Job hopping in tight labor market can help you snare a fatter paycheck

The company offered her a job with the same title and essentially the same responsibilities but boosted her annual salary by 25 percent. “If I really want to make significantly more money, I knew I had to switch jobs,” she said. And like many of her friends, Warsak was confident that finding a new position in this economy was not going to be difficult. “I wanted to get a year under my belt, but after that I knew I could find something that paid better,” she added.

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But while younger workers like Warsak can job-hop to catapult their salaries, the overall impact on wages from the tight labor market is far from robust for older and more experienced workers. “We’re seeing a much more subdued pickup in wage growth, because a lot of the power has shifted from workers to companies,” said Michael Pierce, senior U.S. economist at Capital Economics. With technology making it easier for firms to automate a greater number of tasks and the option of cheaper offshore manufacturing, the need to raise wages is muted.

The good news for workers, he believes, is that the war for talent is forcing companies like AT&T and SAP to invest more money in skills training for existing workers. Pierce said small businesses, in particular, are telling him that it is harder for them to find qualified workers than at any other time going back to the 1980s and that training is part of the solution. Giving workers new skills, he said, will ultimately make them more productive and therefore more valuable to their employers. “With better skills, employees can bargain for higher wages,” he said.

Pros and cons of job-hopping

Yes, the labor market is tight and switching jobs in this environment can land you a fatter paycheck. But it’s important to keep in mind that a résumé filled with short-term gigs can still be a turnoff for some employers. Keep these pros and cons in mind before you accept that next offer.


  1. You’ll get exposure to new people and new ways of approaching projects and problems.
  2. Chances are good that a move to a new company will give you greater responsibilities and more opportunity to prove your skills.
  3. More money. This is among the top reasons why folks job-hop. A move to a new company can catapult your pay faster than annual raises at your current employer.


  1. Even with a tight labor market, companies still value loyalty. Staying in a job for just a year or two can make employers hesitant to hire and invest in you.
  2. If the economy tumbles and job cuts are on the table, you’re more likely to be among the first to be let go.
  3. Every company goes through a tough cycle. If an employer thinks you’re likely to bail at the first sign of trouble, they might be less likely to offer you the job in the first place.

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