Loyalty Is Not Rewarded Financially | Career Angles
A LinkedIn article summary to a Business Insider article pointed out, “If you stayed put during the Great Reshuffle, here’s one thing you might not have realized: Those new colleagues who jumped ship from their former company to yours are probably getting paid more. In this hot job market, employers were forced to boost compensation for new hires in order to beat out the competition. It bumped job-hoppers’ salaries 7% on average, Business Insider reports — and existing “employees are catching on.” If companies want to retain their most loyal workers, raises are in order before the “old-timers” head out the door.
There is nothing new to the idea of loyalty not being rewarded. If a $100000 per year person stays and gets a 5% increase, s/he is at $105000. Obviously that is lagging that 8.3% inflation rate and the need to get an 11% raise to break even with inflation (governments take a cut). But let’s wind back to pre-inflationary times when it was less than 2%. That same loyal worker gets their 5% raise and is at $105K. A person changes jobs and will typically receive a 10-15% increase (or more). Each year, that difference is compounded. So using this example:
$115000 vs $105000
Each gets a 5% increase at the end of the 1st year:
$120750 vs $110250
The next year
$126787.50 vs $115762.50
Here’s where most loyal employees get sick.
The first person changes jobs after they get their second raise for a 10% raise whereas the loyal person accepts their 5% increase
$139466.25 vs $121550.63
And the gap widens each year.
Most people I know cannot afford to give away almost $40000 so easily but that is the way the system is set up.
Ⓒ The Big Game Hunter, Inc., Asheville, NC 2022
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