November 30, 2022

Pater Das

Business and General

The Pros and Cons of Job Hopping

Once upon a time, job hopping was seen as unprofessional and unnecessary. In fact, it was relatively common to spend your entire career working for one employer, gradually working your way up the company ranks and receiving regular pay raises along the way.

But these days, maintaining an upward career trajectory usually requires a little more job mobility. That means keeping your eye open for new opportunities and leveraging your current salary and benefits for something better.

But while job hopping is often necessary, there are instances where it can do more harm than good. Let’s take a look at the pros and cons of job hopping, and go over some strategies for doing it.

What is Job Hopping?

Job hopping refers to the idea of switching employers more than normal, usually after less than two years at a company. Job hopping often has a poor connotation because some people think it means you can’t handle commitment or that you’re a picky employee.

Pros of Job Hopping

May earn more money 

One of the most common reasons that workers leave companies quickly is because they can earn more when they switch to a new employer. Research from Bloomberg shows that when you stick with your current employer, you’ll get a 4% raise on average. But when you go somewhere new, you’ll get a 5.3% raise. That kind of difference can add up over time.

May learn new skills

Every company works differently, even if you’re in the same industry. When you job hop, you may be able to learn new skills that you wouldn’t have learned in your previous position. And if you previously worked for a company that was behind the times, moving to a new role could help you catch up.

Cons of Job Hopping

Will lose benefits 

When you’re a new employee, you often have to stay with the company for a certain period of time before you’ll be eligible for benefits like paid vacation, sick days and 401(k) contributions. The exact amount of time you have to work to qualify for those perks depends on the company and your employment contract. 

Some employers require that you work for six months before you can accrue significant vacation time. Also, some will provide more vacation days the longer you’ve been there. 

There may be real financial implications to job hopping. For example, if you have to work for one year before you can receive matching 401(k) contributions, that is real money that you’ll lose out on. Many companies have a vesting schedule, which means that you will not receive 100% of the employer contributions until you work there for a specific amount of time.

For example, let’s say your new company has a five-year graded vesting schedule. This means that you will earn 20% of the employer contributions every year. If you leave before five years, you will receive a prorated amount of employer contributions. 

You should factor this in when switching companies. Make sure that the salary increase and other benefits will make up for any lost 401(k) matching contributions.

In some cases, you may be able to negotiate these benefits before you start work, but it depends on the employer and what they provide for other workers. 

Could look bad to future employers

Employers may frown upon job-hopping, so having a slew of one-year stints could look bad on your resume. 

If you do have more than two instances of leaving a job after less than a couple of years, consider addressing it in your cover letter. If you don’t want to discuss it in a cover letter, then be prepared to talk about it during an interview. 

How to Job Hop Correctly

If you’re job hopping because of a poor work environment, you should still try to be polite and civil when you leave. Everyone you know is an industry connection, and if you damage one of those connections, it could hurt you in the future. You never know who will be your future boss or team member down the line.

During your exit interview, be mindful when giving constructive feedback so it doesn’t come off the wrong way. 

If the main reason you want to leave is financial, try negotiating a raise before you look for a new gig. Your current employer may be willing to increase your salary. If they won’t give you a raise and you want to stay, you could start applying for new jobs and use an offer letter as a bargaining chip.

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Zina Kumok
Zina Kumok

Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok

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