Why You Should Change Jobs Often

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BearMoney Team

BearMoney Team

BearMoney is the balanced finance blog for new and old Canadians alike. We are a team of people living international that research, write, and share

Job Market

We have all had that moment in our lives, when somebody tells us to walk into a business, ask for the manager, give a firm handshake and you’ll get a job. We all roll our eyes at this Boomer logic, quickly dismissing it as old fashioned nonsense. It is easy though, to feel smug about understanding that this method of job hunting is dead. What everybody needs to realize unfortunately, is that the job market always changes, and the ‘rules’ of today are jokes and eye rolls of tomorrow.

HR is becoming a Frankenstein’s monster of automation, old fashioned knowledge, and ‘novel’ new recruitment methods. You only have to look at the use of prerecorded video interviews and resume scanning tools to realize that the recruitment world is at a crossroads. In our opinion human resources (and recruiting in particular) is reaching its ‘kindle moment’.

Experts in the field think the new methods will completely change the game, like the kindle would kill physical books. That, however, didn’t happen.

The current corporate world has two core problems, a huge volume of applications for roles and retention problem for mid-career professionals. Both of these boil down to a single challenge though, how do you keep a 22 year-old worker long enough to still be with your firm at age 30. While small firms can be agile and keep talent, the big boys rarely have enough tools and more importantly discretion to use them.

The reason this is so challenging is that young professionals are increasingly more mobile, flexible, and aware of the working world that they inhabit. This inevitably leads to ‘job hopping’ where people stay a couple of years and different places/roles before moving on. This can be an expensive problem for companies and they are acutely aware that after a certain point of value most employees can leave and get hired elsewhere quickly.

Despite what your parents told you however, job hopping is not bad for your career. In fact, job hopping can be a key tool to find the ‘right fit’ for both you and your employer. It is the dream of every recruiter to be able to place a highly trained, happy, and experienced employee quickly. So what makes job hopping the pathway to career improvement.

man and woman holding each other s hands as a team
The Corporate World Is A Crazy Place

Corporate Culture Values ‘Good Enough’ More Than They Admit

The private sector is not more efficient than the government. I know, shocking right? Ask anybody who has worked in a Fortune 50 company and a government if the bureaucracy and inefficiency is any different. Indeed, I think we all know that when we owe the IRS or CRA money, they are very efficient. The point is that companies have goals to achieve, and the bigger the companies are the more scope there is for wastage so long as goals are being met.

For you, the employee, this means one primary thing, you are paid the minimum amount necessary to give the minimum amount of productivity and value. In some companies this can means $200,000 a year to work 80 hours a week, in others it means $50,000 to work Monday to Friday, 9-5. You are hired to perform a function and you are always going to be paid based on the value of that function.

Yes your salary will likely grow in line with targets but this is always going to be in line with growth. That means your relative value to your employer stays constant over time.

If you are promoted or change roles your value could increase significantly. However, your value as an system administrator at 2 years is likely going to be similar to your value at 5 years. No matter what your company might say about innovation or synergy they are going to take the most standard route to profit goals 99% of the time. If they are meeting targets it is good enough. Similarly, if you haven’t left, whatever they’re paying you is good enough.

If you are competent your company’s goal is to keep you ‘not unhappy’, paid under market rate for your skills but above what you started out with. Big companies don’t care if cogs fit in different wheels, they are only going to pay you for your primary function. You might potentially add value in ten areas, but you’re paid for the areas laid out in your contract.

If you don’t have three tier promotion pathways laid out in front of you, you’re not going to grow at that company.

abundance bank banking banknotes
You normally aren’t paid market rate for your job

Job Hopping Builds Wealth

Following on from the first point it is becoming more and more a rule of the corporate world that changing jobs is better for you financially. Strategically job hopping can net your double digits raises over staying still. This is especially true in sectors calling out for experienced professionals with varied skillsets, such as ICT. Taking the 10 year look of a young persons career the most probable scenarios are as follows:

Staying Still – Role A > 7.5% in raises by year 3 >15% total by year 5 > 30-40% by year 10 with a promotion

Job Hopping- Role A > Role B 10% raise by year 3 > Role C 20% total raise by year 5 > Role D 50%+ raise by year 10

Why is this the case? It goes back to the idea of minimum effort on the part of your company. If you leave you company to go to a new role, your new employer has not had to input any costs in training you or building up you experience. You are in effect a brand new asset for the company that performs higher functions. This is worth anything from 10-50% for an employer as you are effectively ‘plug and play’ for whatever role you are being hired for.

Whether it is some weird quirk of psychology or a conscious plan, your old employer will never pay you market rates for your experience. It might also be a genuine disconnect at the strategic level between recruitment and retention. There is also the possibility that you are ‘better’ than your role description and your employer knows that they can hire somebody ‘good enough’ for cheaper (including recruitment costs).

Whatever the reasoning, if you were working a standard $50,000 office job at age 20, sticking where you are could leave up to $20,000 a year on the table by the time you are 30. That’s not small potatoes.

confident senior businessman holding money in hands while sitting at table near laptop
Nobody is getting the gold watch anymore

Benefits Packages Are Getting Worse

The ‘handshake generation’ of jobseekers had it made. They earned more, for less productivity, with better benefits. What did this mean at ground level? It meant that there would be little difference in 1970 between job hopping and staying in place. You could get a decent salary that likely had both built in raises/bonuses and and a pay rate that would allow you to invest your way to wealth.

In addition it was easier to reach later life goals such as owning a home or starting a family. Retirement benefits were also very well put together with defined benefit schemes guaranteeing a certain level of income. These schemes are like unicorns nowadays (although access to self serve investment has never been easier).

Newer ideas like remote working, ‘unlimited vacation’ and dedicated professional development budgets have been put in place to make up for these losses. Spoiler alert, they don’t. If there is no long term payoff for your loyalty it’s not worth sitting around in the same firm for three decades.

In the same way, the future retirement is going to require you to manage your own money and have a stand alone plan outside of anything an employers does. Matching a 401k or RRSP is a nice touch but it’s nowhere near as generous as in the golden years.

Depending on your stage in life then, you should be hopping around to the company that offers the best chance at realizing your long term goals in terms of retirement and family benefits (e.g. healthcare). If you’re a younger person you need to squirrel away as much investment potential as possible.

Young People Are More Mobile

While some sections of society might still look down on job hopping even after the earlier points, there is one consistently relevant factor, varied experience increases your value, even in a niche market. Young people are spending less time than older workers in jobs. These changes offer great opportunities to learn new hard and soft skills.

While there is a risk of changing too quickly and missing out on consistent training, your peers will likely have moved around a bit too. This will put you at a disadvantage for jobs that are broadly based most definitiely. People with the same experience across different industries will have a leg up in interviews against people who stuck to one. The same is also true for niche areas where a certain level of technical knowledge is usually needed. If you can continue working in the general landscape of your niche skill, experience in multiple firms/areas with mark you out as an interesting candidate.

This is also something that a lot of leadership and management positions look for, varied and progressive experience. Job hopping to take on new challenges and gain fresh insights is very valuable even on a personal level. With it fast becoming the norm you will likely stand out negatively if you stay stuck in place.

Of course, it’s not always bad to stick in one place, especially if you can take on new challenges and grow. Just ensure that you don’t stagnate.

cute dog in glasses yawning on bed
It’s important to not burn out

Job Stagnation Leads To Unhappiness

Not everybody loves their job, this is a sad fact of the universe. The majority of people are probably just ‘ok’ with whatever work they do, with colleagues and environment making it better, or sometimes worse. The very small percentage of people who love their job either a) have a deep love for repetition or b) experience a lot of variety in their roles.

You find this a lot with emergency services workers, who, despite extreme levels of stress, also derive extreme levels of satisfaction from their roles. This is because they have varied and tangible results when they are performing their duties. A fireman might save a person, clean up a chemical spill, or get a cat down from a tree. A database administrator is just going to type things into cells and boxes all day.

Working with people provides a lot of variety, but even that can drag you down eventually. A lot of customer facing roles have repetitive procedures that experience minor change over long periods of time. If you are not able to take on more stimulating work, you’re going to end up stressed and unhappy (it doesn’t have to be Rockstar stuff, just more). If you are stressed and unhappy your health and career will definitely suffer.

Job hopping offers new environments (internal or external), new challenges, new people, and also bedding in periods where everything is new and exciting/confusing. By taking on new challenges at regular intervals you are meeting your highest need for self-actualization. If your role doesn’t allow this, it might require a job hop to meet this need.

Stop job hopping eventually
It’s important to know when to stop

When To Stop?

So we’ve made the case for job hopping, but surely there has to be some sort of stopping point right? Well, that depends.

For the first ten years of your career you should aim to change jobs or significantly change roles internally about 3-4 times. Your first roles should last you up to 2 years but ideally 1 year. You should then try to graduate from entry level work to progressively more challenging and well paying roles. It is up to you to decide when but generally every 2 years you should dip your toe in the job market and see if you can do better. Even if you are happy you should make at least 1 big career change within your first 10 years.

You might end up returning to the perfect set up but you definitely need to avoid becoming stale and institutionalized.

In addition, you should also plan your job hopping around the stage of life that you are looking to enter. If you want to settle down at 25 go right ahead. You will likely be looking for a good benefit, work/life balance and stable job earlier that people that want to stay single into their 30s. It is great to chase more and more money but stability also plays a role when you no longer have just yourself to consider.

It goes without saying that you should also stop job hopping if you find your absolute dream job that you love going into every single day. These roles are rare and the fact that you love it is very valuable. It is also possible to remain in whatever industry this is and get more stability, work/life balance etc. In this case you are performing a balancing act of internally ‘role hopping’ and retaining the magic that first brought you to the role.

Whatever your situation, you should only stop hopping once you find a role that exceeds your needs, and allows long term personal growth. This might that 10 years, it might take 4, so you better hop to it!

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7 Responses

  1. Job hopping can definitely increase your salary, mostly because it forces places to pay your market value or more. That being said, I had to push but ended up doing very well in the same place for 12 years. 🙂

  2. Great post, Dan! I felt like you were telling my story here to some level. I actually did job hop quite a bit early in my career, switching to a different company four times within six years. I’m happy to report that it worked out great for me, with my salary shooting by 400% within those six years. Now, in my 30s, I have found a more stable job that I see myself staying with until I retire in 5 more years at age 39.

    1. Thanks Christian, those are great results from moving firms especially as you were able to top it off with a stable job to see you through the final stages. Beach by 40!

  3. Bear Money, this is a great article on the advantages of changing jobs every few years. I wish someone had written something like this for me 10 years ago. I looked to my Boomer father for advice, and he said as you would say. Plus he was always against wage negotiation as well.

    This subject is becoming a great one to discuss. The numbers and advice is something that a lot of people should hear.

    You really have enlightened me into thinking when I am off to look for a new job next. This is some great info!

    Thank you so much.

  4. I completely agree BearMoney! People are often too scared to change jobs or believe they owe some kind of loyalty to their company. It’s total B.S. You can keep changing jobs and increase your salary every time. I really enjoyed the point you made about how benefit packages are dwindling. That’s so true and not many people notice that.

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