Understanding Why People Change Jobs Will Help You Create a More Successful Startup
Your employees always have options.
PHOTO CREDIT: Getty Images
As a founder, if you lose touch with the motivations of your workforce, you're going to have a hard time keeping employees. And in the early stages of a company, talent retention is key. Hope and purpose can sustain things for a while, but eventually every employee looks for upward mobility and a path to success.
So, that's why it's important to understand the landscape from their point of view.
According to a recent survey from Robert Half, 64 percent of young professionals see regular job changes as beneficial to their careers. Among Millennials, that number is 75 percent. It's not hard to see why: Switching jobs is almost always more profitable than long-term employment at a single employer.
However, while job hopping might be more lucrative in some circumstances, it's not always the best choice. Before turning in their two weeks' notice, employees must consider their situation carefully to decide whether a change in direction is the right career move.
Advantages and Disadvantages of Job Hopping
The simple truth is that people who job hop typically make more money than people who don't.
Quick exits provide other benefits besides money. People who change jobs also have opportunities to develop broader skill sets, which they can then leverage into promotions or further opportunities with employers.
Loyalty has its perks too, though. People who stick with a single company don't have to upend their lives every few years to move, nor do they have to deal with the financial consequences of employment changes.
For example, Chime Bank notes that most employers with 401(k) matches operate on a vesting schedule of at least three years. That means employees who leave the company early could miss out on a lot of free money. Young employees might not think much of retirement savings, but they should--30 years of compound interest is no laughing matter.
How to Know When to Change Jobs
If an offer for a new position comes with a fatter paycheck, don't sign on the dotted line before considering these factors:
1. Real Dollar Value
You might think $100,000 is always more than $80,000. Though technically true, that gap can dry up quickly in the face of mitigating factors.
If the job is in a different city, don't look at the higher salary in the same light as your current paycheck. A six-figure salary in San Francisco--where a family of four earning more than $100,000 can qualify for low-income housing--doesn't go quite as far as it would in Lubbock, Texas. Instead, use a cost-of-living calculator to figure out how much of your extra money could be eaten up by higher expenses. Convert the offer into its value in your current location, then consider whether you would be happy with that number.
2. Insurance and Benefits
Health insurance in the United States is a delicate subject. Most salaried workers depend on their employers to provide health coverage as part of their benefits packages. Some companies negotiate great deals on fabulous insurance for their employees, while others offer the bare minimum.
Ask your prospective employer about the total benefits package, not just the salary. Consider factors like health care, tuition reimbursement, stock options, retirement contributions--anything that might sway your decision.
3. Company Culture
As you speak with recruiters at your prospective employer, ask why they like to work for this company. Request a tour of the office. If people look miserable, you might be miserable, too. It's up to you whether the salary would be worth the change in environment.
Check online review sites, like Glassdoor, to see what current and former employees say about the company. Don't let a few bad reviews change your mind, but if you see a pattern of disgruntled ex-workers, weigh their stories in your decision.
4. Rise to a New Challenge
Whether they know it or not, everyone is an entrepreneur charged with growing their personal brand, at a minimum. Boredom was the number one factor driving the search for a new job in a recent survey by the Korn Ferry Institute.
A new job might scratch that itch, or it may be time to make the leap or start a gradual transition to being your own boss and join the 36 percent of Americans who do some form of freelancing, according to a survey by Upwork and Freelancers Union.
Job hopping doesn't have to be literal. Moving from a job to freelancing and back several times is not uncommon. When I first went out on my own seven years ago, I did the math and realized I could get one client and make more than my current job with far less stress.
And that's the kind of no-brainer choice I never want to give my current employees. I want them to be able to succeed with me.
BY Entrepreneurs Organization