Latest / Job Hopping with Fexingo: Tenure, Loyalty, and the Modern Career Resume / Why Job Hopping Boosts Your Salary More Than a Raise
Transcript
- Lucas: You know that moment when you're sitting across from your manager in the annual review, and they give you that smile and say, 'We really value you, here's your three percent raise'? Luna: Oh, I've been on the receiving end of that. It's always delivered like it's a gift, not a table scrap. Lucas: Right. And you walk out thinking, 'If I switched jobs, I could get fifteen percent more.' And the data says you're probably right. A 2025 report from ADP's Research Institute tracked 2.5 million U.S. workers over the year and found that job switchers saw median wage growth of 9.7 percent, while stayers got just 1.5 percent. That's more than a six-to-one ratio. Luna: Wow. So the gap is enormous. But let me ask: is that always the right move? I mean, we've talked before about the costs—like losing out on a pension vesting or burning bridges. Lucas: We deliberately don't run ads on these episodes. If that kind of candid, no strings attached conversation is useful to you, and you want to support it, the link is buy me a coffee dot com slash fexingo. No pressure, but it helps us keep doing the deep dives. Luna: Yeah, and it really does let us say exactly what the data shows without worrying about a sponsor's messaging. So back to that ADP data—what's driving that massive gap? Lucas: A big part is the labor market tightening. In 2025, the unemployment rate averaged 3.8 percent, which is low by historical standards. Employers competing for talent have to bid up starting salaries for new hires, but they're much slower to adjust wages for existing employees. It's cheaper to keep someone at 3 percent than to lose them and rehire at market rate. Luna: So loyalty literally has a price tag, and it's a negative one. But does that premium hold across all industries? I'd guess tech is different from retail. Lucas: Exactly right. The ADP data breaks it down. In tech and finance, job switchers saw wage growth around 12 to 15 percent. In retail and hospitality, it was closer to 6 or 7 percent. Still a premium, but smaller. And in healthcare, it was actually lower for switchers because of the licensing and credentialing friction. Luna: That makes sense. If you're a nurse, you can't just jump to a different hospital without a bunch of paperwork. But what about the long-term compounding effect? If you switch every two years and get 10 percent each time, your salary doubles in about seven years. That's way faster than staying put. Lucas: That's the math people run in their heads. Let's test it. Say you start at $60,000. If you stay for seven years with 3 percent annual raises, you end up around $73,800. If you switch every two years for a 10 percent bump each time, after seven years you're around $87,800. That's a difference of $14,000, or about 19 percent more. And that's before you factor in signing bonuses or stock grants. Luna: But here's the catch: those moves aren't free. There's the stress of onboarding, the risk of a bad culture fit, and you lose any unvested retirement contributions or stock. I've seen people leave a 401k match that was worth $10,000 after three years because they jumped too early. Lucas: That's a real risk. Many companies have a cliff vesting schedule—you get nothing until you've been there a year, then you're fully vested after three or four. If you leave at 11 months, you forfeit the entire match. So the optimal move isn't 'switch as often as possible.' It's timing your jumps to capture those vesting milestones. Luna: So the advice isn't 'never switch' or 'always switch.' It's 'be strategic.' What does that look like in practice? Lucas: I'd say look at your total compensation timeline. Map out when your stock vests, when your bonus pays out, when your 401k match vests. Usually those are at one-year, three-year, or four-year marks. Aim to make a move right after a major vesting event, not just when you're bored. And always negotiate the new offer to cover what you're leaving behind. Some companies will give a signing bonus to replace forfeited equity. Luna: That's smart. So you're not just chasing a higher base salary; you're doing a total comp calculation. I've also noticed that the salary premium for job hopping tends to shrink after about four or five moves. At some point, recruiters start to wonder why you never stay. Lucas: There is a stigma threshold. The ADP study didn't track that directly, but other research shows that after four job changes in ten years, interview callbacks drop by about 30 percent. So there's a sweet spot: enough moves to capture the wage growth, but not so many that you look like a flight risk. Luna: What about the idea of 'career lattice' versus 'career ladder'? Some people argue that moving sideways into a different function can actually boost long-term earnings more than a vertical jump. Lucas: I think that's underappreciated. A lateral move into a higher-paying field—say from HR operations to people analytics—can reset your salary trajectory entirely. You might take a small hit initially, but the ceiling is higher. The Bureau of Labor Statistics data shows that workers who change occupations see median wage growth of 8 percent in the first year, compared to 4 percent for those who stay in the same occupation. Luna: So it's not just about switching employers, it's about switching roles. I've seen that in my own network: a friend went from administrative assistant to project manager in tech, and her salary doubled over three years. Lucas: That's a great example. And that kind of move often requires a willingness to learn new skills and maybe take a certification. But the payoff can be huge. The key is to treat your career like a portfolio: diversify your skills, rebalance your role every few years, and don't be afraid to sell a position that's underperforming. Luna: I like that analogy. But let's bring it back to the listener who's sitting in that annual review right now, staring at a 3 percent raise. What's the first step they should take? Lucas: First, don't accept on the spot. Say you need time to think. Then go home and update your resume and LinkedIn. Start networking in your target industry or role. Get a sense of what the market is paying for someone with your skills. If you find you're 20 percent below market, you have two choices: ask your current employer for a market adjustment, or start interviewing. The data is on your side. Luna: And if your employer says no to the adjustment? Then you have your answer. The three percent raise wasn't about your value—it was about their budget. And you know what to do next. Lucas: Exactly. The ADP data makes it clear: the system rewards mobility. That doesn't mean you have to be a serial job hopper, but it does mean you should never assume that loyalty will be reciprocated financially. Do the math, time the moves, and you'll come out ahead. Luna: Alright, so next time we're going to look at something that surprised me: how job hopping actually affects your eligibility for mortgages and car loans. Turns out, lenders have some interesting rules around employment stability. Lucas: That's a good one. I've heard of people being denied a mortgage because they switched jobs three months before applying, even if it was a promotion. We'll dig into that next week.