled employees, along with a regional skew towards (you guessed it) London.
Despite the contextual story in these figures, it’s pretty hard to dispute the overall picture. Job-hopping, on the whole, brings about higher year-on-year salary increases. And that benefit is just the start.
#2: Richer career experiences
The financial gains are, of course, high on my list of motivators for job-hopping. Without them I’m unlikely to execute my financial independence plans. But I also switch organisations because it’s career-enriching.
A new organisation brings new challenges and career experiences, working with a distinct range of stakeholders, building knowledge of a different industry, developing new technical skills. While some multinationals have excellent internal mobility and a broad range of roles to facilitate personal development, it’s hard to replicate the learning experience that comes with a completely fresh slate.
#3: The motivation reboot
Despite these benefits, it’s fair to say I’m not corporate life’s biggest fan. The routine can wear you down creatively and emotionally – and sometimes that in itself is ample impetus for a change.
The motivation reboot that comes from an organisation change is one of the central reasons for my job-hopping. As I’ve argued before on this blog, novel experiences can reboot our creativity and motivation in ways that the similar routines simply cannot. Changing organisations is an effective way to re-stimulate our brains and maintain our interest.
When Is the Best Time to Switch Jobs?
We clearly can’t cash in on these salary increases every few months. Employers won’t buy it. To appear credible to prospective employers, we need a sensible length of time in a previous role and organisation, and a clearly thought-out path of progression.
Data from ADP suggests the ‘sweet spot’ for job-hopping is 3-5 years, with gains in this bracket exceeding the gains from staying put for longer or jumping ship earlier.
Context, as ever, is everything here. The salient point is our career path must not reek of ‘flight risk’. Employers need to be convinced that you’ll stay and add value for a reasonable amount of time to the organisation. They’re not expecting a life sentence, but they are expecting a demonstrable history of staying put for a few years before jumping ship.
Other Key Things to Consider Before Job-Hopping
- Leave on good terms: “See ya, sucker!” isn’t a good look, not just because it’s unprofessional but because countless numbers of people move between the same large organisations. Leaving with a poor reputation may well bite you on the backside in a few years.
- Pension: Consider your current pension arrangements carefully. Many organisations require you to stay with them a certain period of time in order to retain the pension benefits (particularly with final salary pension schemes). Think also about future gains you may be giving up. Job-hopping shouldn’t just be based on near-term salary gains. You need to consider the impact of any decision on future earnings, as far as retirement.
- Location: We grossly underestimate the impact of a long commute on our health and happiness. Any decision you make to extend a commute should factor in both financial and emotional costs. If the new job requires you to move home, think carefully about the full cost of the decision to do so.
- Other Benefits: How does the full benefits package compare to your current role? The salary may be higher, but this isn’t the full story. Make sure you weigh up the full benefits versus your current package. Health insurance, life insurance, dental cover – all of these things add up.
- Your Happiness: Job-hopping isn’t for everyone, and sometimes the financial benefits of bigger salary increases aren’t worth the emotional cost. If you’ve found a job that makes you happy and fulfilled, you’ve found something hard to come by. Think carefully about giving that up.
Summary
- Switching organisations every 3-5 years can help optimise salary increases, enrich career experiences, and give a motivation reboot.
- The extent of these benefits depends in large part on your industry and location.
- To avoid flagging a ‘flight risk’ to employers, we shouldn’t change too frequently – i.e. more than 4 times a decade.
- Any decision to job hop should carefully consider how the full benefits package compares, the location, and most importantly, your happiness.
- Job-hopping is an effective way of increasing our salary faster, but it’s not for everyone, and shouldn’t supersede a career that makes you feel happy and fulfilled.
