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Does job-hopping hurt or help your pocket?

Even as economic uncertainty makes some people concerned about keeping their jobs, a recent survey by Hays found that 37 per cent of employees here expect to change jobs this year. The MRIC Group 2015 Talent Survey similarly found that although just 14 per cent of Singapore professionals actually changed jobs in the previous 12 months, 33 per cent say they will definitely try to change jobs this year.

Even as economic uncertainty makes some people concerned about keeping their jobs, a recent survey by Hays found that 37 per cent of employees here expect to change jobs this year. The MRIC Group 2015 Talent Survey similarly found that although just 14 per cent of Singapore professionals actually changed jobs in the previous 12 months, 33 per cent say they will definitely try to change jobs this year.

The top reason employees are looking for a new job, according to the 2015 Robert Walters Salary Survey, is salary increases. Yet better pay is not the only issue. The Hays survey found that many staff are job-hunting because they want new challenges, see a lack of career progression in their current role, or have issues with the management style or culture in their current company. According to the 2016 Deloitte Millennial Survey, more than 70 per cent of millennials in Singapore also believe their leadership skills are not being fully developed.

While a higher salary and a better job may beckon, the real question is whether workers will be better off if they stay in their current job or move to a new company.

THE IMPACT OF CHANGING JOBS

It’s easy to see why a higher salary is job-switchers’ top goal, and changing jobs can be beneficial. Whereas the Robert Walters survey showed that salary increases can average 10-20 per cent when workers change jobs, the latest ECA International Salary Trends survey forecast that salaries for staff who stay at their company here will only increase 4 per cent in 2016.

The long-term impact of those slower increases can be huge. Forbes Contributor Cameron Keng said research indicates that staying at the same company for over two years on average can reduce your earnings about 50 per cent over your lifetime.

Yet the benefits of changing jobs can go beyond just salary and create an impression of superior performance.

Fast Company writer Vivian Giang said some companies believe job-hoppers have a higher learning curve, are higher performers and even are more loyal because they care about making a good impression in the short time they’ll stay with the firm. Ms DeLynn Senna, executive director of Robert Half Finance & Accounting, also noted that staff who job-hopped frequently and assumed higher levels of responsibility along the way can impress hiring managers with their drive.

Yet there can also be benefits for staying at one company rather than changing jobs.

Promotions may come faster for people who stay at one firm. Research on job changes of 14,000 non-CEO executives by Professor Monika Hamori at IE Business School in Madrid, reported in the Harvard Business Review, showed that inside moves at a company produced a considerably higher percentage and faster pace of promotions than changing companies.

Ms Senna also noted that staff who leave too soon may miss the chance to learn in-demand skills. Using Enterprise Resource Planning as an example, she said employers prefer employees who are proficient in Oracle, Microsoft Dynamics GP, SAP or Sage, so staff who are learning these ERP skills yet leave before they master them lose a valuable opportunity to enhance their marketability.

HOW TO MAXIMISE THE BENEFITS

For people who do change jobs, the key is to maximise the benefits and minimise the downside.

For a start, many HR executives say it’s preferable to stay at a company for a couple years, as employers can be reluctant to hire staff who change jobs every 6-9 months.

Employees can also maximise their salary by switching jobs when they’re younger. While data for Singapore is limited, the Resolution Foundation in the UK found that “frequent moves are key to the steep pay progression trajectory successive cohorts experience as they gain a foothold in the jobs market. Crucially the ‘switching premium’ relative to those who stay put is greater when young.” Data showed that ‘job stayers’ averaged 4.4 per cent median annual pay growth for 18-29 year olds over 2007-2014, compared to 11.8 per cent for ‘job switchers’.

Salary increases slow, however, as people continue their careers. Data from payroll processor ADP similarly showed that wage increases for job-switchers in the US were greatest for workers aged 25 to 34, when workers acquire skills rapidly and enjoy frequent promotions, then slowed after workers turned 35.

It is also important to ensure that a new job offers professional development and helps develop transferable skills. Taking a job early in your career at a company renowned for developing its staff, for example, can put you in a development programme that provides a great foundation for your career. Choosing a more meaningful role when you change helps make sure your resume shows that you make huge contributions wherever you go. As time goes on, getting more responsibility and the opportunity to manage people can expand your expertise and position you for a better job in the future

DECIDING WHETHER TO SWITCH

For workers in their twenties and early thirties, then, occasional job changes may help their career if they do it right. After a decade or so of working, however, staying put for a longer time may actually be a better option.

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