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By July 6, 2014 0 Comments

Memo to College Grads: Quitting Your Job Is a Great Career Move

NEW YORK (TheStreet) — Given the state of our economy and the constant plea for more jobs, this may seem like a silly headline. But what’s silly is the idea that anyone would consider leaving potentially 50% of their lifetime’s earnings on the table just for the sake of showing job loyalty.
Millennials are entering the workforce with the expectation that if they work hard, good results will come. They have dreams of making their mark and seizing that corner office by climb the corporate ladder.
But these days, companies are only as loyal to an employee as they have to be. Shareholders demand higher profits and corporate leaders have no choice but to deliver — or else.
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Getting to the top of the ladder in such an environment is much quicker by jumping ship to a new company. Loyalty is what your grandfather understood. Not today. This is what Apple , Google , Intel and Adobe realized when they signed a pact to not poach each others talent. All four were named in an employee lawsuit, claiming they conspired to keep salaries down by not recruiting each others workers.
According to court documents, deceased Apple co-founder Steve Jobs once told Google co-founder Sergey Brin, “If you hire a single one of these people that means war.” This was according to Brin’s description of the conversation.
The case was settled in May for $ 324 million. Neither Apple or Google could be reached for comment.
Still, this is an example of the losing battle employees have against large corporations, especially in an age where unions are losing negotiating power for the workers they represent. However it also affirms the leverage talented workers sometimes forget they have. Companies are willing to “go to war” to preserve their talent. 
There will be millions of college graduates entering the workforce this summer. And many millions more entering their second year on the job. But according to a recent Forbes article by Cameron Keng, employees who stay at their jobs longer than two years are paid 50% less than those that are newly hired.
So why not quit after your second year and seek higher pay elsewhere?
Statistics show that you are more likely to earn a higher salary and a better position or title than if you were to stay and accept your raise. Talented people who are unafraid of new challenges are rewarded much more quickly than those who are comfortable in their current roles.
These companies know that moving over and up is a faster ride to the top than if an employee were to stay in their current job, waiting for their shot. Unfortunately, very few first or second-year workers know how to master the art of quitting and miss out on seizing opportunities to maximize their earning potential.
This is an area where colleges have failed. While they do an exceptional job of teaching students the skills needed to perform at a high level, they are graduating workers who are unprepared to negotiate pay raises and seize promotions from the companies they love. “Loyalty” should not equal poverty. Nor should it be taken for granted.
Once in a job, some employees choose to stay for the wrong reasons — like the appeal of the standard 3% raise, which the average current employees can expect. This rate has become the norm. Companies have cited global economic headwinds and various macro reasons for why they can’t go higher than 3%. But the norm doesn’t follow current economic trends.
Even though we’re no longer in a recession, the 3% raise is widely accepted. Why? Because we’ve always been taught to be grateful for what we’ve been given.
At the same time, you must also factor how much of an impact this raise will have on your quality of life. The extra cash is only as good as how much you can do with it. Inflation, which is the rising rate of prices for goods and services, should matter in every discussion that involves a raise. 
Inflation is at 2.1%, according to Bureau of Labor Statistics. This means we’re spending more than $ 1.02 to buy something that costs $ 1. And when you match this up with the 3% raise, it means the raise was actually 0.9%.
How long can you justify accepting a less than a 1% raise from your current job when, according to the Wall Street Journal, a person who quits and moves on to a new job receives on average a 10% to 20% raise?
Starbucks doesn’t want to lose good people. Never short on innovation, Starbucks didn’t take the Apple/Google route and tell Dunkin’ Brands to “leave my people alone or else.” With its “College Achievement Plan,” Starbucks has partnered with Arizona State University to subsidize and, in some cases, pay the full costs of college tuition for its employees.
Requests for clarity on the terms of the agreement were not immediately returned by Starbucks’ representatives.
Regardless of how this tuition-payment idea was brewed, it’s still a great deal. With constant public/political pleas for raising the federal minimum wage, Starbucks is getting out in front of the issue and helping its employees obtain justification for higher salaries.
Call it a clever way to retain good workers. In addition to a college education, these workers are also getting a worthwhile lesson in the important role they play in corporate battles for the skills they provide.
Perhaps all it takes is for workers to threaten to quit to lessen future debates about income inequality.
At the time of publication, the author was long AAPL.
Follow @Richard_WSPB
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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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