So I've heard many times that job hopping can lead to higher salaries as much as a 30% gain. How does this work even if both people have the same amount of experience? Is a job hopper more valued by the market? why?
Whats the economics behind job hopping?
byu/Om_Sapkoat inAskEconomics
Posted by Om_Sapkoat
1 Comment
Job hopping is an act of price discovery, undoing a major information asymmetry in labour markets. Companies know the marginal price of an employee because they have HR teams constantly on the lookout. Employees do not know their own marginal price because they are not actively looking, and even if they were, the wages of similar employees is not often disclosed. This means employees are willing to supply their labour at a lower price point than employers are actually willing to pay for it.
It’s possible to find out, the most obvious way being to interview for another job. At that point you discover your price and can choose to accept the higher price point.