Monday, November 23, 2015

Research: Internal Moves Smarter Than Job Hopping



Job hopping has become more prevalent, especially as workers look for better paychecks and opportunities. But could you be making a mistake by leaving your current job, one that will hurt you financially and professionally in the long run?

New research from The Wharton School of the University of Pennsylvania finds that workers who take advantage of different opportunities in their organizations not only get a pay raise with these moves, but they also receive greater responsibilities. This includes doubling the number of people they supervise and receiving a more advanced title.
While workers who job-hop to another company often get a pay raise, they don't tend to also garner a bigger job title or more responsibility. Instead, the job is pretty much the same as their old job, and they are supervising about the same number of people.

Researchers say that while employees receive pay boosts with an internal job move, an external move may not have as much potential.

"[W]hen you move across firms, you get a pay raise — maybe 20%, or something like that. But what happens is, your time until the next promotion [is often delayed], so the trade-off there is a little more complicated. It does suggest that internal moves are quite important in moving ahead in your career," says Matthew Bidwell, a management professor and one of the researchers.

Still, Bidwell says no one should believe that this means they shouldn't accept a job at another company. You just need to be aware that while you'll get a bigger paycheck, a promotion may be slower in coming.

"I get a bit nervous when people tell me about their career plans: 'I’m going to go to this job. There’s not a lot of head room, but I’ll get great experience and I’ll use that experience to get hired into a higher-level job somewhere else.' That turns out to be quite a hard transition to make," he says. "So find a job where there is a room to grow inside the organization. You may not want to stay at that organization forever, but a least get a rung or two up the ladder, enabling you to move out to a higher rung elsewhere. That seems like a smarter career strategy."

Recent research shows that while 83% of millennials admit that job hopping may not look so great on a resume to potential employers, 86% agree it won't stop them from pursuing their professional or personal passions. 

Even baby boomers have about 11 job between age 18 and 48, no longer believing they can stick with an employer for 30 years and then collect a pension and gold watch.

But based on this new research, it may be a good idea to consider whether you've really plumbed the possibilities at your current company before making a leap.

"It is those internal moves that lead to advances in pay, rank and responsibility, and provide long-term gains in pay and satisfaction,” Bidwell says.

13 comments:

Unknown said...

While this may be true at mid to low level managerial jobs, my experience has shown the opposite for higher managemebt, especially C Level positions. Many times a great employee is kept in the same position with little chance of advancement, since they do such a good job. Or maybe the current management above them is the same age or younger. So there is nowhere to go. The job market is like a pyramid, with less room at the top. In my last company, I was not seen as CEO material, even though I was highly respected and the "go to guy" in my field. However, I took a CEO position with a smaller company, with more pay and overall responsibility, even with fewer reports. Plus the experience will help if I want to move to a ledger company. As a baby boomer, I have seen the advantages of moving, allowing me to achieve my dream job.

Unknown said...

While this may be true at mid to low level managerial jobs, my experience has shown the opposite for higher managemebt, especially C Level positions. Many times a great employee is kept in the same position with little chance of advancement, since they do such a good job. Or maybe the current management above them is the same age or younger. So there is nowhere to go. The job market is like a pyramid, with less room at the top. In my last company, I was not seen as CEO material, even though I was highly respected and the "go to guy" in my field. However, I took a CEO position with a smaller company, with more pay and overall responsibility, even with fewer reports. Plus the experience will help if I want to move to a ledger company. As a baby boomer, I have seen the advantages of moving, allowing me to achieve my dream job.

Unknown said...

I disagree, depending on the career goal you are trying to complete job hopping could open you up to a new way of thinking that you cannot experience internally. I personally am looking for the design experience, not necessarily the management experience. So for me job hopping works much better than internal transfers. Moreover certain companies do not make internal transfers easy, job hopping seems to be the only option for me.

Anita said...

Unknown,
Keep in mind that this is just one study, and it's just one more piece of information to consider in your career. As I've always said, there is no Holy Grail of workplace advice. You have to make the decision that is right for you.

Anonymous said...

Based on my experience over a 37 year career I have to disagree with the general argument the internal moves are smarter than external moves (the term "Job Hopping" is an unfortunate choice of words for this kind of article that should advise versus spin). Contrary to what the article claims, organizations, particularly large organizations, are not and should not be eager to provide lots of promotions with associated title escalations and subordinate increases. Those that do inevitably become top heavy and frequently require radical reorganization to correct the problem. Also, don't confuse increases in responsibilities and direct reports with increasing impact and opportunity. For those employees where the path forward and upward in the company is very visible and transparent then by all means go for it. But for others where it is less clear and filled with barriers (which will be the majority of people who are even considering these two options) then don't hesitate to take an external move. My own experience: After the first 8 years as an engineer at a large well known company things started to get bogged down. I took an external opportunity for an immediate promotion and salary increase. After only 2 years the new company got purchased and moved so I jumped back to the previous company and got another promotion, salary increase and funding if my MBA. So I ended up two promotions and other benefits that I would not have gotten if I had not left and come back. After another 5 years with this original company I left to start up my own company and hit my career home run financially. I retired for 8 years to follow my kids through high school and college and then went back to the original company as a consultant making more money than most of my colleagues who toughed it out with the original company for 30+ years. From talking to others I found that my story is not that unique. External moves, even if they are forced upon us, are very often the best thing that could happen to us.

Anonymous said...

We would need to know a lot more about methodology to take the conclusions seriously. Proportions of the two populations have different characteristics that will affect their career progresssion.
For example:
People who move because they feel they are overlooked for 'deserved' promotion - as may happen repeatedly
People who leave before their failures become apparent.
Those who move for reasons not associated with the work, such as partners whose job location moves due to promotion or transfer - they may have different ambitions...
On the other side - those who stay put through inertia or apathy.

Personally, I would recommend moving company when (and only when) there is a compelling reasonl; these might include:
Poor management of the current company or division - at a level that will become visible in its results.
Mismatch between your skills (or development requirements) and the opportunities that could be available.
Significant opportunity that could not be available in the medium term without such a move.
Personality clash (be careful - more than once will look like a personality defect)
CTO

adasplanet said...

It all balls down to which makes you more comfortable. Some like to have a regular change of scene and challenges, while most do not really like change.

Todd Stahlnecker said...

I also concur with the statement that some employers do not make internal advancement an option. One design firm I worked for would use the higher job positions as bait to attract new hires with. Many were hired at that firm to positions that I aspired to that had less ability than I had developed. Eventually I found myself performing work that was fully three promotions above what my current job title was. Only when I found another job with a competitor and turn in notice did they offer to promote me.

My conclusion was that I didn't want to stay with an employer that had to be "threatened" before they would take action to promote from within. Their counter offer only matched what my new job was offering thus I would be at the "bottom" of any further promotion cycle with either job. I took the new job only to find that this firm also had the practice of no internal advancement.

However, the corporate experience I gained from seeing the methods and engineering approaches by these very different firms gave me the knowledge and contacts I needed to eventually start my own firm. Had I stayed with either firm, my window to the world on consulting engineering would have remained with a field of view too narrow to have accomplished this.

Anonymous said...

It really boils down to opportunity. I made 2 internal moves in my 1st 15 years with my company but it did not help very much. In my 15th year, I was looking for an external job when my company offered me an expat position. I took that up and climbed 2 grades in 3 years. I have switched into 3 different positions in the last 6 years. I'm still with the same company at a different position because I enjoyed the challenges offered.

Anonymous said...

Are the study groups comparable? The reason I ask is that in my experience companies tend to be harder on internal candidates than outside candidates. Internal candidates are well known, including weaknesses, and companies often choose to roll the dice on an external candidate. Very frequently, the external hire turns out to be weaker than internal choices.
The point here is that people who succeed as internal candidates may be a stronger cohort than those who are external candidates. Comparing their relative long term successes may then be skewed, as the difference may come down more to high potential internals versus average externals.

Anita said...

This has obviously touched a nerve with a lot of people. I'm grateful so many of you have taken the time to share your experiences.

Anonymous said...

I wanted the pension and gold watch. Have over 14 loyal years with the company, above or well-above average performance reviews and try to be as useful as possible. Irrelevant, the company has the most lawsuit avoiding way to dispose of employees. It is called "surplussing." Your position is no longer needed and you have 60 days to find another position in the company or get laid off; avoids the labor and expense of planning for the retention of employees. The down side? Before the "surplus" train is planned to roll undesirable employees are moved from a "stable" position to a useless function, created from thin air, to be marked for layoff. They say "we didn't get rid of you, we got rid of your job so you are no longer needed." Avoids all of those EEO considerations hindering a straight dismissal. Applying for another internal jobs results in cancellation of the request or an up to 61 day delay in deciding, assuming a "hiring freeze" isn't put in place. Being an "expensive" native U.S. employee, on the "old" pension plan (and declined cashing it out a month before the surplus) or in an EEO protected category provides no safety from an unethical manager bent on being rid of you. Great scheme isn't it.

Anonymous said...

I am concerned with the flawed premises of this study: a) It assumes that there is upward mobility, b) that the company considers internal promotions at least equally as valuable as external hires, c)there is the ability to move around in the organization, and d) considered IT position at all.
With that said: Organizations have purposefully made key decisions that are indicative of the fact that they do NOT wish to have any loyalty toward employees. The cultivation of executives from mid-20th century were in the creation of leaders. Probably because there was a significant pool of veterans (possessing cultivated leadership skills.) With the 1980's came the transition of "Everyone for themselves" mentality (Reagan fired the ATCs. Business took it as an opportunity to divest themselves of organized labor and loyalty went out the window.)
Now, executives are required to be managers, instead. This is indicative of more C-levels possessing CPAs. (Not that CPAs cannot lead, but then, Accounting programs do not even touch a single leadership skill.)
On the other side, Deming wrote about the 21st worker being "An Intelligence Worker" where they are not restricted by nation-borders or micro-economies. Their tools and skills exist in their mind. So, if you have highly sought after skills why stay where you are and wait to be noticed like a shy girl at the prom waiting to dance?
Don't know if this is significant. Just food for thought.