Myth busting: Does moving jobs mean better pay?

Myth busting: Does moving jobs mean better pay?

I read an interesting article last week in The Times, (Want a pay increase? Then move to a new job, says Resolution Foundation), detailing the findings of a recent report by a Think Tank, claiming that in order to achieve pay rises, workers will need to make use of “movers’ pay bonuses” (the pay bump one gets when moving jobs). Being a Recruiter, this is a subject we deal with on a daily basis, so I wanted to pen my thoughts on this and answer the question: Does moving jobs mean better pay?

The short answer is yes. A pay rise when moving to a new company is the premium paid to compensate for the risk of the unknown (moving to a company you haven’t worked at before). “Shock horror, a Recruiter extolling the virtues of moving jobs” I hear you cry. Yes, I see the self-serving nature of my answer however there are two things that both employees and employers can do which could avoid the time-consuming process of getting a new job or backfilling an employee.

1) More honest communication from employees

One of the most important questions I ask a candidate, when initially speaking to them about why they are looking for a new role and what they are looking for, is whether they have expressed their current concerns with their boss or management. 50% of the time the answer is no and half the answers of yes are very hesitant and accompanied by vagaries of half conversations and assumptions that lead them to believe the answer is or will be a resounding no. To those who have not spoken to their boss about their concerns, alongside asking why, I tell them to go back and have that conversation. If you want to stay but are not happy because you haven’t had a pay rise or have been overlooked for another promotion, why wouldn’t you give yourself the opportunity to find out why? Also, expressing your concerns & frustrations not only gives your management the opportunity to right it but is also the right thing to do. Why do employees struggle to have these conversations? Maybe they are concerned it will affect how their boss looks at them and will exacerbate their situation or, what is more common in my opinion, is that people struggle to manage upwards. This is a vital skill and one you cannot master without practice. Nothing should come as a surprise and what will happen if you don’t, is that when you hand in your notice, they counter-offer and if you accept the counter-offer and stay, it is hard to recapture the mutual trust that you both had before which is why 80% of all employees who accept a counter offer, leave within 6 months. To quote Lady Macbeth, “what’s done cannot be undone”.

2) Dynamic Pricing

I spent a large part of my career recruiting permanent hires within the UK Banking sector and I was always surprised by the very predictable nature of the outcome from the process of producing an offer for new candidates. Regardless of the candidate’s niche skills or background the offer would, 90% of the time, be a 15% increase on their current base salary. I never understood how a company who price their products on supply and demand, wouldn’t price their biggest asset on the same economic principle. The current job market is the craziest I have seen in my 15 years – the pandemic has accelerated the adoption of new technologies while the rebound from the effects of lockdowns have caused an increase in demand which has led to a decrease in supply therefore companies need to be more dynamic in how they price their current employees to avoid people leaving for better salaries elsewhere. Apparently, it can cost as much as 213% of annual salary to replace a senior executive (factoring in new salary which will be higher, productivity loss due to recruiting, recruiting costs etc.) therefore during times of extreme demand, why not adopt a form or dynamic pricing and offer salary rises significantly above the norm and offer less in more sensible times? Finally, be as proactive as possible and ask the tough questions around numeration and promotion plans. With remuneration, companies who are not being competitive will avoid this conversation and those who are proud of compensating their employees well are happy to openly discuss this.

I will conclude this by saying that this a general view of the current employment market and there will be regional and sector specific variances to this. Finally, the above is based on my experiences which may differ from other people’s experiences.