Is staying loyal to one company hurting you on pay day? With a rising cost of living it’s important to understand how to maximise your earning potential and perhaps consider a new job if this ultimately leads to more money in your hands.
In this article we will explore your potential salary growth of job hopping vs staying in the same company so you can be confident you are making the right decision to leave or to stay.
What should I be earning for my job title?
As a starting point, it is helpful to check the Jora salary calculator to see what the average full time salary is for your job title in Australia. If you are due a pay rise, the market rate salary will be important to know for your negotiations.
It is also important to understand the minimum wages for your situation, to ensure you are being paid fairly for your work. See our article on minimum wage Australia for more information.
Why changing jobs frequently can lead to higher pay increases throughout your career
If you’re wondering why switching jobs more often can result in earning more money over the course of your career, here are some clear explanations:
1. Overcoming salary increment limitations
Long-term employees often earn less due to limitations on salary increments within organisations. Many companies have strict policies and budget constraints when it comes to annual raises. This means that even if you consistently perform well and make significant contributions to your organisation, your salary may only increase gradually over the years. On the contrary, individuals who strategically change companies have the opportunity to negotiate a higher starting salary without being restricted by incremental raises. This initial boost in compensation sets the stage for higher future earnings.
Ready to make the move? Find a new role on Jora.
2. Thriving in a competitive job market
The job market has become increasingly competitive, with employers competing for top talent. When professionals switch companies, they bring with them a wealth of experience, skills, and fresh perspectives. Consequently, they become attractive candidates to potential employers who are willing to offer more competitive salary packages to secure their services. By leveraging the demand for their expertise, job hoppers can negotiate higher salaries, signing bonuses, and other perks that contribute to their overall earnings.
3. Expanding skill set and diversification
Staying with the same company for an extended period can sometimes limit your exposure to new challenges and growth opportunities. On the other hand, changing companies exposes you to different work environments, technologies, and industries. Each new role presents a unique set of responsibilities and demands, allowing individuals to broaden their skill sets and gain valuable experience. This diverse skill set makes them more marketable and sought after by employers who are willing to pay a premium for their expertise. Consequently, job hoppers can command higher salaries based on their expanded skill set.
4. Accelerated career progression
Changing companies often comes with the added benefit of accelerated career progression. New environments offer fresh opportunities to take on more significant responsibilities, lead teams, and demonstrate leadership potential. With each job switch, professionals can climb the career ladder at a faster pace, attaining higher-level positions and corresponding salaries. This upward trajectory provides a direct path to increased earnings that may not be as readily available to those who remain in one organisation for an extended period.
Have we convinced you yet? Search for your next job on Jora.
5. Access to new networks
Building a strong professional network is crucial for career growth and future opportunities. By moving companies, individuals expose themselves to a wider network of industry professionals, mentors, and potential collaborators. These expanded networks can open doors to lucrative job offers, partnerships, and even entrepreneurial ventures. The connections made through job hopping can lead to increased visibility and access to higher-paying positions that may not be available to those who limit their professional interactions to a single organisation.
6. Market value and industry trends
Industries and job markets evolve rapidly, with certain skills and expertise gaining more value over time. Job hoppers have the advantage of staying attuned to industry trends and adapting their skills accordingly. They can position themselves as experts in emerging fields, which are often associated with higher compensation. Conversely, professionals who remain with one company for an extended period may find their skills becoming obsolete or less relevant in a rapidly changing landscape, potentially impacting their earning potential.
Ready to realise your true market value? Look for a new role on Jora.
In summary, changing jobs more frequently throughout your career can lead to higher pay increases due to overcoming salary increment limitations, thriving in a competitive job market, expanding your skill set and diversifying your experience, experiencing accelerated career progression, accessing new networks, and staying relevant in terms of market value and industry trends.
Comparing career trajectories: job hopper vs. internal promote example
To illustrate the impact of job hopping on earnings, let’s compare the career trajectories of two hypothetical individuals: Alex, the job hopper, and Sarah, the internal promote. Through their professional journeys, we will examine how Alex’s strategic moves across companies ultimately lead to higher earnings compared to Sarah’s tenure within a single organisation.
Alex – The Job Hopper:
Year 1-2: Software Engineer at Company A
- Starting Salary: $60,000
Alex begins their career as a Software Engineer at Company A, earning a respectable starting salary of $60,000. During this period, Alex gains valuable experience and hones their technical skills.
Year 3-4: Senior Software Engineer at Company B
- Salary Increase: 15{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $69,000
Recognising the demand for their skills, Alex decides to explore new opportunities and secures a position as a Senior Software Engineer at Company B. Their expertise and experience allow them to negotiate a 15{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} salary increase, bringing their earnings to $69,000.
Year 5-6: Technical Lead at Company C
- Salary Increase: 20{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $82,800
With their career progressing steadily, Alex accepts an offer as a Technical Lead at Company C. This promotion comes with a substantial salary increase of 20{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb}, amounting to an annual income of $82,800.
Year 7-8: Engineering Manager at Company D
- Salary Increase: 25{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $103,500
Building on their leadership skills, Alex transitions into the role of Engineering Manager at Company D. This transition includes a notable salary increase of 25{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb}, resulting in an annual salary of $103,500.
Year 9-10: Director of Engineering at Company E
- Salary Increase: 30{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $134,550
Continuing their upward trajectory, Alex secures the position of Director of Engineering at Company E. This prestigious role comes with a significant salary increase of 30{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb}, elevating their earnings to $134,550 per year.
Sarah – The Internal Promote:
Year 1-2: Software Engineer at Company X
- Starting Salary: $60,000
Like Alex, Sarah begins her career as a Software Engineer, earning the same starting salary of $60,000 at Company X. She dedicates herself to the organisation, demonstrating her skills and commitment.
Year 3-4: Senior Software Engineer at Company X
- Promotion and Salary Increase: 10{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $66,000
Recognising Sarah’s contributions and potential, Company X promotes her to the position of Senior Software Engineer, accompanied by a modest salary increase of 10{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb}. Sarah’s annual income rises to $66,000.
Year 5-6: Lead Software Engineer at Company X
- Promotion and Salary Increase: 12{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $74,160
Continuing her tenure at Company X, Sarah receives another promotion, this time to the role of Lead Software Engineer. Her salary sees a 12{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} increase, resulting in an annual income of $74,160.
Year 7-8: Engineering Manager at Company X
- Promotion and Salary Increase: 15{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $85,344
Building on her managerial skills and experience, Sarah ascends to the position of Engineering Manager within Company X. The promotion comes with a salary increase of 15{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb}, bringing her annual earnings to $85,344.
Year 9-10: Senior Engineering Manager at Company X
- Promotion and Salary Increase: 18{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb} – New Salary: $100,772
Continuing to climb the corporate ladder within Company X, Sarah reaches the role of Senior Engineering Manager. This promotion includes a salary increase of 18{da8df1156be14ce092073f4fc5560cd38c53e8379dd8ecd334befe19aca86cfb}, resulting in an annual income of $100,772.
Earnings Comparison:
By comparing the career trajectories of Alex, the job hopper, and Sarah, the internal promote, it becomes evident that Alex’s strategic moves across different companies have led to significantly higher earnings over time. While Sarah has experienced internal promotions within Company X, her salary increases have been relatively modest compared to Alex’s salary jumps resulting from changing jobs.
At the end of their 10-year careers, Alex’s salary as the Director of Engineering at Company E amounts to $134,550 per year, while Sarah, as a Senior Engineering Manager at Company X, earns $100,772 annually. The difference in earnings highlights the financial advantage that job hopping can bring, as Alex’s willingness to explore new opportunities has allowed them to negotiate higher salaries and secure more lucrative positions.
Conclusion
Moving from business to business can actually have a lot of benefits for employees pay overtime. It is important to educate yourself on minimum wage and average salary for your job title. Keep checking for the latest job opportunities on Jora to see what salaries are being offered for your role and expertise – it might be worth the move!