Latest / The Internal Move Podcast with Fexingo: Lateral Roles, Internal Transfers, and Staying at Your Company / The Silent Career Killer Inside Your Company
Transcript
- Lucas: There is a specific kind of quiet panic that sets in around year five of a job. You’ve mastered the systems, you know which stakeholders to call when things break, and you are effectively running half the department without the title. But when the annual review comes around, the raise is two percent. Or maybe it is four percent if you push hard enough. And you realize you have become indispensable to the workflow but invisible to the budget. Luna: It feels like you are paying rent on your own competence instead of getting equity in it. Why does the market punish stability more than it rewards it? Lucas: Because companies have structural incentives to keep you exactly where you are. Let us look at the data from Robert Half’s latest compensation guide, which came out earlier this month. They found that employees who stay with one employer for more than three years see their salary growth lag behind those who change jobs every two or three years by roughly twelve percent over a ten-year horizon. That is not a rounding error. That is a massive drag on your compound annual growth rate. Luna: Twelve percent is huge. Is that just about inflation catching up, or is there something deeper happening with how companies value tenure versus external hires? Lucas: It is mostly about the math of base salary. When you join a company, they offer you market rate. If you accept it, you are now the baseline. Next year, they give you a standard increase based on performance and inflation. Maybe six percent. Then you ask for a promotion. The new title comes with a bump, sure. But here is the trap: the person replacing you next year will come in at that higher number. You have just anchored the ceiling for your successor. Luna: So you are subsidizing the future hiring budget of your competitors by accepting incremental internal raises. Lucas: Exactly. And then there is the issue of wage compression. This happens when new hires enter at a higher starting salary than existing employees doing the same work. It sounds unfair because it is. Companies do this because they have to pay premium rates to attract talent in a tight labor market. So your colleague who joined last year makes twenty percent more than you, even though you have twice the experience. And you cannot easily argue for a catch-up raise without creating a pay equity scandal. Luna: That creates this weird dynamic where you feel undervalued but also guilty for wanting more money since everyone else is struggling too. Lucas: Right. It paralyzes you. You start negotiating against yourself. You think, well, I have health insurance. I have a good boss. I don’t have to commute as far. These are real benefits, but they are non-liquid assets. You cannot spend them in retirement. When we talk about career strategy, we need to separate liquid compensation from soft perks. Soft perks decay. Liquid comp compounds. Luna: But isn’t there a risk? What if you jump ship every two years and end up with a resume that looks scattered? Doesn’t that hurt long-term credibility? Lucas: That used to be true. Ten years ago, job hopping was a red flag. Today, especially in technology and professional services, it is seen as proactive skill acquisition. The market has shifted. Recruiters now expect candidates to have exposure to different cultures and stacks. The real risk is staying put so long that your skills become stale. You stop learning because you already know how to do the job. That is the silent killer. Luna: So the danger of leaving is perceived instability, but the danger of staying is actual obsolescence. Lucas: Precisely. And let us bring in the donation segment here because this topic hits home for a lot of listeners who are trying to make these tough calls. If we've helped you think through a career move or decision, a couple of dollars a month is genuinely what keeps these going. You can support the show at buy me a coffee dot com slash fexingo. It takes the pressure off ads and lets us dig into the nitty-gritty like this. Luna: Yeah, small contributions add up and help us keep the research sharp. Thanks for listening. Lucas: Back to the mechanics of this. There is another layer to this, which is the golden handcuff effect. This is common in senior roles or specialized fields like finance or legal tech. Your base salary might be stagnant, but your stock options or deferred compensation vest over time. Suddenly, leaving means walking away from a significant lump sum. People stay in roles they hate because the financial exit cost is too high. Luna: That is basically a cage made of equity. How do you calculate when the handcuffs become heavier than the opportunity cost of staying? Lucas: You have to run a simple projection. Take your current unvested equity. Divide it by the months until full vesting. Now compare that monthly gain to the potential salary bump you could get elsewhere. If the outside offer is forty percent higher, you usually need to stay for years to justify leaving early. But here is the trick: many people do not negotiate the initial equity package aggressively enough. They accept the standard grant and assume it will appreciate magically. It often does not. Luna: So the handcuffs are only strong if the underlying asset is actually growing. Otherwise, you are just holding depreciating paper. Lucas: Exactly. And this brings us to the psychological aspect. We talked about the year-five panic earlier. There is a phenomenon called status quo bias. Humans are wired to avoid loss more than they seek gain. Leaving a job feels like a loss of security, familiarity, and social capital. Staying feels safe. But in economics, safety is an illusion if the trajectory is downward. You are slowly losing purchasing power relative to your peers. Luna: It is interesting that we treat job changes like personal failures rather than strategic adjustments. Why do we carry so much emotional baggage about loyalty? Lucas: Because our parents’ generation worked for one company until retirement. Loyalty was reciprocal. The company provided pensions and job security; you provided decades of service. That contract is broken. Modern companies have dismantled pensions. They rely on gig workers and contractors. The reciprocity is gone, but the expectation remains. You are playing a game on old rules while the board has been flipped. Luna: So you have to rewrite the social contract in your own head. Loyalty should be to your career, not the org chart. Lucas: Yes. And that requires a new metric for success. Stop measuring your worth by your title. Measure it by your optionality. How many doors are open to you right now? If the answer is zero, you are vulnerable regardless of your salary. Optionality comes from recent, relevant experience. And that rarely happens when you have been in the same seat for five years. Luna: What about the internal transfer route? Can you beat the system by moving sideways within the same company? Lucas: Internal transfers are tricky. On paper, they look smart. You keep your tenure, you keep your benefits, you learn a new function. In practice, they often reset your salary clock. Many companies have caps on internal raises. You might move from marketing to product management, but your base pay only increases by three percent because it is an internal move. Meanwhile, an external candidate coming in would command a fifteen percent premium. You lose the market adjustment. Luna: So you trade potential upside for stability. Is there ever a case where that is the right play? Lucas: Yes, if you are severely underpaid relative to the market. Sometimes you have to take a lateral move to escape a bad manager or a dying division. You use the internal move as a rescue boat. But you should not view it as a growth strategy. View it as a maintenance strategy. You maintain your employability, but you do not maximize your earnings potential. Luna: Rescue vs. Growth. That is a really useful distinction. Most people confuse the two. Lucas: They do. And this confusion leads to burnout. You stay in a role that offers no growth, hoping that hard work will trigger a promotion. But promotions are rare. They are given to people who are visible and replaceable. If you are too deep in the weeds doing the work, you are invisible to leadership. You need to be on the surface, building relationships, showing results. Internal transfers can help with visibility, but they rarely fix the pay gap. Luna: So visibility is a currency. And staying in the same role too long devalues that currency because you stop making new connections. Lucas: Your network becomes homogeneous. You only know the same people. When a crisis hits, or when you need a referral, you have no fresh channels. Job hopping forces you to build diverse networks. You learn how other companies operate. You understand broader industry trends. That context is invaluable. It makes you a better strategist, not just a better executor. Luna: I think a lot of professionals confuse execution with strategy. They think doing the job well is enough. But strategy requires perspective. Lucas: Spot on. And perspective costs money. It costs the discomfort of leaving. It costs the risk of a new environment. But the return on investment is significantly higher than the comfort of the known. We see this in the data again and again. The highest earners are not the ones who stayed the longest. They are the ones who moved strategically. They timed their exits. They negotiated aggressively. They treated their career as a portfolio of assets, not a single bond. Luna: A portfolio implies diversification and active management. Passive holding is what kills returns. Lucas: Exactly. Passive holding is what keeps salaries flat. Active management is what drives them up. So my advice for anyone listening who feels stuck is to audit your optionality. Update your LinkedIn. Talk to recruiters. Even if you are not looking, you need to know what you are worth. If the market says you are worth thirty percent more than you are making, you have a decision to make. Stay and fight for a correction, or leave and take the correction elsewhere. Luna: And if you stay, you do it consciously, not because you are afraid to move. There is a difference between choosing comfort and being trapped by inertia. Lucas: There is. And once you choose consciously, you can enjoy the perks without the resentment. You can stay for the family, for the location, for the project. But you stay because you want to, not because you have to. That shift in mindset changes everything. It turns a prison into a choice. Luna: Choice is the ultimate luxury in a career. Everything else is just logistics. Lucas: Well said. So as you navigate your next few years, remember that stability is not free. It has a price tag. Make sure you are getting paid for it. Or better yet, find a way to get paid to move. Luna: Here is to finding the opportunities that pay you to grow.