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Can You Quit Your Way to Higher Pay?

People who switch employers regularly don't necessarily earn more than employees who stick around.

After graduating, a friend-of-a-friend landed a job at a consulting firm. Two years later, she had switched jobs twice and was making three times higher pay than her original salary.

Stories like this one are common enough that job hopping has become a popular life hack for boosting pay. Allegedly, when you regularly switch companies, you can get a raise every time and end up earning nearly twice as much as you would if you stayed with the same organization. There are plenty of good reasons to switch companies (such as better promotional opportunities or culture fit), but can you quit your way to higher pay?

Job Hopping Isn’t for Everyone

For this study, we used 310,872 salary profiles collected between 2014 and 2017 for five very different job titles: registered nurse, software developer, administrative assistant, staff accountant and operations manager.

In each of these jobs, pay increases with both experience and with tenure (the number of years you’ve been with your employer). For example, a software developer with 9-10 years experience earns 43 percent more than someone who has no experience, and an operations manager who has been with a company for 9-10 years earns 35 percent more than someone who was recently hired. These statistics miss the mark, however. To uncover whether job hopping is more lucrative than loyalty, we need to look at how a loyal employee’s pay compares to a job hopper’s for similarly experienced employees.

Do You Know What You're Worth?

Here we see how pay among workers with 9-10 years’ experience changes based on how long they’ve been at their company. Those with less than one year’s tenure are recent job hoppers, while those with 9-10 years tenure have worked at only one company. The bottom line: loyalty leads to higher pay for some jobs, but not all.

Software developers and staff accountants who have never quit earn 10 percent less than new hires, while operations managers and administrative assistants earn 21 and 19 percent more than new hires, respectively. For nurses, loyalty is neither a boost nor a drag on earnings.

Should I Stay or Should I Go?

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. For some jobs, like operations managers and administrative assistants, this internal knowledge is critical to success. However, software developers and staff accountants skills are transferrable, so organizational know how is less important. Wages for experienced software developers move so fast that companies struggle to keep up – seasoned developers can typically earn $9,600 more by jumping ship.

Employees: Do your research before quitting

Whether you’re leaving money on the table by sticking at your company depends on the labor market for your specific job. PayScale’s salary survey provides a personalized salary report, showing how other people with similar qualifications working in similar markets are compensated. You can use this information to decide whether you want to go on the job market this year, or leverage it in salary negotiations at your current employer.

Employers: Look to the market to set pay

For those who manage compensation on the employer side, there’s a lesson here, too: not keeping up with market rate compensation exposes you to retention problems. When policies peg compensation to an employee’s current comp level rather than to the market rate, that employee is likely to gain more by leaving your company than by remaining loyal. What’s worse, the employees with most to gain by job hopping belong to the most competitive labor markets. When you try to replace them you will be at a significant disadvantage if you cannot offer the market rate. In short, it’s better to pay the right way before these employees hit the road.

Chris Martin
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Christopher
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Christopher

Been at my job for 13 years and only one pay increase. Is this right?

djamila_st
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Thank you very much for these great, practical ideas. Like others who have commented, I need to create/revamp some portfolio examples. This article is very timely.

djamila_st
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This is one of the best articles I’ve read. Helpful. Informative. BEAUTIFUL

djamila_st
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Beautiful article, Thank you!

djamila_st
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I think this is one of the best blogs for me

djamila_st
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thank you charles. incredibly well thought out and stated.

djamila_st
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Wonderful content, we’re going to repeat this on our own blog. Many thanks for sharing.

ishaq_Technologie
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We thank you for all your efforts in editing the articles.
We wish you more progress in your projects that you publish on the web pages.

laoubi adil
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good topic thanks

walid kh
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Like i said my heart has always been clean n true for you i cant even think how life is gona be with out you n how im gona live it with out you by my side

djamila_st
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Great list and one I will be sure to pass along to all my clients and will be looking to incorporate some of them into my own use.

mariya
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Nice blog. Thank you very much

ziane.ziane
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Thank you for this article.

Ziane
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djamila_st
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Thank you so much for sharing this useful information, I was searching for this for last one month.

djamila_st
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Thank you so much for this inspiring article

Zizi
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We have benefited the subject thanks

djamila_st
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Thank you so much for writing this.

walid kh
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Thanks for sharing this post,

djamila_st
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Beautiful article.

tita
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djamila_st
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Zianez
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Many thanks to you.

Fatima
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Very good article!

djamila_st
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Beautiful article. thank you

djamila_st
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benazzi
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simon
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