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shadracko t1_iy8wvkn wrote

>Why does this seem to be the case?

Mostly for this reason:

>I'd also feel insecure jumping around

Lots of people can't or don't want to move, so companies generally don't need to pay current employees as much to stay as it would take to get someone new to come aboard.


Linenoise77 t1_iy99gf8 wrote

You make the assumption though that offboardin\onboarding someone new is cheap.

It isn't. First you have to deal with a candidate search. Aside from the paperwork, going through resumes, discussing with your team\peers\superior what you want the new person to be, you have hard costs associated with that. Maybe you have recruiters involved.

Then you inevitably come across a candidate who makes you rethink the position, and you have to repeat the above.

Then you onboard them, which has costs. Your productivity suffers while you get them up to speed, hoping the entire time they mesh with what you have going on.

And sometimes it doesn't work out, and you have to send them pounding, or they bail. And you get to repeat the process.

Same with losing an employee. Maybe they were besties with someone else, maybe even someone critical to your org, and now that person starts thinking of leaving. Maybe the mood in the place changes because Mary doesn't show up with donuts every friday morning or Steve doesn't run the fantasy league anymore.

From the employee side, it also assumes the working environments are the same (rarely they are).

Sure your company could go every year, "Lets give everyone market rate raises" but that still means companies actively searching will have to pay more, and the cycle continues (not to mention your company figuring out how to keep up with that.......oh wait, i forgot reddit, so something something CEO).

I never disrespected someone coming to me saying, "Line, i'm way below what i can make on the open market, and i have people reaching out to me" I'd fight like hell for the right person to get them to where they should be.

But you can only do that every so often (5 years is a nice number if you are just getting the equivalent of COLA).

Likewise i found that people don't negotiate enough when they increase their responsibilities or roles. That is a perfectly valid time to talk about salary.


JibblesnBits7 t1_iy9cd58 wrote

I haven't seen this posted yet but as a hiring manager it's because of accounting/budgeting.

Hiring budgets are much larger than retainment budgets. At the end of the year, accounting will determine they are going to give an x% across the board and if you want to give someone more than that - you need to make a business case to pay/promote that person more than everyone else.

However if that same person quits, HR will do an analysis and give me a range that I can pay someone to hire for that same role.

For example: let's say I have an employee that makes 100k, the standard increase is 3k but I want to get them to 110k. I have to jump through hoops to try and get that promotion through and it still might not get approved.

However if that person leaves, I'll get a budget from HR that says that role typically pays 80-120k. I can go and hire someone for 120k (10k more than I was trying to push through) without any issues. No business case etc. - when it comes from HR - these new funding requests are auto-approved because "the market" says that's what we should be paying, which is easier than me as an individual arguing someone should make more. This is also one of the reasons why you can leverage another offer into more pay at your current company - because the market says you're worth more.

Most businesses aren't going to pay you more than someone else thinks you're worth. Not saying any of this is right, just what I have observed.


shadracko t1_iy9iu4k wrote

>I haven't seen this posted yet but as a hiring manager it's because of accounting/budgeting.

Fine, but those structures aren't immutable. They are created by companies in response to perceived needs.

Your argument more or less repeats mine: companies aren't willing to pay current employees a market rate. Presumably that's because they believe that in enough cases, the current employee isn't willing to leave and is willing to continue working for below-market rate.


[deleted] t1_iy8xinc wrote



jm7489 t1_iy933hl wrote

Theres so many reasons for this. There's the "grass is always greener" concept that hiring from outside is better than promoting from within because the company feels like they're "winning" and "stealing talent". Not to mention the idea of paying someone more to do the job they're already doing (because they've probably already taken over the responsibilities of the promotion they want) isn't palatable

There's the fact that for a million reasons workplaces have become much more impersonal

You used to have to dial a phone or show up in person to express interest in a job. Now applicants by the thousands are available to cherry pick from digitally

The people running most of these companies didn't start them, they've probably been there less than 10 years, they aren't personally invested in the worker the way someone who turned a small business into a megacorp over a 40 year career was

The largest businesses grow by becoming more efficient, which means trying to do the same things they already do while paying less salary

Truthfully businessses have been this way for a long time, its gen x and younger that recognized loyalty isn't worth shit, your employer is counting on you to be too complacent to leave, and the culture of job hopping every few years has only really taken hold en masse in the last 15 years


[deleted] t1_iy98p0y wrote



chugtron t1_iy9gmqs wrote

Amazing what getting rid of golden handcuffs does to change how people treat their employer/employee relationship.


Kara-El t1_iy96zof wrote

I did this recently with a 25% pay jump and my last job still refuses to pay market rate even on new hires. They are having problems hiring my replacement…gee wonder why


[deleted] t1_iy97gzv wrote



Captian_Kenai t1_iy9fk0m wrote

Your old coworkers are the reason the job market is so screwed up. Somewhere along the line we all became complacent pushovers and our employers caught onto it and realized they don’t need to give pay raises


JeffTek t1_iy9iws0 wrote

Victim blaming? On my reddit?

It's more common than you think.


Captian_Kenai t1_iy9k1bw wrote

They’re not victims.

They’re not forced into that job, and I’m sure 80-90% of them can easily leave and find work elsewhere. They’re just too scared to do so and they’re employer knows this. So why bother giving decent raises?

You never get anywhere in life being a pushover.


necrosythe t1_iy9dr4k wrote

Last place I left was WAY underpaying and quickly found themselves losing others after me in my small group. Next thing they know they're opening like 4 slots for that position and lost one of the two managers. And they couldn't fill a single spot for months.


foospork t1_iy9a1vr wrote

I’ve been in the industry for 40 years. It’s been like this for my entire career.

I was at a very good company in the 80s and 90s. It was an open secret there that the only way to get a raise was to leave for a year or so, and then come back. Lots of people did.

At this company, having a low employee number was kind of a thing. If you came back within 18 months, you got to keep your old employee number, your vesting, the number of days of PTO, your retirement fund employer contributions, etc. A lot of folks made sure to come back within 18 months.


ninjewz t1_iy9a8mp wrote

Yeah, I think most people would rather stick to one employer if they had the chance but there's almost no incentive to. Especially when you're younger and you have the whole acceleration of income thing where you're hoping to set you up for your middle aged years where you want probably want stability over jumping around. I'd rather sacrifice job stability in my 20's and 30's (when I'm more "desirable") so that I can find the right job later in life and be fairly compensated so I don't feel the need to move around.


BouncyEgg t1_iy8y3cf wrote

While there are exceptions out there....

You're a commodity.

You are replaceable.

I will hire the one who is willing to do the work the cheapest.

I have no need for loyalty.

I would just replace you with the next person who is willing to work for less pay.

I will tell you that loyalty is important. I will tell you that you are family. I will tell you that you are important.

This is all to keep your wages stagnant and discourage you from seeking other opportunities.


it200219 t1_iy91kt8 wrote

not always the case that next person will cost the company less. In fact in some cases it costs more.


[deleted] t1_iy98ygf wrote



it200219 t1_iy9apoy wrote

to save cost, I have seen they tend to hire Jr. engg or move to contract role. Hard to do 1:1 match and save money.


d0rf47 t1_iy959up wrote

this is a false premise. The reality is actually based on resource allocation in most cases especially in tech. Typically companies will allocate a larger pool of resources for hiring then they do for raises. Not sure exactly why but this is becoming more and more common


Malfrum t1_iy96vl8 wrote

Because in most organizations, hiring comes out of HR's budget. Raises come out of departmental budgets. On paper, it looks like it saves money to the accountants.

It's stupid, because companies don't bother to track how much they waste on losing trained employees + damage done by inexperienced ones during onboarding. But that would be hard to track with robotic, sterile metrics, and God forbid executives actually trouble themselves with knowing how their business functions


bulldg4life t1_iy96ojg wrote

I wouldn't say it is for every company, but I'm betting they've done a cost/benefit analysis. It allows them to spend less money in the long run by focusing their spending efforts.

The cost to lose employees and replace them with higher paid talent is more cost effective than spending money to retain current talent. Figure with job inertia and just straight up employee psychology, they can keep existing employees marginally happy and deal with the outliers.

Personally, I've seen companies that do it both ways. I had a previous company that tried to get as much talent as possible and just churn through employees that all left once they saw their value. And, you could try to counter offer the valuable ones or just move on and burn through more employees. My current company stresses market adjustments and comp increases to keep current talent as much as possible because they don't want to deal with the time lag needed to bring new people in as replacement.

The second company is way more enjoyable to work for.


xanas263 t1_iy96m6y wrote

Probably because there is now an expectation of receiving a higher salary when you change jobs.


milespoints t1_iy99ix2 wrote

The reason is that even with uncompetitive salaries, most people won’t switch.

I know people who know they are underpaid and could get more elsewhere, but don’t switch because they are comfortable and all their friends are at their current job.

So if you pay less money and retain 90% of talent, you can come out ahead financially than if you give everyone raises and retain 98% of talent. Problem is of course that the people who do leave are often the top performers.

There are exceptions. Many high powered consulting firms have an “up or out” type of system where you either get promoted (with a huge raise) or basically get fired. Among large companies, Costco is famous for paying very high salaries and treating people well from the people who stock shelves to the senior executives. But it’s rare!


EEpromChip t1_iy983xw wrote

> I will tell you that you are family.

This to me is a huge red flag and when I look elsewhere. I ain't looking for family. I got family. Most of them suck and try to take advantage of me. Thanks but no.


TathanOTS t1_iy99shu wrote

If this were true they would pay more. Because a % prefer security of staying rather than leaving if they kept the numbers closer they could keep more people. Cost of acquisition thumbs the scale in favor of that for sure.


[deleted] t1_iy91yf9 wrote



jakebeleren t1_iy92him wrote

Right, it’s not without risk. It’s just the fact easiest way to improve salary.


DnD_References t1_iy9a6wo wrote

It's definitely more than that in software. RSU cliffs are a real thing, so in a stable market or growing market, it's not even that the new company needs to offer you substantially more than you were making at the 3 year mark, it's that your effective pay might drop by as much as half at the 4 year mark.

OPs question has some merit, because it's a bit infuriating that they'll replace you with someone who has no domain knowledge and give them a 4 year RSU grant, but they won't just refresh your RSU grant with grants that are anywhere near as good as the initial grant. Hell, I work with people who took other jobs and then came back to get another big grant.

At that point, it's policy, the company (for whatever weird reason) wants the turnover and fresh blood. Personally I think there's just a lot of under the radar ageism in software engineering, and this facilitates it, but who knows. It's not like that everywhere, but a good chunk of places I've bounced around at had 4 year cliffs.


MonsieurVox t1_iy8x5d5 wrote

It's actually pretty remarkable that companies are still operating under the mindset that they can get away with 2-3% raises and not lose a lot of talent. The days of decades-long tenure at companies is mostly gone unless someone a) really loves their company/work and/or b) has no other options.

EDIT: This theory isn’t accurate, or at least doesn’t tell the whole story. Thanks for explaining, everyone!

Tangentially related, I have a theory that is often overlooked that may account for a good chunk of long employment tenure that was common in the past. After the ACA (Obamacare) became law, it forbade insurance companies from denying coverage for someone with pre-existing conditions. If I understand this correctly, it would mean that if someone worked for Company A, had their insurance, then developed a chronic condition, they could be denied coverage at Company B's insurance plan if they switched companies. Maybe that's not the case, but if it is, that would explain why so many people stayed at companies they hated or that underpaid them; they were essentially stuck there unless they wanted to go without medical insurance.


plantswineanddogs t1_iy96ijy wrote

In my experience it didn't work like that. When you left company A's insurance they provided you with a certificate of coverage. You could supply this to company B to show "yes this condition existed before I started with you BUT I was insured by somebody else at the time" and they would say okay and cover you. The pre-existing clause really hurt the uninsured.


MonsieurVox t1_iy97abx wrote

Thanks for the insight! I started working after the ACA was law so never dealt with that directly. Sounds like if someone spent a period of time unemployed and/or uninsured and developed a chronic condition during that period, that's when they were impacted.


terracottatilefish t1_iy95vj3 wrote

Health insurance was probably a factor, but in general if your employer offers insurance they have to offer it to everyone in the company and the insurer can’t deny them. But until COBRA, there was no option to continue coverage after leaving, so if you needed insurance you basically had to make a jump.

I think it’s much more likely that it’s a combination of a few things:

  1. there used to be real rewards for sticking with a company for decades in terms of pension and seniority. If you got a pension worth a third of your annual salary for the rest of your life after 20-30 years and you otherwise liked the work okay, there’s a real inducement to stick it out. Pensions are mostly a thing of the past now.

  2. It was harder to hire (no LinkedIn or Indeed) and people didn’t move around as much, so promoting from within was more of a thing as applicant pools were smaller and more local.

  3. the idea that you should stay somewhere for decades was ingrained in the boomer generation because it worked for them. Gen X not quite so much but it was a much smaller number of workers. And it’s kind of expected to jump around a lot in your 20s/early 30s while you’re finding a career. We’re only getting now to a point where the millennials are hitting 40 and are STILL jumping around frequently, because now optimizing long term financial security incentivizes maximizing salary and seniority over duration.


somdude04 t1_iy984ts wrote

Health insurance still is a factor. I have great coverage now, and have gotten predeterminations for things not-always-covered that are pretty expensive. Could I do that again elsewhere? Probably? Is it a guarantee? Not at all. Those predeterminations are worth roughly 18k a year for me, and the knowledge that future ones will be easier is another roughly 15k a year with things I know are coming. So any new job is starting out at a presumed 33k deficit on comparison, nevermind all the normal hurdles and comparisons. And good luck being able to find out detailed health insurance info pre-hire, much less individual coverage questions.


raouldukesaccomplice t1_iy9b431 wrote

>If I understand this correctly, it would mean that if someone worked for Company A, had their insurance, then developed a chronic condition, they could be denied coverage at Company B's insurance plan if they switched companies.

They would be denied an individual health insurance plan they tried to purchase themselves.

Group health plans offered to employees of a given company, members of a given labor union, etc, can't arbitrarily exclude specific members of that class.


milespoints t1_iy99sc3 wrote

I work in healthcare and this never worked like that.

If you got a new job with employer sponsored healthcare, you got it automatically with no exclusions.

The preexisting condition thing applied to individual health insurance that you purchased separately from a job.


vettewiz t1_iy8x1j3 wrote

Doesn’t this kind of make logical sense? If a company wants to hire you, they’re going to have to offer a compelling reason. If I’m content with my job, I’m. It leaving for a 10% raise. Heck, I don’t think I’d leave for a 20% raise.

I do however think employers can retain employees with a combination of benefits. If you have a good salary package, then combine with extremely flexible work schedules and good benefits, you don’t need to offer over the moon raises yearly.


dtp502 t1_iy949k6 wrote

Some MBA out there has done the math that the company comes out ahead if X% of people leave because of pay vs paying everyone what they are worth.

They will evaluate the cost to replace vs retain individuals as they are on their way out the door.

Until it starts hurting the bottom line it won’t change.


Rave-Unicorn-Votive t1_iy8zsmr wrote

>Why is the current system like this?

The bottom line? There aren't enough people job hopping every few years to make it costly enough for companies to drop the old paradigm. I think we're maybe approaching a tipping point though, the lifetime commitment to an employer is definitely more prevalent in older generations. As those people leave the workforce I think it will become too costly for companies to not change, at least a little.


SquareVehicle t1_iy8zbs1 wrote

It's pretty typical that that's the best way to get paid the most the quickest. But it actually is also possible to stay and still get paid well.

I've been tracking my total comp since I started and on average I've gotten a 9.4% raise each year. Some years lower (looking at you 2009 where I actually went negative YoY but lol at finding a new job), some years higher, but that's the average I've had from sticking with the same company for the last 16 years. I have of course gotten lots of interest from other companies but either the new job sounds worse or they can't significantly (>20%) beat my current salary at the time so I stay put because I still really like my job and my coworkers and location. Also the same reason many of my coworkers are also still here even longer than I have.

Anyways as long as you're semi-regularly checking to make sure you're still being paid well compared to jumping companies, then it's not necessarily inevitable you'll get paid less, but I'll admit I'm probably more of an outlier.

And FWIW people have been saying "20 years at the same company days are now over" since the 1990's so it hasn't been true for a long long time.


NorthOaklandGuy t1_iy91x9e wrote

Yeah people started saying it when most large private sector employers stopped offering pensions.


raouldukesaccomplice t1_iy9bmev wrote

Even companies that do 401(k)s in lieu of defined benefit pensions still often have a vesting period for their share of the matching funds and you could lose that money if you don't stay for at least a few years.


NorthOaklandGuy t1_iy9clcy wrote

True but that’s usually 4 years and you usually keep something. The vesting period for employer contributions at my firm is 4 years and you get 25% vested every year. So leaving at 3 years I would keeps 100% of my contribution and 75% of my employers contribution. So yeah that does discourage job hopping but it doesn’t encourage staying put for 30 years.


woodstock99forlyfe t1_iy9006b wrote

I spent 15 years (non consecutive) at megabanks and people just get so warm and cozy with the job security that they don't even think about leaving.

The companies 100% take advantage of this and if you do that I guarantee you are significantly underpaid.

I would tell people about my experiences leaving and coming back and upping my pay 50 or more percent and they just stared at me and collected their 2% and continued on with their day.


BezniaAtWork t1_iy90y17 wrote

26 years old here and got hired at an insurance company for $78k in a mid-level IT role. Been talking a lot with and learning from another guy on my team. He's in his late 40s, been here about 10 years now and is at $66k. I do not have the credentials to back up my way higher pay, but I know he should be making a lot more than that. This entire company is full of people who have been here 10-30 years. I just smile and say how impressive it is that the company is able to retain employees like that but it reminds me of my first job when I was making $13/hr providing help desk support. in 2016. There were guys on my team who had been there 15 years and were making $15/hr thinking they couldn't do better anywhere else.

I've switched jobs twice now. First was from $13/hr to $21/hr. Left that second job after 4 years making $26/hr for my current job at $37.

I am still in a Discord chat with all of my old team members from that first job and there's a good deal of them still there pulling in about $16-17/hr.


woodstock99forlyfe t1_iy94qpu wrote

Every single decent raise I've ever gotten was from switching companies.

Even internal promotions were bad. At one bank they would base it as a % of your current pay rather than the payband for your new role so if you started in an entry level position and worked your way up you would be getting absolutely shafted.

I left after they promoted me 3 times and I was making 40% less than new hires. Then 2 years later I went back to the same bank and walked in the door making more than any of the 20 year people in my department. When review time came around they would tell me "you're well positioned compared to your peers" and give me 0 or 1% so I left again. It's not my problem you are underpaying my coworkers.

Then I got another promotion thay should have come with probably a 50% raise to be in the right payband and they gave me attitude when I wasn't happy with 10%. They were like but it's a 10% increase! And I was just like my current salary is irrelevant I want what you would pay someone off the street. They didn't budge so I used the role to beef up my resume and then left. I make more than 2x what they were paying. I would have stayed for less because I liked the job, but they would rather hire and train someone else. Penny wise pound foolish.

I learned this lesson the hard way, loyalty is for people not corporations.


MicroBadger_ t1_iy9c8nh wrote

My annual raises have always been in the 2-4% range. My job hops have given me raises of 50%, 46%, and 27%. There is certainly a point of diminishing returns where the money to bullshit ratio won't be worth it but I haven't hit it yet.


raouldukesaccomplice t1_iy9cn6s wrote

Unless you live in a major city, wouldn't you at some point just run out of companies to job hop to unless you were either returning to places you'd worked before or were willing to move to a different city?

A lot of people basically become "stuck" once they're married and have kids. If they moved, their spouse would have to change jobs too and their kids would be changing schools. They might be moving away from family, etc.


woodstock99forlyfe t1_iy9ff4o wrote

I've found the key is to do enough time at each job that you can come back. I've worked at Chase 3 times lol.


bwyer t1_iy9atel wrote

>just stared at me and collected their 2%

Not realizing that 2% doesn't even keep up with inflation and they're effectively getting a pay cut year over year.

I used to work in finance until they closed our local office and I was laid off a few years ago. I went back and looked at my salary history. I was making considerably less in real dollars at the point when I was laid off than I did 15 years prior.


just2commenthere t1_iy93oy4 wrote

I've been working at the same company for 17 years now. Love my job, love my coworkers, been working from home that entire 17 years. They'll have to fire my ass to get rid of me.

Edit: I should note I went from I think it was 75k to close to 250k in that timeframe.


Sonarav t1_iy99p7y wrote

Definitely not the norm and clearly you work for a great company that values you


just2commenthere t1_iy9frrq wrote

Not so much me they value but the skills I happen to have. I'm super lucky and I guess it's easy to think it is the norm when it's been all you've known for almost 2 decades. I'm sorry that not all companies are like the one I work for, they should be.


glass_ceiling_burner t1_iy97u5t wrote

I've even boomeranged back to the same company over a seven year period with ~90% salary increase.

Fortune favors the bold. You have to be willing to take chances, not sell yourself short and be shooting for the next highest position. And try never to burn any bridges.


[deleted] t1_iy8x0zs wrote



Killer_Sloth t1_iy99fno wrote

I do wonder if the greater ubiquity of remote work will change this at all. In the past, finding a new job meant limiting your search to companies within a reasonable commuting distance, or moving far away. Now, you can choose from thousands of companies anywhere in the country, or even in other countries. That, plus the increasing realization in the workforce that loyalty to a company isn't worth shit, may make people much more motivated to leave shitty jobs or jobs that don't pay well enough. It might end up changing the math for the companies regarding paying more to retain good employees.


newton302 t1_iy8y4bf wrote

>I feel like it cant look good on my resume and hiring mangers would eventually become skeptical

Yes it’s common in certain industries and you shouldn’t be rejected out of hand for it. Remember some careers in some industries can be characterized by lots of networking and job-hopping to follow people you’ve worked with or to take talent with you. For some reason in the tech field (in my experience), job hopping can be a little more organic than just independently leaving a job and getting a completely new one on your own. Groups and teams of like-minded colleagues/friends can migrate together especially when the job market was a little softer. Associates might concieve their own companies and ideas and get others to join them, etc. There are often interesting stories behind a choppy work history that go beyond just applying for different jobs and leaving a place. If you think about it traditionally then it looks worse on paper.


slow-to-anger t1_iy94c6f wrote

I have been told you can also apply for jobs you don't intend to take and leverage a raise at your current company.

Does anyone have experience doing this? How does it usually work out?


bulldg4life t1_iy94x2z wrote

The catch there is that it would be a one time attempt at doing that. And, you need to be prepared to take the other job because your current job may just say "ok, bye".

And, even if you DID take the counter offer, you'd be first at the top of the list for flight risk. So, you'd have a spotlight on you if cuts needed to be made.


msrubythoughts t1_iy9b7ty wrote

I inadvertently did this - told my boss I was leaving, and she tried to match my new offer. but I think her counter was motivated by the total surprise/unexpectedness of my leaving. I told no one during the entire/lengthy interview process, and I only told my boss once I had a contract/offer in hand.

between the raise and better benefits offered by the new company, it was an easy choice. but it was impressive & surprising that my old job tried to counter (& it wouldn’t have hurt my relationship or dynamic if I accepted their counter and stayed, so you could definitely try!) personally, I just needed & wanted to move


LotteUSA t1_iy9ak55 wrote

It feels like cheating for most managers and they don't like the feeling. They are hurt that you were looking somewhere else. Right or wrong but this will play a role on how the manager will see you in the future. It will take time to heal.


Syres20 t1_iy8xen6 wrote

This was the case when I worked in banking. It's like being punished for being loyal and true, which are the things companies tell their employees they value "cause we're like a family" only to discover that families grow apart too.

So long as you contribute to your own retirement and fund your emergency and fun accounts, you'll be fine accepting this reality of life.


bwyer t1_iy9addx wrote

I worked in finance for about 30 years.

I can characterize a banker's view of their personnel with one statement: "employees are on the liability side of the balance sheet."


Actually-Yo-Momma t1_iy91y1q wrote

This only works for a while. Eventually ageism catches up and future employers see a declining employee who cannot commit and then they opt for the younger 20s 30s guy who is still trying to prove themselves making significantly less money


milespoints t1_iy9a7aq wrote

This is only true at lower levels of employment. If you are looking to hire a senior director or above, having someone with lots of experience is kind of your goal


TathanOTS t1_iy99d6e wrote

Am engineer. Can confirm. Things that I can't prove definitively contribute to this in engineering but pretty sure do to one extent or another.

  • pensions. We used to have them. Now most don't. 401k is portable. Companies never adjusted to a guy wanting to stick around for the pension.

  • hr/recruitment. They get paid more and have more work if there is more change. So they don't let raises get to high and then obfuscate the costs of bringing a replacement in (starting out inefficiency, cost of hr/recruitment, etc.)

  • safeness. The thing you describe as feeling insecure and wanting to "commit" to a company. They know they will keep some % of the people like you. At a discount. So it helps balance the books. (don't get me wrong. I think after my last move I am going to be like you too. I make enough that I can be comfortable and live within my means and so the extra $ isn't as big a factor.)


Droo99 t1_iy90m5n wrote

On top of what everyone else said, I think another reason is that companies always think outside people are smarter/better than the current employees they have. Probably because everyone puts on their best performance when interviewing for a job.

There is probably some kind of psychological basis for it, like a grass is greener syndrome.


S7EFEN t1_iy95k8t wrote

>Why is the current system like this?

because for every person who job hops aggressively for higher salary you have significantly more people not willing to get out of their comfort zone/take risks/prioritizing stability for their family who the company can effectively give pay cuts relative to inflation year over year.


Ghawk134 t1_iy98gl3 wrote

Electrical/computer/software engineer here. Hopped jobs earlier this year after just under 3 yrs at my previous company. 50% raise. Would recommend.


guthepenguin t1_iy9bni1 wrote

Agreed. B2B marketing here.

Four years at one company: 6% total increase.

Jumping to that company: 10% increase.

Jumping from that company: 28% increase.

In ten years time I have nearly tripled my salary, and 95% of that is by jumping.


rnelsonee t1_iy91xk1 wrote

I'm an engineer who spent 18 years at my last company and will be at my second/current one until I retire, so let me offer my thoughts since we seem similar.

There's nothing wrong with staying with a company, provided you're paid what your worth (and like the job of course). If you have a good manager and/or stick up for yourself, that shouldn't be an issue. If someone gets paid more going to a new job, either they weren't getting paid enough before, or they're agreeing to more accountability and responsibility at their new job. The job offers I got when I switched were right around my then-current salary, and that was expected, because I had a good manager. I've never asked for a raise but have gotten one every year (two this year, thanks to inflation!)^1. I've never asked for a promotion either, but have gotten those as well.

And I can play the "what if" game all I want, but I know this: my current salary is consummate with my experience and skill. If I scored 10%-25% increases by job-hopping, there's no way I could be doing what I'm doing now (real engineering, minor project management), because my $250k salary (or whatever) would mean I'd be spending all day going over budgets, leading multiple team meetings, dealing with customers at a high level, and trying to turn little KPI icons green. No thanks.

^1 If you care, median is 4.0%, mean is 5.86%. These were 4.9% and 7.0% for my first job; my new job offers lower raises which I knew about going in, but they make it up in great retirement benefits.


blacksteveman t1_iy98nvt wrote

I am in a similar boat as you. 8 years as an engineer at my current company. I make almost 3x what I originally made when I first got here. I found a niche that allows me to do the work I enjoy and I make sure that I am good at what I do. I would tell my boss to set goals for me, both professionally and personally so I have something to work for. It also allows me to have ammo when raises come around.

Another thing I made sure to do is promote and keep up the work culture that my company likes to tout publicly. Ive been told that I set the attitude for the part of the company I am a part of (in charge of, sorta) and that they are happy that the most senior department is the engineering one. My managers enjoy that they can throw me the keys to a project and it just gets done, I like the role I am in and they do what they can to make me happy. Ive been offered to go higher in the org but I just dont want the added responsibilities.


Broad_Bag_5526 t1_iy95vvt wrote

The way companies work has totally changed.

Back in the day when someone retired, quite or resigned the person "below" them would move up and the person "below" that person would move and so on. This system proved poor because now there is a new inexperienced person at every level of the company.

But companies realized that it was better to just hire someone from outside the company. That way not only do you not create a "crack" in the company pyramid, you also get to steal talent from a competitor.

So there is little to no reason to promote from within the company.


newnewreditguy t1_iy988e2 wrote

I've personally gone through this. I'm an engineer too. I worked at a company for about 6 years and was offered a position by another company while still being employed. I was getting paid very well at my first company. I was actually getting paid close to some senior salary. I thought I hadit made for myself.

The new company called me in for an interview and ended up offering much more money and far better benefits. The former company was willing too match on every aspect. I couldn't sleep for days trying to come up with a decision. I ended up leaving to my current company.

I am immensely better here: better pay, commute, benefits, bonus, etc. This job has literally changed my life. I'm now seeing I can comfortably retire early. A friend of mine stayed at the previous company, 4 years later there hasn't been a day when I have thought I'd be better if I'd stayed. You'll have to show you're worth your salary wherever you go though. Not necessarily staying late all the time but by producing high quality work.


censorized t1_iy99gct wrote

This isn't true in every sector. Reddit is tech-heavy, and they seem to think all the world is like them. In certain fields this is true, others not so much.


bulldg4life t1_iy94jpl wrote

I would say that people shouldn't automatically default to that thought process though. If you find a company that rewards its employees or values your contributions, don't assume you HAVE to leave. And, as you go further in your career, short term stops will eventually be career limiting.

I've seen the job hops work out but I've also benefited from growing within a company. People should keep their eyes open for a company that values their contributions and rewards it versus purely job hopping as the only path to victory.

Later in a career, you could job hop to get more comp but then you'll cap yourself out at being able to move up to more leadership positions because you don't have the cv to back it up.


chris8535 t1_iy961uq wrote

What no one tells you this works both ways. You are a commodity and your value can drop too. But no one says that.


ProWriterDavid t1_iy9gt05 wrote

Plenty of people tell you that, whether you want to listen or not is a different matter. People constantly advise others to continue to gain skills, get a degree, get certifications, make sure you learn new stuff every year to stay relevant in whatever field etc

A lot of motivated people understand that they are replaceable much more than your middle of the road worker does, usually why they are always making moves and thinking about themselves above the company's interests.

Your value can and will drop if you don't actively stay on top of it.


[deleted] t1_iy96b00 wrote

I think it's two fold for major corporations.

  • Companies want some turnover. Employees aren't all equal and retention efforts are targeted at top performers. This means the majority of workers simply don't see it. If you land in the bottom 15% of performers (this number is arbitrary), they likely want you to job hop for your raise.

  • Employees typically have a number that acts as a catalyst to change jobs. Companies don't need to pay the same to retain employees as to attract employees. To attract new talent, you have to pay 10-20% more than their current role. This same approach is used by insurance agencies and paid services; they dont need to beat other offers, just be close enough to avoid the catalyst number.

My personal experience is that I stayed at my first big job for a decade. I would have made more in the short term hopping, but the experience and training I got from constant promotion and training was more valuable IMO. I did finally leave when I became unhappy because of leadership changes after my salary was tripled (35k - $125k) in my tenure. Finding a new job was easy and in two years with new jos I've seen another 90% growth. This wouldn't have been achievable without the opportunities offered through my long tenure (building new teams, managing practices, unreasonably expensive certifications). IMO you should seek active professional growth and then expect compensation. There is some delay between growth and comp, but it all works out in the end.


Not_as_witty_as_u t1_iy96dba wrote

Not always true though, I know people who are 15+ at the same company and it comes with a lot of perks. Still competitive salary but lots of vacation time, flexibility, connections within the organisation etc


mikka1 t1_iy9hdm3 wrote

My previous employer was like this. There was a few folks around who worked at that company longer than I lived lol. First year on the job there was an office retirement party for one of the department heads who worked for the company for 50 (yes, fifty) years. She started as a mailroom clerk right after school, slowly tacked on a college degree, then I believe even MBA (all on a company's dime) and ended up as a department head for a 400+ strong department.

The problem though was that the real tangible perks started probably around 15-20 years there. Some folks had full 2+ months PTO every year, decent health benefits and many other perks.

Many people from tech departments were leaving around 3-6 years mark, especially those who started from lower bands. By the end of 5th year their salary there could've been 10% higher than what they started with (2% merit increases every year), but their market value may have easily been 1.5-2.0x of what it was 5 years prior to that (experienced mid-level vs junior/entry level).

When I left the company after 5.5 years, my new offered salary was around 60% higher than what I was making at that place. Simply unrealistic to reach with 2% increases.

I broke the news to my boss over Zoom and he even had to double check if he heard it correctly - "60%? You mean six-zero? Not sixTEEN percent? Nope, not even going to try to counter it! My congratulations, good luck!"


horsewitnoname t1_iy96jzr wrote

Work in finance and it’s certainly the case here. Stay somewhere 3-5 years (5 being the MAX) then either get a large promotion at your existing company or jump to a new company. I got a 50% (not exaggerating) raise when I took my current job. When I move to my next gig I expect it will also fall in the 30-50% increase range. But it’s not automatic, I’m increasing my knowledge and skillset in the time I’m here to make me qualified for those types of bumps.

I can also say that in our budgeting for 2023, we’re factoring an average 5% raise for everyone next year, knowing that a lot of people won’t be happy with that and will leave. It’s just the cycle of how things are these days. You keep and promote your best people, the ones that don’t get promoted will leave and be replaced with someone (probably cheaper) then the cycle repeats.


Much_Difference t1_iy96uhw wrote

Is this actually a new trend or is it just infinitely easier to notice because everything is online? Actual question because I really don't know the answer but I bet it's not not a factor.

In 1992, you couldn't randomly click through a dozen job boards and anonymously see what's going on in a matter of seconds. You'd have to spend a decent chunk of time actively seeking this info: calling specific places to ask, going to a business in person, telling other people that you want to know about job openings. There were want ads in the paper but they were nowhere near as robust as what you get by simply typing "veterinarian jobs" into Google, and newspapers were geographically specific. You wouldn't see openings from all over the country like you can with online job boards now, either.


reubenmitchell t1_iy97k5v wrote

It's ALWAYS been like this, especially in IT/ software development. I have had to leave to get career advancement and payrise every time.


MagPieMadEye t1_iy999k1 wrote

It's a hassle to find a new job, create a new commute or move you and whatever family you have and lose friends, I think employers prefer to risk you being afraid of these challenges to not pay more, and would rather risk the chance of getting a guy who performs really well cause he's new but doesn't know what he's worth so takes a garbage deal.

It's the same in IT, one of the first things my husband's coworker told him was to stay a year and than jump, do that for a few years than settle, the pay is so much better by doing this. I personally think it's not too bad an idea either cause it proves to yourself you don't need to be afraid of losing your job so you don't get taken advantage of, you learn different qualities of work and know when you've found a good fit rather than being told it is.


boredmsguy t1_iy9au07 wrote

Personal anecdote here. I've increased my salary nearly 90% in the last 6 years by job hopping twice. It would've taken me 15-20 years at the first job to make what I am now. It is what it is.


RelishMule t1_iy8x3ay wrote

This is not a personal finance question, so maybe not the best forum for it, but...

> I on the other-hand like committing to a company.

That works out great if the company is also committed to you. Part of that committment on their end is paying you and growing your career.

> I feel like it cant look good on my resume and hiring mangers would eventually become skeptical....right?

Depends on the industry. A generation ago, you would have been correct. Now, in many sectors, its nearly the opposite and switching every few years is the norm. Might be a red flag if somebody stays at the same company for 10 years with not much growth.


CasualFridays047 OP t1_iy957g7 wrote

Sorry Im looking at it in a perspective of retirement planning, personal income decision making, etc. might still not be the correct forum XD


bulldg4life t1_iy95ibc wrote

As a hiring manager, I would look at stuff that is less than 2 years as questionable. Especially if it is a repeated thing.

Personally, I may not have room to talk as I moved from one job to another to another between 2015 and 2016. But, three jobs in two years is bookend by 6+ years at jobs 1 and 3.

If I see a resume where every single job is less than 18 months, then I start to wonder why someone can't stick it out. And, as you try to advance in your career, it's very hard to be seen as a valuable contributor if you may be looking at the exit before our first budget planning cycle...


RelishMule t1_iy98g82 wrote

> As a hiring manager, I would look at stuff that is less than 2 years as questionable. Especially if it is a repeated thing.

Ya, like I said, is still industry specific. Some its very common, some its still not. 2 years, does seem to be kind of a "magic number" though. Long enough that if you don't get a good bump in pay/promotion and are looking to move, you still gave that companuy the ole college try.

> If I see a resume where every single job is less than 18 months, then I start to wonder why someone can't stick it out.

Even then, if there is clear progression with each move (especially early career folks), I don't think most people will see that as not "sticking it out". If the applicant is switching jobs to advance in their career, I would go into an interview with the assumption that (a) they are working hard enough in their current role to earn that raise/promotion and (b) if there was room for them to move up into the next step at my company, they would be apt to take it if I was paying market rates for the advancement.

of course, if its all lateral moves and short term, that is a huge red flag for me as well.


bulldg4life t1_iy9d6f7 wrote

Yeah, I would probably differentiate on early vs late career.

Quick moves or lateral moves later in a career would be far more detrimental than someone in their 20s.


jakebeleren t1_iy92rko wrote

>Might be a red flag if somebody stays at the same company for 10 years with not much growth.

Very much this. I notice on a resume if someone had the same title for many years. In my experience it means they were a middle performer at best. Not bad enough to be replace but not good enough to move up.


BannedStanned t1_iy96vib wrote

> In my experience it means they were a middle performer at best. Not bad enough to be replace but not good enough to move up.

Why, hello, Peter Principle.


samsathebug t1_iy96mhn wrote

I think job hopping for salary increases is a byproduct of companies being unwilling to pay employees more.

Companies don't want to reward long time employees with money. They are more interested/beholden to their shareholders.

If companies regularly provided more than just cost of living raises, improved working conditions, etc they would have more worker retention. But as it stands, the best way an employer can tell a company that they are undervalued is to (threaten) to leave. Otherwise you keep improving, but your paycheck stays the same. You can ask for a promotion, but unless they think they'll lose you, they have no monetary incentive to give you that raise. And that's when you get employees strung along. As one redditor put it, a promotion delayed is a promotion denied.

TL;DR: Companies don't want to pay employees more, so employees find other companies that will.


Concerned-23 t1_iy979yx wrote

I mean my company makes it pretty hard to leave. Pay is slightly above average for the reason. Healthcare is very affordable. I only work 4 days a week. PTO rolls over and new employees start with 35 days. We have a pension plan. I’m salaried but if I pick up someone shift on my day off I’m paid for the extra hours at my hourly rate, yet I’m not docked if I work under 40 hours.


pottomato12 t1_iy97e4x wrote

Thats exactly how the restaurant industry is amongst many others id imagine


alurkerhere t1_iy97k08 wrote

When you think of workers as a distribution of motivation and attractiveness, you'll have varying distributions depending on industry, and for most, you can probably get away with small raises and not have that much turnover.

However, you want to reward the high performers more, but it can't be so much that other workers resent that amount, which leads to lower increases overall. Other companies want to hire better people, so they need to increase the total comp to compete.


missedout505 t1_iy97spg wrote

For the most part, it does seem more "profitable" to jump companies on a regular basis for the pay increases. A friend doubled his salary in one year by jumping twice, but then again, he's in a high demand position.

I've been lucky enough to stay with a private company for a good chunk of my career and am set for a comfy retirement. I wouldn't mind doubling my salary, but I don't NEED it. Helps to be single with no kids, though.


Linenoise77 t1_iy985to wrote

You are essentially trading stability and safety for money in most cases.

I know this is reddit and corporations only care about themselves blah blah blah, but you always try the hardest to save the folks who are ingrained in the system, have long standing relationships with other people, know all of the crazy nuances and culture, have that one piece of useful knowledge that saves the day every other year or so, etc when cuts come around.

in MOST fields, 3 years really isn't enough to get yourself in that spot.

Reddit is a bit IT\IS heavy if i had to guess when it comes to careers, and rules are somewhat different there. You don't want to get caught in a place where technology and your skills stagnate. Some little project you worked on at your current job may now give you the push to go for higher pay at someplace else where that is the MAIN job, etc.

As someone who was a hiring manager, you liked seeing nice stretches at a previous job, vs the 2-3 year flips. Ideally you saw a little bit of both...."I was with the company 8 years....everything was great, but i didn't see a direction for me for some time moving forward..."

Hiring someone who you knew would start shopping around in 2 years was always a strike against you, because if you aren't a mom and pop, hiring\firing someone is a giant pain in the ass, expensive, and a time suck, and if you get it wrong, you can fuck up existing stuff that works.


frozenrope22 t1_iy9967g wrote

The downside to jumping around like that can be missing out on equity grants (options, RSUs, etc). Depending on the company, you could be leaving a lot of money on the table.


hammilithome t1_iy999ma wrote

Not new, welcome to working 1998+.

The only big change from previous generations was the removal of pensions.

For previous generations, the goal was to get into a big company and stay there til retirement because of the pension plan. So while your annual raise was low, you were tied to a pension that grew. Trading short term cash for long term cash.

Now, there are no pensions and ppl about to claim them are top of the list for layoffs. 2008 was a massive dick kick yo those just a few years from collecting their pensions.

What did that change?

Now, you do 2-4 years at a company and move on unless actual upward mobility is happening. Even then, you get 1 year with the new title then go get a 20% bump by going to a new org unless your company will pay market rates vs sticking to internal pay raise limits (ATT as an example of chasing talent away).

I was at an org for 10 years because I was moving up and laterally into a career i loved. But within 4 years of leaving, i doubled my income by going to 3 different orgs. It was uncomfortable change, but can't argue with the results.

Plus, discomfort cultivates growth.


iwoketoanightmare t1_iy99f7h wrote

Most humans are pre disposed to sunk cost fallacy thinking.


omgforeal t1_iy99lsi wrote

They hope and bet on you being afraid of the insecurity of a new role.

But you’ll notice they don’t offer pensions anymore. There’s no benefits to staying at one place. And the only real motivation to moving slowly between employers is so that your resume doesn’t look jumpy.

If you’re fine earning less - then stay. Earnings isn’t everyone’s motivation. But in 10yrs I anticipate you’ll find your compensation well behind the curve of your experience.

The other side of this is exposure- I’d wager your in tech - your technical exposure will change if you move around. If you are comfortable staying in one place- that’s cool but it might make it harder to find your skillset down the line.

That all being said… employment isn’t always about money and if you feel better staying in one place, thats a good decision for you.


Cryptocaned t1_iy99vxk wrote

Really frustrating, I love my job role, love the company but I'm definitely underpaid.


third_rate_economist t1_iy9a0ok wrote

Personally, I have nearly doubled my salary every time I've moved. Financially, I would be nowhere near where I am today if I had committed to one company. First job out of school (as a master's graduate), I made $14.50/hr at a major research institution as a researcher. Jumped to $90k a year later at a major healthcare company. Jumped to $175k 3 years later at a consulting firm. A colleague I worked with at the first school I worked for, also with a master's who started just after me is making $43k. I know this sounds like a brag, but it is clear to me that switching companies is far better in terms of earnings - at least in my industry.


collinincolumbus t1_iy9akou wrote

Its common for nearly any role and level. Change companies for biggest raises and fastest career progression.

I work in finance communications and job hopped every 1.5-2 years since college, progressing far more than the raises I received at any company. I have been with my current company only because they reward well internally and promote/progress people.

Been with my company for about 2.5 years, received a promotion earlier this year and likely to get a good pay bump next month as well. Have moved from $100K at the start of COVID up to likely $135K. I know I can get a bigger salary if I move to another company closer to $175k+, but I can make more than that if I stay put at my agency.... I also work about 30-35 hours a week and leave at noon every Friday.


texans1234 t1_iy9al3t wrote

Yeah but that may not be the best for your retirement. Kind of a short term gain vs. long term goals kind of thing.


IndexBot t1_iy9aop0 wrote

This post has been removed because we don't allow career path or school choice questions (rule 9). Other subreddits are better equipped to address this topic:

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guthepenguin t1_iy9asqm wrote

My dad worked for over a decade and a half at the headquarters of the same major retailer and they tossed him aside and rehired him at a demotion after months of unemployment.

He's doing well for himself, but learned a valuable lesson. Never be loyal to the org because they sure as heck won't be loyal to you.


thrakkerzog t1_iy9au5g wrote

Some companies do not allow 401k contributions for a few months after hire. Perhaps this can be negotiated, but it might make it more difficult to maximize pre-tax contributions.


carrotrascal t1_iy9b5ia wrote

The 3rd option is to do interviews every 2 years to gauge your worth and make sure your salary is keeping up. Then bring that data to your boss and ask for a comparable rate. It won’t be as much, but you get to stay at the place you like, you’ll get a good salary or improved benefits depending on how you negotiate, and you’ll have knowledge that will give you a better sense of your value and skillset compared to what’s out there.

I like this method because the lack of pressure to leave also means the jobs I test for are jobs or campanies I really want to go to. Sometimes I learn the grass isn’t always greener, but sometimes it really is. Then hoping is easy.


Llohr t1_iy9bza2 wrote

It's like this because of short-sighted profit obsessions.

Employers literally think, "Why should I give them raises if they're already here willingly working for their current wage?"

They extend better offers to new hires because no one will start a job for what they're currently paying people. Most of those people are in a position where they feel trapped. They don't have the savings (or are too risk averse) to move somewhere for a new job, they have leases, medical issues for which they fear a period without insurance (which is why insurance should not be tied to employment). And so on and so forth.

The result is a loss of talent, but since higher-ups so often believe themselves to be the only true talent, they rarely fear that.


RHIT_Grad_1964 t1_iy9dw0h wrote

I’m a retired engineer, started working in 1989. I spent 5+ years at my first job before they offered money to quit. I started my service job after about 6 months I used as a vacation with a promotion and a 40% raise. 3 years later I started at my last job, they wanted engineers to start so the raises matched salary increases of new hires. I retired on disability in 07, I maxed out the disability insurance with my January raise, retired in March.

A friend started at our first job. He was making half my salary when I retired even though he was making 30% more when I quit.

I think some companies are like my last one, posting the replacement cost to employees, this is great for “skilled” employees. It’s horrible for the unskilled staff. The cleaning crew didn’t turn over much until the third round of pay cuts. They found the minimum required to get people to accept the job. I guess that’s capitalism but I didn’t like it.


StaggeringMediocrity t1_iy9dxhy wrote

It's unfortunately true that many companies are much more willing to offer money to lure new employees, than they are to incentivize existing employees to stay. Once you're working for them, they figure they don't have to woo you anymore.

So definitely jumping around a lot is a way to increase your salary in a lot of fields today.

The public sector is one of the few places that still functions the old way. You will never get the same pay that you do in the private sector - especially if you're in a highly skilled field - but everything is set up to retain people. There tends to be a more-regular progression in salary, at least to an upper limit. And the pensions are set up to improve as you accumulate service credits, and will often include bumps at certain milestones.