Let’s take two professionals with made up careers. Let’s call them John and Bill. They both started with the same company, in the same job, in the same location. John stayed with the company for the past 12 years in the same position. His base pay was $75,000 twelve years ago. He has received the average merit pay increases of 2.5% for 6 years and 3% for the second 6 years.
Bill on the other hand also had the same base pay of $75,000. He received the same merit increases of 2.5% and 3% over the same 12-year period; only in Bill’s case he received a promotional increase of 15% by moving to another company for a higher-level position every 4 years: So 3 job moves in 12 years.
You do the math. Over their careers, with everything being equal, Bill would probably have twice the income and double the money in the bank more than John if they both saved all increases. Plus, Bill would have a career advantage, as his promotions would have leveraged him three levels above John with the opportunity to continue to advance. John would be in a career stall and not very attractive within the current job market.
Life is never that simple, however. For Bill, he needs to build in the cost of moving, transition issues for the family, the risks of a new job, unknown bosses in the future, stability of the new company and so on. Each of us needs to understand the implications of our career direction.
Job-hopping every year or so is not an attractive alternative. However, selective job advancements can be advantageous both in upward career movement and money in the bank. What if you’re stuck in a rut like John? A few thoughts:
1. Move to a comparable job within the current organization to gain functional exposure
2. Find a way to contribute to generating revenue or reducing costs. You’ll be noticed.
3. Join a board of directors of a non-profit organization: Again, exposure
4. Join associations or conferences to meet potential bosses and hiring organizations
5. Research what’s going on in other markets, industries, companies and functions
If you change jobs, never move for less than 10%. It’s about a break-even event unless it can accelerate you for further advancement. Once you’re in an organization your increase in compensation will be in a defined bandwidth. It’s only with a promotion does the bigger bucks come to you. The greatest opportunity for financial growth is when you’re recruited into a new organization, whether internal or external. Organizations tend to pay for talent on the way in (15% or more) but usually keep that same talent in a 2 to 5% level to keep them “happy”.
Whether you decide to stay put, test the market or move on, you’ll need to understand the implications of your decision. Keep your eyes open for the most advantageous opportunity and determine what’s in your best interests over time. You are your own best advisor.
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