Smart job seekers know that it pays to switch jobs strategically. Recent studies are indicating a trend that is the reverse of previous generations. Apparently, the new normal is that people who switch jobs every 2 years make on average 50% more that their longer tenured peers.
Think about it, if you are receiving merit increases that keep up with inflation, then great. Most of us aren’t. Most merit increases average 2%. That’s right. 2%. Inflation is way above that. Rent alone in many markets is going up 10% a year. Healthcare costs increase 5-15% a year depending on the company.
So if your merit increase is a measly 2% or worse – 0% – because your company doesn’t provide annual cost of living increases, you have a huge problem. A problem that is compounded every year you don’t see any base pay adjustment. You HAVE to leave your job to make up for the loss of income. If you don’t switch jobs, at an initial $70,000 salary, you could be losing up to 50k in earnings over a 10 year period.
Typically a change in jobs results in around a 10% increase in base pay. If you are in a very hard to fill job, 20% is entirely feasible. Also, if you calculate your benefits costs and determine that the new employer’s benefits will cause you to lose money out of pocket, many employers will add more to your salary increase to cover your lost income.
So keep in mind that job search is now a continuous 360° process and the job seeker is the driver, not the employer, if it is done correctly. You are the Captain of Your Career. Sound corny but think about it. You should be driving your strategy, not waiting for your company, or hiring manager to offer you opportunities.
The most important reason you should be continuously working on your career, applying for internal transfers, getting new certifications, expanding your toolkit and interviewing for new opportunities is the salary cut and unofficial automatic demotion that frequently happens, especially to job seekers over 45, when they are downsized.
Since the crash, hiring managers tend to blame downsizing on the job seeker, even if it’s not at all related to their performance. Companies are sold, go bankrupt and close. However, if you are affected, there’s a significant chance it will affect your ability to negotiate compensation.
Procrastination does not work in favor of job seekers facing potential downsizing. Mid career professionals facing some sort of imminent transaction – merger, sale, acquisition, reorganization etc…should immediately transition to another job or project to avoid unemployment. If your organization is struggling financially, do not ignore the warning signs.
Above all, do anything you can do to avoid being in between jobs. Ban the term “unemployed” from your job seeker vocabulary. If you are surprised by the loss of your job, immediately start working on a consulting project. Work as a contractor. Launch a start up. Consult with a start up. Focus on resume building and skills building.
The moment you are unemployed, you are perceived differently by hiring managers. In my experience, Recruiters tend to be more savvy and empathetic as long as the candidate performs very well in interviews. However, Recruiters know that if you are in between jobs, they have more leverage with salary or rate.
So don’t wait. By waiting 1-3 months to work on a project or get a job, you are forfeiting money. There’s a real price to procrastination. My mental formula is that for every 3-6 months you aren’t doing consulting or an FTE job, you are at risk of losing 5% of your base salary. That’s the downsizing haircut that takes years to recoup.