It is sad to recognize that employees are earning less money on average every year. And one of the causes for this may be loyalty. If an employee stays in the same company for more than 2 years on average, this means that he or she will be earning about 50% (or even more) less over his or her whole life that if he or she had changed jobs.

Yes, nowadays, companies “punish” those loyal employees that stay. The average raise of an employee in 2014 was around 3% and taking into account the inflation rate, the raise meant really less than 1%.

On the other hand, those employees who decide to leave and go to another company can receive a salary 10% to 20% higher (in some cases even more). So, changing jobs is rewarding. Isn’t this nonsense?

Well, this “tradition” comes from the recession period. During those years, companies froze their employees’ salaries and decreased the salaries of new employees in accordance with the market trends. This makes total sense in terms of an economic crisis, but these measures should last just for a certain period of time. Once the crisis was overcome, companies should have gone back to previous trends in terms of annual raises for their employees. To the contrary, nowadays, the recession period trends have become the new norm.

When you start working at a company you get a base salary and, annually, you may be getting a percentage of that salary as a raise, which is usually limited to a certain percentage, as managers cannot raise the salaries as much as they want, there are usually certain limits they must stick to.

When you change to another job, you start new, so this means that you can negotiate a higher base salary than the one on your previous job. This is the best moment to get a considerable raise, as companies don’t mind paying more if they can hire top talent.

And it also happens with promotion. Companies have certain amount of titles, and not everyone can get promoted. It happens too often that employees that have been working hard in a company for a certain position finally get it when they change jobs.

But of course, people are scared about changing jobs every just a couple years, as this might have a negative effect on their resumes to the eyes of a recruiter (and in some cases it does). But sometimes it may be worth to take this risk. Sometimes candidates just feel that they really need that change to continue developing as professionals the way their skills deserve it. And, for the companies, it is always better to pay 20% more to a new hire if that means that the efficiency of that certain position it is going to be increased by 10%. Sometimes paying more it is really worth it, because that may be how you get the best employees.

So, both employees and companies have to choose what to do: employees have to decide whether to be loyal and earn less or move on and increase their salaries more considerably and companies have to decide whether to reward their top talent so they stay or keep a more conservative politics in terms of employee compensation and just let them go.