We hate to admit it, but the science is irrefutable. We’ve used proven research tools to back it up.
If you want a pay rise (certainly in some professions) the most effective option is to switch jobs.
For almost a decade we’ve advocated for weekly pulse checks. At worst, fortnightly or monthly. Now even a bad manager/leader can afford to spend 30mins with their team members once a quarter.
A regular conversation about the person, the mission, the constraints, the supports and engagement is a bare minimum. It opens up an opportunity to talk about reward and recognition (amongst other things).
If you don’t do it because you care, at least do it because it will save you all the hassle and costs associated with losing good staff…and having to replace them.
You’ll invariably be paying more for the replacement and the recruiting fees, not to mention disruption and onboarding costs.
I think you get our point.
Okay, so here’s the research…
Data consistently demonstrates a significant pay gap between employees who switch jobs and those who stay. The median year-over-year increase in annual pay for job switchers was above 15%.
In stark contrast, employees who remained in their roles saw average pay increases of only 7% to 8%—roughly half the gains realised by their job-changing counterparts. (https://www.statista.com/chart/31032/median-year-over-year-change-in-annual-pay-in-the-us/).
Most companies operate with capped annual salary increase budgets, often limiting raises to a modest 2% to 3% per year. Even high-performing employees who receive a merit-based raise may only see an increase of around 5%. (https://au.jora.com/blog/moving-jobs-for-higher-salary/).
Australian Treasury analysis found that job switchers receive wage gains 9 percentage points higher than those who stay in their roles, equivalent to approximately $5,700 annually for median-wage earners. This relationship persists even after controlling for cyclical economic factors. (https://treasury.gov.au/sites/default/files/2019-11/p2019-37418-jobswitching-v2.pdf)
For instance, a lawyer with 4 years of post-admission experience (PAE) in a mid-tier Melbourne firm earning a typical salary of around $145,000 could secure a role in a top-tier firm for $160,000 to $180,000, representing an immediate increase of 10% to 24%. (https://beacon-legal.com.au/wp-content/uploads/2024/07/Salary-and-Market-Report-July-2024.pdf)
The Reserve Bank of Australia’s analysis using HILDA (Household, Income and Labour Dynamics in Australia) survey data confirms that people who move jobs generally gain higher-than-average wage increases. The RBA notes that higher job mobility tends to be associated with higher aggregate wages growth.
What can Employees do?
- Be strategic. Understand what’s great about your current job.
- The grass is not always greener. Some things cannot be quantified. What are you willing to give up?
- Create a two-column page and be as objective as you can on what you’ll lose and what you’ll gain by switching.
- Consider the loss of long-service leave entitlements with your current employer…
- As well as probationary terms with the new one.
If you still want to go ahead and are an accountant or lawyer in Perth, do speak to us. +61 8 6377 7607 – saarrah@marvinHR.com – Saarrah Mathinthiran
What can employers do?
- Authentically, specifically and regularly connect with your employees about thei rkey engagement factors (Reward, Recognition, Voice, Choice, Learning & Legacy).
- Clarify mission, objectives, roles and responsibilities.
- Empower, encourage and help them network and grow in your organisation.
- Maximise their strengths and compliment their weaknesses.
- Protect your culture and get rid of any silly rules.
If you’re unsure how to do this, call us on +61 8 6377 7606 – nick@marvinhr.com – Nick Marvin
