If you’re hoping for an increase in pay, commitment to your current job may be a bad thing.
Studies are showing that the average raise in pay for 2014 (and since the recession hit in 2008) is 3%–significantly lower than what it used to be. But it gets worse.
The Department of Labor Statistics calculated the inflation rate at 2.1% which, in effect, makes the average raise just below 1%. Yes, that number is correct. One percent. For an employee that makes $10.00 per hour, that would essentially add up to $0.10 per hour more. For an employee that brings in a $100,000 salary, it would effectively add up to an extra $1,000 per year—or about $83 extra per month. In short, it’s not much.
So why is the number so low? Market trends allow employers to freeze payroll and (in some cases) decrease salaries. Back in 2008, 75% of companies surveyed by compensation consultant Towers Watson said they were freezing wages. Today that number is significantly lower (around 4%), but it is still common practice for companies to cut costs by cutting back on raises. For employers reserving money to stay afloat, that means holding back on promotions and title changes too, since those tend to come packaged with a healthier salary. Basically, the longer you stay at a job, the more likely you will be stagnant.
Here’s something else that makes switching jobs a more attractive choice: the average salary boost from changing employers is between 10% to 20% – a massive jump from a typical raise. The likelihood of a better position and title is higher, too. Companies may have to cap employee raises and benefits, but if they are looking for someone to fulfill a position, most are ready to pay the price for the perfect person.
Of course, there are most certainly benefits to company loyalty. The potential for job growth is still there, even if it takes longer, and there are plenty of employers who are turned off by candidates that count “jumping ship” as a hobby. That said, the pros outweigh the costs, and if moving on is a better career choice, don’t be afraid take it. For many workers in today’s economy, loyalty simply won’t pay the bills.