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Friday, June 27, 2014

The Cost of Staying Where You Are

Check out the article that this link will provide.  It makes several good points about how it costs you dearly to stay in a job too long.

As a recruiter, one of the "red flags" that I deal with quite often is my clients' concerns about "job-hoppers," which is loosely defined as anyone who has had more than three jobs in ten years.  Companies spend a lot of money in the search process and even more in training, so they certainly want to get as many years as possible out of the people they hire. However, since the recession that started in 2008, I have seen a relaxation toward that norm from many of my clients because many excellent employees, through no fault of their own, have been downsized or let go in mergers, acquisitions, and/or companies that have gone out of business.  So, on the one hand, employers are more willing to look at those who have had several jobs, but once they hire someone, they want to keep them as long as possible.

What the employee has to understand, however, is that he/she is the CEO of their career.  If money is a prime factor in where you work, it's less and less likely that you can make as much of it by staying where you are as you can by moving to another organization where your value is more recognized.  In today's job market, it's not uncommon to get increases of 15% to 25% over your previous salary.  When you go to a new organization, you do not battle the anchor of the starting salary at the old organization.

Companies obviously want to get the most "bang for the buck" and prefer to hire new employees at salaries on the low end of the range of compensation for the position.  Often these companies will offer a signing bonus or a year-end performance bonus, but these bonuses are usually a percentage of the salary.  If your salary is $50K and your bonus is 10%, it costs the organization less to pay 10% of $50K than 10% of a higher number.  Additionally, raises are generally awarded as a percentage of salary, and lately the norm for salary increases is about 3%.  If you start out at a low number, you will forever pay the price of accepting that low salary because your percentage increases each year will be tied to that original number...and it will follow you throughout your career at that organization.

It's easy to see that a salary of $60K is much preferred to a salary of $50K with a $10K signing bonus.  The greater the value for your skills and experience, the more important it is to start at the high end of the compensation range for that position.

It's a simple law of supply and demand that your value in the market is based on how easy it is to replace you with someone else.  If you want to maximize that value, don't get stale in one place.  It pays to move around.

by Ken Murdock

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