Three dynamics are currently shaping the marketplace.
- Salary increases have been low over the past few years and have dampened merit increased to the 1-3% range. Outstanding performance may be in the 4-5% area
- The open job market has been brisk, but the skill sets, education or experiences come up short by those who have not kept up with the technological advances
- The shift in the supply/demand equation by industry has caused an imbalance. Declining jobs like retail, banking, journalism, and those that become automated are incompatible with high demand jobs like Occupational or Physical Therapy, Home Health Aide, Commercial Divers, Nurses, Physician Assistant, and those that are technology-driven.The skill sets are entirely different.
The factors above have caused a reaction in the marketplace:
- High performers in high demand industries can mandate promotional increases of 15 to 20% or more in compensation. Some hospitals award hiring bonuses of $20,000 for nurses, plus relocation costs and help with housing.
- There is financial support and incentive pay given for qualified employees to learn new skills, upgrade proficiencies and obtain certifications in needed functions. Most are in technologies that are needed to backfill unfilled jobs.
- Up to one-third of current employees say they plan to apply for a better job within 12 months. Some will look for an internal move while the majority will find new prospects outside of their current organization.
- Younger employees switch to a new company with tenure of two years or less. Over half will move within that 2-year time-line. Millennials seem to be more confident of opportunities in the future than Generation X employees.
- The economy is expanding at a higher pace than for the past 10 years. That means that the higher skilled, in-demand professionals move up the food chain, which in turn creates a job opportunity with the job they just vacated.
- The unemployment rate is currently at 3.7%, a low number by historical standards. The pressure for talent pushes compensation numbers higher as the pool of qualified professionals shrinks.
- Beyond compensation, working at a new job for a different organization can mean a higher title, additional responsibilities and an expanded decision-making role. This makes a new job in a different organization more attractive to the ambitious.
The downsides are obvious: You may become a job-hopper if you have four or five 2 year stays and then move on. You also become a liability as a flight risk: Someone who will leave, after the company has invested training, experience and opportunity. Quality reference may not follow. So be wary of how you are perceived.
Summary: Changing jobs and companies need to be considered when looking at career strategies. The upsides are accelerating compensation, responsibilities, opportunities and marketability for the future. However, these positive outcomes must be balanced with your professional reputation, relocation considerations, family issues and the possibility of a new assignment that doesn’t working out.
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