The Hidden Costs of Staying Too Long in One Job

News

1. LTIMindtree Signs $580 million Deal, its Largest Ever

2. OpenAI Adds AMD as Chip Partner, ChatGPT Evolves Into an App Hub

3. AI Steered Planning and Targeting in Operation Sindoor, Army Says

4. Google Unveils CodeMender, an AI that Auto-Fixes Software Flaws

5. Perplexity CEO Says AI Browser Comet Can Replace New Hires

6. Trade Liberalization, AI Can Power India’s Next Manufacturing Upswing, World Bank Economist Says

There was a time when corporate loyalty was a badge of honor. And switching jobs sounded like a bad idea to present on one’s resume. Back then, employees who stayed with one company for years were rewarded with promotions, job security, and steady growth. But today, the equation seems to have flipped.

CA Sourabh Singh captured this sentiment in his LinkedIn post:

“Those who remain loyal often see their efforts taken for granted, their increments smaller, and their career growth slower. On the other hand, professionals who switch jobs every year are seen as ambitious, adaptable, and in demand, often rewarded with significant salary hikes and faster titles.”

This struck a chord with many professionals. One wrote, “Nowadays, prioritizing your career growth pays off more than staying devoted to one organization.” Another added, “I’m sure there still are companies that deliver on their promises for long-tenured employees. Always be loyal. But in my opinion, leave the ‘family’ mindset at home, and always demand your worth. There are companies willing to pay for your experience. While the idea [of frequently switching jobs] sounds awesome, it may not be practical in the long run.”

So, is there data to prove this “loyalty penalty”? Anupama Bhimrajka, VP, Marketing at foundit, noted that employees who stayed with one company for more than five years saw annual increments of 4–6%, translating to 21–32% cumulative growth over five years. Even high performers often lag behind market benchmarks.

In contrast, those who switch jobs every 2–3 years can command 15–35% increment per move, with hikes in sectors like tech, AI, and digital roles reaching 25–40%. Over a decade, this adds up to 100–200% more earnings compared to 50–80% for long-tenured employees.

A software engineer starting at ₹8 lakh and staying with the same employer for a decade might see their salary rise to ₹15 lakh. In contrast, a peer who switches jobs every two to three years could be earning ₹25–30 lakh in the same duration, which would amount to a lifetime gap exceeding ₹1 crore.

However, Bhimrajka noted that the switching advantage isn’t universal. In sectors like EV infrastructure, consumer durables, and fintech, even long-term employees enjoy 10–11% annual increments, while traditional fields like manufacturing and government jobs still trade rapid growth for predictability.

Interestingly, even in IT, where the job-hopping culture is the strongest, annual increments have moderated to 9–9.6%. But specialized skills, such as AI, data science, cybersecurity, still fetch 20–30% jumps when switching.

The trade-off is clear: staying ensures job security and institutional knowledge, but switching fuels faster earnings and skill diversification.

Employe Type	Annual Growth Rate	5-Year Growth	10-Year Growth	Key Advantage
5+ Year Stayers	4-6%	21-32%	50-80%	Job security, deep expertise
2-3 Year Switchers	15-35% per move	40-100%	100-200%	Rapid salary growth, skill diversity

Source: foundit

Neeti Sharma, CEO of TeamLease Digital, offered a cautionary view, “For the last 2–3 years, salary increments across most sectors have been in the single or lower double digit range. For existing employees, the raise has been in the range of 5–10%, whereas new hires are given slightly higher increments at 12–18%. However, if one switches jobs every few years only for salary growth, without making investments in skills and experience, over a period of time, just switching companies will not guarantee a better salary hike.”

The Promotion Story

Salary is only one part of the story. What about promotions? Bhimrajka highlighted a shifting trend: internal promotions reduce attrition by 62%, and employees promoted internally are 25% more likely to stay over three years.

External hires often enjoy a salary premium of 18–20% and may land senior roles faster, but they are 40–60% more likely to leave within three years.

Indian corporations are also rethinking leadership. Today, 70–80% of senior roles are filled internally, up from 40–50% five years ago, signaling a strategic focus on loyalty and cultural continuity.

On promotions, Sharma added, “Employees who have been with an organization for a long time tend to progress steadily as their organizational understanding, institutional knowledge, and cultural fit make them strong candidates for internal promotions. External hires may join at a premium but face higher risks of early attrition.”

As for whether companies still favor new hires over loyal employees, Sharma noted that while 2020–22 saw higher pay premiums for lateral talent, the trend is narrowing. “Now most companies are investing in internal career progression wherever possible.”

So, is Loyalty Punished?

The answer isn’t black and white. For many, loyalty still provides stability, credibility, and structured growth. For others, especially in high-growth, high-demand sectors, strategic mobility is the only way to maximize earnings and stay relevant.

Perhaps the real lesson, as Singh framed it, is this: be loyal to your career, not just your company.