What will happen to jobs in 2 decades
You have this major disadvantage if you do not change jobs every 2 years
Job changes are still a controversial topic. While just a few decades ago it was still the ultimate to get a permanent employment contract after completing an apprenticeship or degree and then to spend your entire professional life in one and the same company, new trends such as job hopping or the patchwork career are now constantly being discussed . We are heading towards a future of fixed-term employment, freelance work and constant job changes, experts are certain of that. Cameron Keng calculates on Forbes why this development could be extremely worthwhile for your wallet.
1. Germans should lose their fear of changing jobs
2. No increase in salary means a "decrease in salary"
3. If you want to increase your salary, you should change jobs - regularly
4. But aren't frequent job changes a no-go on the résumé?
5. Every change of job also means personal development at the same time
Germans should lose their fear of changing jobs
German society loves security, that much is clear. Insurance, home ownership, open-ended employment contracts - all of this sounds like heaven on earth to our ears. Hardly any other people invest their money as conservatively and with as little risk as we Germans. Our greatest fear is not war or environmental degradation, but poverty and social inequality. If the account has sufficient funds, we are fine, at least that seems to be the widespread opinion. While the majority of Germans seem to be afraid of poverty or social inequality, unemployment is far behind. Actually strange, after all, financial prosperity and work are inextricably linked, aren't they?
Anyone who can get hold of a permanent contract in a large, at best international company and slowly climb the career ladder and live as an industrial civil servant has a carefree life, right? Wrong, say experts. Not only is job security in Germany steadily declining and open-ended contracts are becoming more and more rare, but frequent job changes actually improve the financial situation. Cameron Keng did the math once and came to an astonishing result:
Employees who change jobs less than every two years earn up to 50 percent less.
In addition, a change of job can of course bring other advantages, such as less overtime, more flexible working hours or hierarchical advancement. So it is time that we Germans put our fear of changing jobs aside and instead start looking at the “patchwork career” model as an opportunity on many levels.
No increase in salary translates to a "decrease in salary"
It doesn't always have to be higher, faster, further? We agree with you! If you are satisfied with your current job and earnings and would rather enjoy the security of the open-ended employment contract than looking for a better-paying job every two years, that's perfectly fine. But: Even without changing jobs, you should ask for a raise after two years at the latest.
Read Tip: Harvard University exposes the biggest mistake you made in getting in the way of your raise yourself
Because tomorrow's € 2,500 net are worth less than today's € 2,500 net. So if you do not want to accept a "lower salary", you have to request a regular salary increase. Otherwise, strictly speaking, your income will continue to decline year after year. How so? Due to inflation and rising cost of living: Your 2,500 euros net per month e.g. For example, after a year with three percent inflation, purchasing power is only worth EUR 2,427.18. After two years it is only 2,356.49 euros, after three years 2,287.85 euros and after ten years even a meager 1,860.23 euros purchasing power - with actually the same earnings. In order to retain your previous purchasing power, you would instead have to earn EUR 2,575 net after one year, EUR 2,652.25 after two years, EUR 2,731.82 after three years and EUR 3,359.79 after ten years. This calculation is therefore your real wage adjusted for inflation.
Admittedly, the three percent from our sample calculation seem exaggerated given the current inflation rate of 1.6 percent. In January 2015, the euro area even had a deflation rate of 0.6 percent, i.e. your money gained in purchasing power instead of losing it. But these are absolute exceptions. The optimal inflation rate is not, as you might assume, zero percent, but two. For the average consumer, the reasons for this are difficult to understand. To explain these in full would go beyond the scope at this point. Nevertheless, we would like to briefly summarize the reasons for a rate of two and against one of zero percent:
- The inflation rate arises in the area of tension between the goals of consumers and those of central banks.
- Consumers and companies are interested in keeping price increases as low as possible.
- From their point of view, a high inflation rate represents a distortion of the price as a scarcity indicator.
- For banks, on the other hand, a low inflation rate means the risk of hitting the zero interest rate limit or below.
- This severely restricts the central banks' room for maneuver and their interest rate policy.
- The central banks can therefore, to a lesser extent, have a stimulating effect on the economy or prevent deflationary developments.
- According to experts, the desired inflation rate of two percent represents the optimal compromise between these conflicting interests.
The inflation rate is currently rising in Germany and is moving purposefully towards the desired value of two percent. However, renewed peak values such as five percent in 1992 cannot be ruled out in the future. Therefore, if you want to improve financially over the long term, rather than deteriorate, you need to keep an eye on inflation and factor it into your salary negotiations.
Reading tip: "Salary increase: The best tips for your salary negotiation"
If you want to increase your salary, you should change jobs - regularly
Even if you are not necessarily looking for a wage increase, you will have to negotiate a wage increase with the employer at regular intervals due to the inflation rate. This should be at least within the scope of the inflation rate, currently that would be 1.6 percent. In a few years it might be one, three or even five percent. And that's exactly where the problem lies: In the US, the average wage increase in 2014 was three percent. In Germany, too, higher increases are extremely rare. After deducting inflation, all of a sudden only half of that remains - or maybe at some point nothing at all. So let's say you follow the advice of the experts and ask for a raise every two years, you earn one, two or five percent more every time, if you are very good at negotiating. Sounds like a lot? Is not it!
When changing jobs, salary increases of ten to 20 percent compared to the previous employment are not unusual - in other words, a multiple of the “normal” salary increase. If you use it not just once but every two years, it makes a huge financial difference. How big this really is is almost shocking: Calculated over your entire professional life, you earn an average of 50 percent more with regular job changes every two years than with a permanent position with salary increases at the same time intervals.
But aren't frequent job changes a no-go on the résumé?
This range is particularly large in sectors affected by the shortage of skilled workers, where companies try to attract applicants from the competition with high salaries. Although the previous employer also often tries to keep the workforce in the company by means of a salary increase, he usually has to observe strict limits. For example, it may not increase more than five percent. When it comes to recruitment negotiations, this leeway is usually much greater. The applicants often demand very different salaries of several thousand or ten thousand euros difference per year. The HR manager can therefore decide more freely about the salary range and accordingly make a better offer. This makes it easier for the applicant to negotiate ten to 20 percent instead of “just” five or three.
Reading tip: "Starting salary: This is how it works with the salary expectations"
Nevertheless, many employees shy away from such frequent job changes. On the one hand, because constant changes are very exhausting in the long run. On the other hand, because they may just feel comfortable in their current position and there are other important factors for job satisfaction than just the financial aspect. But in the end, many employees are also afraid that frequent job changes in the application process will be a deterrent. This may still be the case in some conservative companies. But experts agree that the future trend will be towards patchwork careers - perhaps even towards comprehensive, project-based work as a freelancer.
Reading tip: "Goodbye permanent employment contract - hello patchwork career"
A progressive-minded HR manager knows that frequent job changes do not necessarily mean that you will cause conflicts or that you are a generally "difficult" person. Instead, they stand for openness, curiosity and self-confidence, after all, you dare to take on a new challenge every two years. They represent an opportunity for a breath of fresh air in the company - and for flexibility in terms of personnel. Ultimately, it is reasonable to assume that you will also be leaving this position in two years' time, which will certainly have advantages for the company.
Reading tip: "Curiosity: Why the" childlike "success trait is so important"
Every change of job also means personal development at the same time
In the end, it is probably just a question of type whether you prefer the regular adventure of changing jobs or the apparent security of an open-ended employment contract at the expense of a lower salary. But much more important than the financial advantage: every change of job brings you further as a personality. Because personality development is only possible through change. And after each mastered job change you will feel stronger, more confident and hopefully happier as well.
Reading tip: "Strengthening self-confidence: Tips & exercises for more self-confidence"
Because change always means the chance for improvement, for example through less overtime, more flexible working hours or a higher position in the hierarchy - as mentioned at the beginning. So maybe it is time for you to take the plunge into the deep end. And if not, at least don't forget to negotiate a regular pay rise to offset inflation.
What type are you Do you like to change jobs often and what advantages do you see in this? Or do you feel more comfortable in the "safe haven" with an open-ended employment contract and routine daily routine? How so? Thank you for your comments!
Photo credit: RomarioIen / Shutterstock
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