Employment

Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less – Forbes

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Faizan Patankar
Written by Faizan Patankar

New piece by Forbes (online) claims that employees who stay in companies longer than two years get paid 50% less. The study is carried out by comparing average wage rise (of 3%) to the wage rise one gets when moving jobs. This is compared over a 10-year period and also includes the rate of inflation (typically 2%).

These days the normal wage rise is about 3% and inflation is around 2%. In real terms that is a wage increase of a mere 1%. And if your wage increase is less than 3%, then in real terms you are taking a pay-cut.

Now compare this to moving a job. When moving a job, you can demand a higher salary and the raise could be anywhere between 10%-30%. Generally, the overall package difference between jobs has to be 30% for a new job to make any valuable difference to your career.

Forbes claims: “ Staying employed at the same company for over two years on average is going to make you earn less over your lifetime by about 50% or more.

Why are people who jump ship rewarded, when loyal employees are punished for their dedication? The answer is simple. Recessions allow businesses to freeze their payroll and decrease salaries of the newly-hired based on “market trends.” These reactions to the recession are understandable, but the problem is that they are meant to be “temporary.” Instead, they have become the “norm” in the marketplace. More importantly, we have all become used to hearing about “3% raises” and we’ve accepted it as the new “norm.”

Read the full article on Forbes.com. | Forbes.com

About the author

Faizan Patankar

Faizan Patankar

I started Career Geek Blog in 2011 to share my experience in job-hunting. I now focus on careers industry and blogging is just a tool to share that info. Love hacking careers. During the day I focus on my hobby - Engineering.