A new survey shows employees who remain in the same job for more than two years will earn 50 percent less over their lifetime than people who change companies more frequently.
Workers can expect a raise of 3 percent in 2014, USA Today reports.
The bad news is that the inflation rate is currently 2.1 percent calculated based on the Consumer Price Index published by the Bureau of Labor Statistics, meaning your raise is small change and won’t make much of a difference, Forbes magazine noted.
The average raise a worker receives for leaving is between a 10 percent to 20 percent increase in salary. Of course, there are cases where workers get as high as 50 percent.
The reason loyal employees are punished for their dedication is that many business owners have been forced to freeze salary increases and payroll during the 2008 recession.
“The problem with staying at a company forever is you start with a base salary and usually annual raises are based on a percentage of your current salary,” Bethany Devine, a Silicon Valley senior hiring manager who has worked with Fortune 500 companies, told Forbes. “There is often a limit to how high your manager can bump you up since it’s based on a percentage of your current salary. However, if you move to another company, you start fresh and can usually command a higher base salary.”
“Companies competing for talent are often not afraid to pay more when hiring if it means they can hire the best talent,” she noted, adding that promotions work the same way.
Devine says if an employee waits and becomes deeply entrenched in a company, they may find a lack of promotions available because the line for a certain position is usually very long and the the firm may have already reached its annual quota.
“However, if you apply to another company, your skills may match the higher title and that company will hire you with the new title,” she says. “I have seen many coworkers who were waiting on a certain title and finally received it the day they left and were hired at a new company.”
Brendan Burke, director of business development at Headwaters HW, agreed, saying, “companies turn over great employees because they’re not organizationally strong enough to support rapid development within their ranks.”
However, Royce Leather CEO Andrew Bauer told Forbes that moving jobs can be “stressful.”
He encouraged employees to consider their “quality of life, mental health, physical health and better moral standards.”