Want to earn more money? Switch your job more often to boost your pay, experts say
A think tank says frequent job moves could help young people increase their pay packets more quickly
Young workers are earning less because they don’t switch jobs enough, experts are warning.
Despite record growth in employment, the number of times employees move roles has fallen over the past decade, the Resolution Foundation think tank says.
Hourly pay for 22 to 29-year-olds only recovered last year to its 2000 level, according to its report.
Young workers’ pay would be 3% higher if job mobility had not slowed, it adds.
The Foundation’s senior policy analyst Laura Gardiner said: “Frequent job moves are the main route to the rapid pay increases young people should experience as they begin their working lives, so it is a real concern that job switching slowed down for all groups, and particularly for young people, even before the recession hit.
“Unpicking the reasons why young people are staying put in their jobs for longer is crucial to understanding whether job switching can return to its previous level, or whether we are seeing a ‘new normal’ of fewer job moves and subsequent slower pay growth for generations to come.”
Less frequent job moves among young people deepened their pay squeeze by a third during the downturn, the report says.
It could permanently slash their earnings potential in the labour market, experts fear.
Job mobility – the frequency at which people move from one job to another – is a strong predictor of faster earnings growth.
And the “switching premium” – the pay boost from changing jobs compared to staying put – is particularly strong for young people.
Between 2007 and 2014, pay growth among 18-29-year-olds who switched jobs was 2.7 times higher than those who stayed in their existing positions.
Ms Gardiner urged young workers – dubbed the “Millennial generation” – to move to earn more.
She added: “Unless we want to see a long term scarring effect on the wages of future generations, Millennials must regain confidence and increase the frequency with which they move jobs, and firms must be more willing to take them on.”