The Costs of Job-Hopping: Why Staying Put Pays Off

Have you ever wondered whether job-hopping is a good strategy for career advancement? Or what it does to your personal relationships?

There is a psychological connection between chronic job-hopping and serial relationship departures when driven by a deeply entrenched dissatisfaction personality, as you will see in a moment.

But first, in August, The Wall Street Journal published an article (paywall) that portrayed job-hopping as generally beneficial to the employee. It led to my office getting a number of emails and phone calls from readers — business owners and parents of job-hoppers — with very different opinions.

While this column has been critical of "helicopter" parents and those who enable their children's poor behavior that often plays havoc with their adult lives, the WSJ article prompted several parents of job-hoppers to ask me if I knew of "anything out there" that their kids could read that might help persuade them to knock it off.

What matters to employers

A recurrent theme common among the parents I talked with could be summed up like this: Old-fashioned values of stability and loyalty still matter to employers and are key to getting ahead on the job. But how do you get that through the thick skulls of young adults who merely see a few more dollars in a paycheck from changing employers every year or two, while chasing emotional fulfillment?

Instead of leading to advancement, constant employment changes can create a risk of falling behind.

And to answer the question, "Is there something out there that could influence job-hoppers to reconsider their view of employment?" — there is indeed. It's a new book, The Insider Advantage: Moving Up, Finding Success, and Building a Career That Lasts, by Wharton professor Matthew Bidwell.

I was sent an advance copy of his book over the summer, and I had the most interesting Zoom interview with Bidwell, a business professor who has put the dots together, leading to a simple and oh-so-valuable conclusion: "The real key to career growth is often staying exactly where you are."

A counterargument on job-hopping

Bidwell challenges the notion that frequent job-hopping is the fastest path to professional growth and higher compensation by showing that "insiders — employees who intentionally build their careers within a single organization — consistently develop a strong competitive edge over external candidates."

He notes that this advantage lies in the value of firm-specific skills, internal relationships and institutional knowledge that takes time to acquire.

Studies show that companies pay external hires 18% to 20% more than internally promoted staff for the same roles, yet these expensive outsiders score significantly lower on performance evaluations during their first two years. They lack an understanding of the existing workplace culture and operational mechanisms, requiring over two years to come up to speed while facing higher rates of voluntary and involuntary departures.

The Insider Advantage proves, through Bidwell's research, that staying put often accelerates upward mobility into positions of true leadership and influence.

"While moving to a new firm can provide an immediate salary bump," he points out, "long-term tenure lets a worker establish trust and climb the organizational ladder more easily and with greater job security."

Bidwell recommends that workers take advantage of internal mobility first and strategically time any outside jumps only once a clear structural ceiling is reached.

Red flags from the real world

I asked a friend of this column to share his opinion about and experience with job-hoppers.

Dr. David D. Schein is an attorney and full professor at the Cameron School of Business at the University of St. Thomas in Houston. He is also a published author and webcaster, with a focus on business, employment, ethics and human resources. He has a very dim view of the benefits of job-hopping.

"In my years as an employment attorney/HR consultant," he says, "I've never heard that job-hopping was a way to manage your career. Bluntly, in evaluating résumés for job hunters, (if an applicant has) a history of being in a position for less than three years, (that tends) to be a red flag.

"When they get to their 40s and 50s, that is a killer (because that's) when others are looking to move into C-suites. That said, employees who face a toxic workplace or other problems should leave ASAP."

On a relationship level

Frequent job-hopping correlates with a higher risk of divorce, according to sociological and economic data. Research indicates that high job turnover and employment instability are closely tied to reduced marital stability.

I asked another friend of this column, psychology professor Dr. Luis Vega of California State University in Bakersfield, to describe the impact it often has on personal relationships.

"Myriad reasons can explain job (or relationship) hopping," he says, "from impulsivity at not missing the next best option, to ambition, to lack of commitment — some of which may involve personality traits unique to the individual.

"For most people, the appeal of job-hopping is the belief that the next opportunity will bring monetary gain and prestige or a renewed sense of happiness. This also is true of relationship-hopping.

"Unfortunately, we are terrible at predicting happiness, what is called affective forecasting. Once the novelty wears off, happiness plateaus, and again we seek the next best thing, a repeat pattern."

He added that, instead of trying to forecast happiness — comparing to the past/future — it works best to focus on comparison of what is possible.

"Notwithstanding barriers that may require change, rather than replacing a job or relationship, it is best to rebuild on existing foundations, where comparisons to the possibilities are easier, and predictability is more assured."

So, if you are thinking of job-hopping, this might be the perfect time to read The Tale of Peter Rabbit by Beatrix Potter. He finally hopped home to his family.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.