One trend among millennial’s these days is something called “job hopping”.
Maybe you’ve heard of it. Essentially it’s when workers find a job, stay for a short amount of time (usually 1-2 years) then “hop” to another job.
It usually makes sense for those people who are in search of a quick path to a higher salary.
Studies back this up, showing that workers who left their jobs for a new one, generally saw their wages increase more than those that stayed.
It is likely favored more among millennial workers due to one big factor: pensions (or a lack thereof).
Gone are the days where companies offered pensions to employees where the longer you stayed, the higher the ultimate payout was.
This huge benefit was a major reason why many in older generations stayed with the same company for a long period, or sometimes their entire careers. (My dad has worked at the same company for 30+ years, though strangely enough he does not actually have a pension…)
Without pensions tying workers to the same company, there’s been less of a reason for employees to stay, especially if the wage growth isn’t as quick as many would like.
My own company has a pension plan, however, it is only for those grandfathered in. Employees hired in the last decade do not get access to it… Bummer!
Job hopping isn’t for everyone though.
There are several benefits of staying with your company that can be just as good for your career in the short and long term.
Clear Growth Path
When you stay with the same company for a longer term, you can often see a clear growth path. It may be tougher to see at smaller companies, but it’s doubly true if you work for a large company.
The people who stay longer will usually have seniority there, simply because they know how the company runs, the processes and procedures and likely have a wide array of experience to dole out to new comers.
With this natural progression, you can essentially plan out several years in advance exactly what roles, skills and experiences you need to learn and develop to get to where you want to be.
Typically (hopefully?) you’ll have a mentor or several within the company, to help give you honest feedback along the way, and help you to get to the position you want to end up in.
To be clear, you can still do all this while job hopping, it will likely just be harder. Finding a new job is a very time intensive process. To do this every year or two can be a huge drag on your mental capacity and take time away from learning other skills that could help out your career.
It can also be tougher to know exactly what your future growth path will be. Sure you can naturally figure that out depending on your profession, but your success is dictated on what jobs are available, and who is offering them.
Another huge benefit to staying at the same company is stability. Now, obviously, you’ll need to tailor this one to your own situation. If you work for a failing company (Sears anyone?), this is anything but stable.
Make sure you stay aware of how your company is performing to be sure you aren’t riding the Titanic into the sea.
That being said, for most financially healthy companies stability is a big perk. You know that your job will be there, you know the management, coworkers, customers (potentially), all leading to one less massive thing for you to worry about.
In the chance of a recession, job stability at any company may be perilous. Some are saying we’ll have one soon, (if you know exactly when, be sure to let me know 😉 ).
When it does inevitably happen, and job cuts occur, who do you think a company will let go of first?
The person they know is a good employee they can rely on who contributes and has gotten things done consistently over a long period? Or the newcomer they just recently hired and have little to no information on?
During times of an economic slow down, it could be beneficial to opt for stability instead of job hopping.
With pensions a thing of the past, many companies have turned to other forms of compensation to entice employees to stay for certain periods.
One way they do this is through their retirement funding. Specifically through the employer match of a 401k. Many employers that offer a 401k will also offer a “match”. This means they will match a percentage (I’ve seen anywhere from 1%-10%) of your own contributions that you put into the 401k.
If you aren’t already, make sure you are contributing this at the minimum! This is free money people!
However, some companies are tricky. To entice employees to stay longer, some employer contributions will have a “vesting period”. This means that if you leave before the vesting period is completed, you actually will not receive that match.
Vesting periods can be anywhere from 1-5 years.
To give an example, a company may match your 401k contributions by 5%. However, for that match to vest you need to stay for 3 years.
If you decide to job hop and leave before 3 years at the same company, you would not receive any of the match you’d been getting since you started there.
This can sometimes be significant money that people miss out on. In that above example, say you made $50,000. A 5% match would equal $2,500/year. If you worked two years at the company then left, you’re leaving $5,000 on the table, of pre-tax money.
Doing this early in your career you’d also miss out on all the compounding returns too which can be a serious amount of money.
If you do decide to job hop anyways, ensure you know what you’re giving up in employer match, and use that to negotiate a higher salary/sign on bonus at your new company.
Some other benefits to staying longer at a company can be specific to certain companies or industry’s.
A common one is an increase in the amount of paid time off (PTO) days. The longer you stay at a company, the more days off you are given and can accrue.
Who doesn’t love more days off?!
Some companies will offer other perks for staying for a certain number of years, usually milestone years like, 5, 10, 15, 20 etc.
For instance, my company offers a bonus for each of those milestones you reach.
One of my friends works for a smaller company. Every employee that stays with his company for 20 years gets a two month paid sabbatical in which they get to choose anywhere in the world they want to go and all travel/lodging expenses are paid for…
Sounds pretty sweet right!?
Obviously I’ve ignored the benefit of pensions throughout this post, but the reality is they still exist out there. Some companies still offer them and if you work as a teacher or federal/state employee you may have one as well. This is a huge reason to stay with a specific employer.
I’m sure there are some other benefits I’ve missed, and many more that are company specific, but the point is that it isn’t always a bad thing to stay with the same employer.
Are You A Job Hopper?
I’ve been with the same company for over 4 years now… ever since graduating college. Though I haven’t especially felt the need to leave, I do realize that I most likely could be paid a higher wage elsewhere.
The reason I haven’t left? All those bullets listed above. This isn’t to say I’ll never leave, just that I have thought about and realized there are multiple ways to build a career.
Not all of these reasons for staying with your company may apply to you own situation.
For some, it may actually be better to find a different company that pays better or offers you different challenges.
Many people like their company but think they are underpaid which is why they look to leave elsewhere. Before you do that, check out this post from Millennial Money which will help you to ask for a pay raise!
If you truly like where you are at, but would leave anyways if they say “no”, what’s the worst that could happen?
Make sure to do your research within your company to ensure you know the benefits of staying long term, plus any other benefits that may be out there that you aren’t taking advantage of.
Sometimes staying with the same company is the right move!
Have you job hopped before? What were your reasons for leaving your company? Does your current company offer any benefits for staying? I’d love to hear your thoughts in the comments!