Changing jobs is often a stressful experience. Applying, following up, interviewing, and negotiating take a huge amount of time. It can be even more stressful if you already have an existing job. You can only take so many doctors appointments before your current employer get suspicious that you are interviewing.
Even though the process of getting a new job can be stressful, it often pays off in the long run. Switching jobs is one of the fastest ways to move up in salary and position. For those of us pursuing FIRE, the difference between a 4% raise and a 20% raise over time is massive. It could shave years off of your FIRE date. Let's go through some of the numbers and examples on why you should consider switching jobs to get that next big jump in pay.
The average American gets a raise of about 3-5% a year. Your specific situation may be more or less, but on average this is what a working American will get. Getting raises is always welcome, but over time it means you are getting underpaid. Studies have shown that if you switch jobs every 2-3 years you could be making nearly 50% more at the end of your career than someone who stays with one company. This is a massive difference and could mean hundreds of thousands of missed income.
The job market for millennials is vastly different than previous generations. People aren't staying at jobs for nearly as long and job security seems to be a thing of the past. It is now even more important to take charge of your career and build a path that works for you. This isn't to say that you shouldn't show any loyalty to an employer. Just be aware of what your market value is, what your trajectory is, and what other opportunities might be available. Statistics show that company loyalty is increasingly rare so keeping your value in mind will go a long way.
Outside of the possible salary increase, there are some other benefits of changing jobs.
If you are switching jobs often, chances are you are keeping your skills sharp. Skills is a purposefully vague term meaning "something that helps you do your job well". With the job market changing so rapidly, staying sharp is key for staying employed. Knowing the latest coding language or piece of software can give you the leg up on other candidates.
Think of job interviewing as a skill as well. Knowing how to present yourself, talk with possible employers, and keeping your resume sharp are all useful. In the event of layoffs, downsizing, etc. they will be skills you are thankful you kept sharp.
This one is a bit fuzzy, but switching jobs keeps you in the driver seat of your career. Knowing you have the skills to move elsewhere can give you the confidence to build upward trajectory in the workplace. You are no longer beholden to waiting for management to give you that promotion, asking for that increase, etc. Having control means know you possess or are working towards the skills needed for the job you want, not the job you currently have.
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Anytime you switch into a new company, there is a risk. You can only learn so much from your interviews about the company. A company might say they are a strictly 9-5 company, when in reality people are staying late every day. You could also start and find out that you might not be a culture fit for the company.
To mitigate this risk, try to talk to past and present employees if you can. It can be difficult to find someone to ask about how the culture really is. A good proxy is to look at Glassdoor and read the reviews. Be mindful that the reviews might be biased, but you can still get a picture of what the working environment might be.
If you are switching jobs often, some employers might be wary of hiring you. Some employers see people moving jobs as a risk that the employee will leave after they have invested time into you. I think think that the "job hopper" stigma is going away as changing jobs become more prevalent, but it is something to be aware of.
In today's job market, I think that as long as you stay at a company for an 18 month minimum you should be fine. Most research suggests switching 2-3 years and . These numbers could be adjusted a bit depending on your industry as well.
"Strive not to be a success, but rather to be of value" - Albert Einstein
Running through a quick example let's assume we have two people:
Both people start with the same salary of $50,000. Let's see how the numbers play for Person 1
Over the 10 years, Person 1 makes just over $600,000 in total salary. Now let's see Person 1's chart:
Even without consistent raises, the person who changes jobs every 3 years still comes out nearly $70,000 ahead. In 10 years Person 2 has just about doubled their salary whereas Person 1's salary has only grown by 42%. By the first time Person 2 has changed jobs, they are already making more than Person 1. If getting a 25% raise seems too large, it is actually a conservative estimate. It is actually suggested to shoot for 30% when you change. Even with the conservative estimate, you come out well ahead. In later earning years, raised only get amplified as the numbers are bigger so you can expect the changes to grow over time.
If you are risk averse, like you job, or just don't feel like looking that is totally fine. All we are trying to show is the changes you could expect to see in your income if you entertain the idea of changing jobs. There are obvious caveats to this (salary ceilings, demand for job, etc.) but it is something to think about.