Switching Jobs
How are things changing?
Two reports came out last week that are worth exploring side-by-side.
Spencer Stuart, the global executive recruiting firm, released their annual report on executive careers. Traditionally the data that shows the average CMO tenure is only 40 months is interpreted to mean that CMOs have a three years to grow their business or they are fired. But this time the report looked to see where those CMOs go when they leave:
According to the report, 77% of CMOs who left their jobs at one of the top 100 advertisers last year went on to higher-level positions—divisional manager, president or executive vice president, for instance—either within their own organization or at another company, or accepted CMO roles at larger organizations.
So CMOs don’t have three years before they are fired, companies have three years to get output from their CMOs before the executives jump to their next (bigger) job. The Spencer Stuart spokesman summarizes the takeaway: “The CMO used to be the end destination for many people’s careers, the reality is now it’s a waypoint on a longer journey to broader leadership roles.”
It has always been that way. We were just interpreting the data wrong.
How Much to Switch?
The typical job switcher earned an 8.4% raise in August 2022, compared with a 5.6% increase for remaining on the job, according to data from the Federal Reserve Bank of Atlanta. In March 2023, job switchers’ wage growth fell to 7.3%, while those who stayed with employers received a 5.9% increase.
Early in my career I was advised that if you switch from one company to another you should ensure you get at least a 20% pay increase. The logic is that, if you are good, you know what you have where you are. You should be able to use your political capital you build (by doing a good job consistently over time) in order to get promoted. And when you do get promoted, you will know what you are walking into. When you switch companies you are jumping into the unknown. You should be compensated for that.
Another piece of advice I was given was “switch jobs every two years” (approximately). You need a year to get to know a job and have impact based on the stuff you knew before you took it. But if you leave after a year, you have not shown commitment. The second year is the real challenge — did you set yourself up for success in year one? In Year Two you are competing with yourself (literally with year-over-year comparisons). That doesn’t mean you need to quit after 24 months. It does mean that you should think of your career as a series of “chunks” of figuring out new jobs, and then delivering in those new jobs (as they become old jobs). 24-months is roughly the minimum you need to do that.
Combine the 20% pay increase when you switch jobs with the “figure it out and deliver” model, and switching every 2-years is roughly the optimum to maximize long term compensation growth. It doesn’t mean switching companies: Often you can switch “jobs” within a company, and sometimes even within the same role.
As the WSJ article The typical job switcher sticks around in a job longer than two years, and when they do switch they only make an additional 8% (and now 7% as the economy gets tighter). But there is no reason you should be typical.
Keep it simple,
Edward