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BBC Capital

Are you job hopping to nowhere?

About the author

Bryan Borzykowski is a Toronto-based business writer and editor. He writes about personal finance, wealth issues and other money topics for BBC Capital and also contributes to the New York Times, CNBC, CNNMoney, Canadian Business and the Globe and Mail. He’s written three investing and personal finance books, too. Follow him on Twitter @bborzyko. 

Skipping around might actually hurt careers in the long term. (Thinkstock)

Skipping around might actually hurt careers in the long term. (Thinkstock)

When Caleb Forbes landed his first post-university job at an Australian advertising agency at the age of 20, he assumed he would be at the company for years. But after seven months he was bored.

“I felt like I was at the top of my game,” said Forbes, who was a digital strategist at his first employer. But he felt he “had nowhere else to go” within the company.

Forbes moved to London shortly thereafter. He would hold four different jobs at three companies over the next five years. Forbes wanted a better job and higher salary — he was never quite satisfied. His longest stint in one position was 21 months.

Welcome to the world of a job hopper. Forbes’s story isn’t unusual these days and it is likely such frequent movement from one job to the next will become more common, said Rick Guzzo, a Washington DC-based partner with Mercer LLC’s Workforce Sciences Institute.

The main reason: the nature of employment is changing.

“There’s a lot more contract and part time work or flexible employment,” Guzzo said. “That leads to people having a greater number of jobs.”

What’s more, layoffs and salary freezes, among other things, have pushed people from one job to another. In some cases, a stagnant worldwide job market has limited opportunities for star employees, prompting them to seek new challenges at other companies.

Career implications

Moving from company to company frequently doesn’t mean workers are climbing the corporate ladder faster. Depending on the industry and country, being a job hopper may be seen as a liability.

Many recruiters still raise an eyebrow when they see a candidate who has changed companies every two or three years, said Jason Peetsma, managing director of interim practice at Odgers Berndtson, a Toronto-based executive search firm. He said that bias is largely driven by the idea that if the candidate jumped from his last employer after a short period, he will likely do the same again — there is significant  financial risk in hiring someone who leaves in short order.

On the flipside, Peetsma said there is also a risk in hiring someone who’s been with the same firm for decades. Companies prefer people with at least some experience adapting to new work cultures.

 Still, research shows the less someone jumps around the better it is for career advancement — at least to the corner office. In 2005, Monika Hamori, a professor at Spain’s IE Business School, looked at chief executive officers at about age 55 to see if those who moved around more climbed the ladder faster.

She found that executives who stayed with one company became CEO after 23 years, while executives with a more diverse resume landed the top job after 26 years. One reason: workers within the same organization tend to be promoted more frequently and into better jobs.

“When you move into a new organization, that company is only familiar with past performance,” said Hamori. “On an inside move, people are more likely to be promoted on the basis of your potential.”

Should you job hop for the money?

Staying put may be good for climbing the corporate ladder, but it usually won’t earn you significant salary increases. A number of studies show that changing employers can substantially increase a person’s salary.

Peetsma said he has found that people who move to a new company can increase their salary by 10% to 15%, while people who move up in the same company typically get a 5% to 10% raise when they receive a promotion. Long time employees often take what’s offered to them and don’t know what they’re really worth as they move up, he said.

“Employers abuse the loyalty card and employees haven’t done their homework,” he said.

Forbes, now 26 and an entrepreneur, illustrates this point. He found better jobs and more pay by job hopping — his starting salary was £20,000 ($31,000) and his last job paid £100,000 ($155,000).

Whether or not to job hop depends in large part on age and career goals. Younger people have historically changed employers more frequently as they try to find a job that suits them, said Guzzo. But employers tend to find it less acceptable for a 35-year-old to have been with, say, seven companies in 12 years.

One exception: top performers in certain industries are able to move around without a career penalty, said Guzzo. Stars in the media or advertising sectors, for instance, are often regularly recruited by competitor companies. And advertising account executives might follow a client to a new agency. 

So what is the right amount of time to stay at a company? The answer varies by industry. A technology company might see a 40% turnover in staff every year and expect frequent job moves from employees, while an agriculture-related operation will see only 3% of its staff leave and be wary of hiring someone without a long history at a company, Guzzo said.

Acceptable job tenure also differs by country. The median number of years a North American worker stays at one employer is about 4.9. In the United Kingdom, it is a little more than nine years; in Italy about 13 years; in South Korea about five years; and the average is seven years for Brazilians.  

Labour laws are one big predictor of corporate tenure, said Andrea Bassanini, a Paris-based senior economist at the Organisation for Economic Co-operation and Development. It is much harder to hire and fire people in Europe than it is in North America, so people in Europe tend to stay with the same employer for longer, he said. Emerging markets like Brazil and Korea have strong economies and that often means more job opportunities. Cultural views of work and variations in unemployment benefits are also factors in job tenure.

But overall, the best resumes show a combination of loyalty and leaving, said Hamori.

“After making one or two moves across employers it’s in your best interest to spend longer chunks of time inside a single organization,” she said. “It’s very important to be promoted at least once in the same company.”

The best resumes show a combination of loyalty and leaving.