Career Path

Switching every three years ends 1.75× higher — but earns only 27% more

Two people start on 100,000. One stays and takes 3% annual raises; the other switches every three years for a 15% bump on top. After twelve years the switcher earns 249,366 against 142,576 — a ratio of 1.75. Yet cumulative earnings differ by only 26.8%, because almost all of the gap arrives in the final years.

How it works

• Projects a salary path from a starting figure, an annual raise and a switching cadence.
• Reports both the final salary and the cumulative earnings, which tell different stories.
• Shows what annual raise staying would need to match switching.

staying:    final = start × (1 + raise)^years
switching:  final = start × ((1 + raise)^cadence × (1 + jump))^(years ÷ cadence)

cumulative earnings = sum of each year's salary, not the final figure

the two diverge because compounding is back-loaded

Worked example

100,000 starting salary over twelve years, 3% annual raises, switching every three years for 15%.

1. staying → final salary 142,576
2. switching → final salary 249,366, a ratio of 1.75
3. cumulative earned staying: 1,419,203
4. cumulative earned switching: 1,798,955
5. difference in what you actually banked: 379,753, or 26.8%

The headline ratio of 1.75 describes the last payslip, not the decade. What landed in the account differs by 26.8% — still substantial, but less than half the gap the final-salary comparison suggests. To match the switcher's endpoint by staying you would need 7.91% raises every year.

Reading the result

• The premium per move is the term that matters most, and it is the least reliable. At +5% a move the switcher ends at 1.22× the stayer; at +10% it is 1.46×; at +20% it is 2.07×. A move that produces a token increase is not a career strategy, it is a change of desk.
• None of the costs of moving are in this arithmetic. Ramp-up time, lost tenure-based benefits, unvested equity, notice periods and the real risk of a role that turns out badly all sit outside the model, and any of them can erase a single 15% step.
• Switching also resets things the model does not track. Promotion pipelines, institutional knowledge and the trust that gets you interesting work all restart, and for some paths — particularly where deep domain knowledge compounds — staying pays in ways salary does not capture.
• The direction of the arithmetic is robust even if the numbers are not yours. Wherever internal raises materially lag external offers, external moves compound faster; the honest question is whether the gap in your field is 15% or 5%, because that single figure decides the whole comparison.

Common questions

Is job-hopping always better financially?

Only when the move premium beats the internal raise by enough to matter. At +15% every three years the endpoint is 1.75× staying; at +5% it is 1.22×, which is easily wiped out by ramp-up time and a single bad hire on your side of the table.

Why is the cumulative difference so much smaller than the salary difference?

Because compounding is back-loaded. Early years are nearly identical, and the switcher's advantage accumulates mostly in the final third. The 1.75 ratio describes one month's pay; 26.8% describes twelve years of it.