Hopping from Job to Job to Find the Best Salary and Benefits in Today’s Workforce
BY: AUSTIN ANDRUKAITIS ON FRIDAY, FEBRUARY 08, 2019
In today’s super competitive workforce, CEOs and managers fret about retention rates, struggling to find employees that will stay with them for decades, like workers did mid-century. Economists frequently discuss job retention rates as a problem as well. On the other hand, millennials in the job market don’t see job hopping as a problem. Instead, it’s a way of life.
According to Forbes, “job-hopping millennials are more likely to earn a higher wage, develop their career on a faster track and find a better fit in work culture by changing jobs more frequently. The stigma is lessening as the positives are revealed.” The job market has fluctuated since the internet boom in the early ’90s, and as companies figured out how to accustom themselves to the introduction of high-technology, there became less of a focus on staying in one position.
The United States workforce has always worked harder than any other country in the world, with more extended hours, tougher jobs, and no room for long lunches and vacations. Is it any surprise that millennials and the part of Generation Z that’s entered the workforce are consistently job-hopping? It’s been a long time since people have worked in the same career their whole lives, but now more than ever, people find themselves having to go from company to company to collect the best salary and give themselves a better title. Once you reach a top position, you keep it. These two factors are the reasons recent generations have to go from company to company to receive a higher salary.
The Associated Press released a poll in 2016 finding that more than 40 percent of baby boomers stayed with their employer for more than 20 years. At least two-thirds of those that remained with a company for that long also had a pension plan in place. Now that companies are offering pension plans less and less, workers have less of an incentive to stay in one place. Not to mention advances in technology have created careers that past generations couldn’t begin to understand. With the ever-developing job world, there’s bound to be changes in how employees build lifelong careers.
The Quick History of Career Building in the US
According to the Future Workplace “Multiple Generations @ Work” survey done in 2012, 91 percent of millennials are expected to stay in a job for less than three years. This has currently been disproven, as employees are now averaging more than four years with each company. Still, this is a remarkable change for our era, considering that those who entered the workforce just a generation ago were able to stay with one job for the majority of their adult lives. Entrepreneur.com found “the latest data from the Bureau of Labor Statistics found that between ages 18 and 28, millennials held an average of 7.2 jobs. In comparison, baby boomers held an average of 11.9 jobs from age 18 to age 50.”
At the same time, history shows that with every industrial revolution, the rates of job tenure change. At the turn of the 19th century, economists expressed equal concern about job force tenure rates as individuals stepped out of their farms and homes and embarked on new careers provided by the technological shift. The Great Depression rattled those numbers in the 1920s and both world wars. After World War II, soldiers returning from the battlefield found themselves in a more stable job market in a booming world economy, with businesses offering competitive salaries and lifetime benefits.
Cost of living rates allowed the next several generations to continue this pattern. Housing prices, improved worker-management relations, improvements due to union activity, and stock market stability all contributed to the security of job positions.
The internet boom hit in the 1990s, bringing a high rate of change in the economy with it. Although the economy remained in good shape, many new companies opened while others closed, causing a panic, and a demand for skilled technological workers increased, drastically shifting the way companies do business and what positions they are filling. This was the first time in recorded history that job tenure fell so sharply. With another economic dip happening in 2006, job markets changed once more, rattling job tenure rates. While some industries plummeted, others rose in their place, and that’s supposed to happen in capitalism. According to Pew Social Trends, employment in knowledge-intensive and service-oriented sectors, such as education, health, and professional and business services, has about doubled. Underlying factors such as globalization, outsourcing of jobs and technological change are among the fundamental forces contributing to the transformation.”
A 2016 study by the BLS found that the job market stabilized enough that millennials are staying at jobs an average of 4.6 years, up from 3.5 just a few years before. As companies are learning to grow with technological advances, they can provide more secure positions for employees.
Now, most employers offer a 401(k) rather than a pension plan. This serves as a retirement fund that employees can take with them as they switch jobs in the future. This also gives workers freedom they’ve never experienced before. In the past, to receive your pension plan, you had to stay with your company until retirement age. When more people opt for a 401(k), it shows that individuals are adapting to the change in the market, and the new generation is prepared for this shift.
Another reason workers are so eager to jump ship is that many millennials grew up watching their parents get laid off as companies shifted their focus, and no longer set as much importance on loyalty to employers. “Millennials saw what happened to their parents and friends during the 2008 Great Recession, and they aren’t as eager to put in 20 to 30 years with a company as were previous generations, explains Brett Good, senior district president for Robert Half.
Why Job Hopping is More Effective
There are hundreds of reasons why the job tenure rate fluctuates, according to the Department of Labor Bureau. Companies are willing to give a new employee a high salary off the bat, under the economy and inflation, if the individual negotiates the offer correctly. On the other hand, the same company usually has limits on the raises that they give. A lot of companies are unwilling to raise employees more than a certain amount every few months, or every year. So those who were hired, ten years ago, for example, have a much lower salary than their newer compatriots. Medical and other benefit packages are also waning, says a Pew Social Trends study, which leaves millennials struggling to find a job that they can stay put in. Individuals are unwilling to let themselves stay in positions that are undercutting them, and if other companies have open positions that better suit their needs, they will happily make a change. The older generations have started to understand this as well and are also beginning to adjust to the new way of life.
The brand new freedom of job switching isn’t a bad thing. It’s making the economy more competitive and helping large companies adjust to new roles and new technology. Bringing on employees that have experience at various companies is beneficial, as these companies benefit from the same skill sets. It’s also forcing more companies to consider how they treat their employees.
The same way that providing attentive customer service retains clients, creating a stable work environment where workers are compensated fairly and provided with the benefits they need to live their day-to-day lives means positions millennials are more than willing to stay in for decades. "Employees are motivated and feel valued when they're given positive reinforcement and shown how their work contributes to the success of the business," said Dominique Jones, former chief people officer at Halogen Software. Feeling fulfilled in a particular job role plays a big part in deciding whether to stay or go and is almost as important as salary and benefits. Workers need feedback, praise, and a positive working environment.
In a competitive economy, people need to feel like they are learning skills that will advance them through the ranks. Aaron Harvey, founding partner and executive creative director of the New York-based digital agency Ready Set Rocket says leaders need to switch perspectives, according to Entrepreneur.com. “While you're investing in employees' goals, you must also accept that you are further building their capabilities and credentials,” stated Harvey. “This increases the likelihood that they may entertain a title jump to a competitor.”
Job Hopping Facts vs. Rumors
As generational gaps clash in the workforce, economists and business experts struggle to overcome old-fashioned notions about job switching.
Understanding the Rules of Job Hopping
Just like anything, there’s “good” job hopping, which is switching roles to advance levels of career, learn new skills, and earn better pay. Then, there’s “bad” job hopping, which is switching jobs every few months due to a lack of interest, or conflicts. There is still such a thing as having too many jobs, and it’ll raise a red flag during the hiring process. Employees should consider the reasons their employees switch jobs often. By understanding your employees’ motivations you can better set up your company for future endeavors. For those looking to change, before you start switching paths, consider these five rules for good job hopping.
1. Stay in a role for more than a year, ideally, around two to three years, depending on the position. No future employer can blame you for staying a short time in a beginner or temporary job role, especially if you secured a better spot afterward. At the same time, having ten jobs in ten years if off-putting to employers who are looking for long-term help. If you switch jobs carefully and with the intent of advancing your career or yourself, then taking on a new position is a good idea.
Tip: If you’re simply bored, try switching fields altogether to avoid having to change jobs every few months. Take on some side gigs to discover what you’re good at, or love doing more than your current role.
2. Take your time. When looking for a new job, don’t directly jump on the first offer that’s on the table. Sometimes, companies offer amazing pay because the job description isn’t entirely accurate, and the job requires a lot more effort than they’re willing to pay for. Explore your options, read reviews, use Glassdoor to your advantage, and find a company that agrees with your cultural and work-to-life balance needs in addition to the right salary and benefits. If you’re experienced in your field, you should have no problem getting through several job interviews. Be honest with the recruiter and see if the company is a fit for you before hopping on the train.
3. Look to grow. You can’t get a job without experience, and you can’t get experience without a job, so what’s the solution? Take roles that challenge you and are willing to teach you new skills. You can always take those new skills further. Companies are happy to hire you if you’re honest about wanting to learn new techniques that they have to offer, as long as you’re willing to stay there for a few years and play a role before moving on to a higher rank. Bigger companies have more opportunities for promotion, so if you’re interested, tell them right away.
4. Look for companies with high tenure rates. Before accepting a job offer, take a look at who works at the company. Using LinkedIn or other social media, you can tell how long certain employees have worked for that company. If their current staff is staying for long periods, it’s likely that it’s a good work environment and somewhere that you can seek stability as well. Beware of businesses with high turnover rates – it could represent problems with management or opportunities.
Tip: Don’t be afraid to ask your interviewer how long they’ve worked for the company and where they started. You can also ask other employees that you meet along the way. They’ll appreciate the interest and understand that you’re also looking for a company where you can stay for more than just a few years.
5. Be honest with your recruiter. Now that companies are less opposed to job hopping, and more companies than ever are going with outside hires, there are plenty of opportunities, so be honest about what you’re looking for in a job. In addition to telling the recruiter about your skills and how you can benefit a business, tell them what you need out of a job. It’s the best way to avoid having to switch careers every few years. Explaining why you’ve turned roles is also a practice in honesty. Many are hesitant to speak about it, but if you tell your recruiter what you learned, how long you were there, and that you left because there were no learning opportunities left, that’s something they’ll understand and appreciate.
As the job market now adjusts to millennials, hiring practices will continue to change. Millennials now make up the most massive bracket of the workforce, forcing companies to start reevaluating the way they approach their employees. Knowing how to sell yourself without undercutting your value is probably the most critical skill in landing a role that you can stay in for a long time.
Creating the Right Work Environment for Employers
As a manager or CEO, the retention rates rest with you. Surveys have shown that a poor work environment and unappreciative management are significant reasons as to why employees jump ship quickly. Luckily, there are a few actionable steps you can take to help your business withstand the changes.
1. Create an online network to help new employees start quickly. If your new employees are only going to stay in the company for a few years, it’s essential to get them up to speed soon. Technology allows businesses to handle turnover rates smoothly. An online network keeps track of documents, job roles, etc., everything a new worker needs to hit the ground running.
2. Tap into employee ideas. Just as your employees expect praise and feedback, you should heed their advice and thoughts as well. If an individual comes up with a winning strategy, allow them to teach your other staff members. Not only will that person feel their value go up, but your other employees will also appreciate learning a new hack. For you, this means continuity. Even if your best employee leaves, your other workers can keep going the way they always have. This also means your clients will continue to receive excellent service, ensuring that they keep coming back. Joe McCann, founder, and CEO of San Francisco-based tech company NodeSource is a big fan of this technique. He says, “when that person leaves, it hurts for a bit, but by then the other members of the team possess enough of those skills that we come back stronger.”
3. Focus on developing your employees. Just because you know an individual employee will want to leave in the future doesn’t mean you shouldn’t focus on teaching them everything you know. Create what Minneapolis-based eco-smart irrigation company Conserva Irrigation calls “a lily pad,” for your employees. This means creating a comfortable place for them to grow and develop. If they’re consistently challenged and learning new things, they’ll stay on longer.
Don’t dismiss job hoppers when they walk into their office. With the proper preparation, your small business can learn to handle the shift in employee-employer dynamics the same way that larger enterprises have. Companies are about people. If you treat your employees with the same attitude as you do a trusted client, they’ll be a lot more likely to stay within the company. When hiring job hoppers, consider the valuable skills they can add to your workplace. It’s always a learning opportunity, and your company benefits from the change in workplace tenure rates.