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.
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.”