« Back to More POV Stories

Financial Tips for Millennial Job Hoppers

Millennials who frequently switch jobs can reap the benefits if they make financially sound decisions throughout each transition.

Millennials, you’re on a roll! You are expected to make up 75 percent of the workforce by 2025[1], and your demographic already has carved out a reputation as one that has no qualms about frequently changing jobs. According to Gallup, 21 percent of millennials have changed jobs within the last 12 months – three times more than any other age group - and you are more likely to report being open to a different job opportunity than other generations[2]

As most people – not just millennials – who have changed jobs can likely attest, there can be some real benefits to this career strategy. 

First, and most obvious, you can increase your compensation. It’s not unreasonable to expect that joining a new company can result in a significant bump in compensation and benefits.

Second, there’s value in changing jobs to acquire new skills. Because you are still a relatively new member of the workforce, taking on a variety of roles at different companies will result in new skills and experiences that can be beneficial later in your career 

Lastly, millennials are known for being very socially conscious and taking a lot of pride in staying true to their values. By working for different organizations, you have the opportunity to test the waters to see what types of companies and industries have values that align with your own. 

“That being said, there can be some financial risk that comes with frequent job hopping,” said Rich Ramassini, CFP, senior vice president and director of sales and strategy performance at PNC Investments. “If you find yourself craving new opportunities every few years, it’s important to be aware of the risks and strategies associated with this type of professional trajectory so you can stay focused on your long-term career goals.”

Young professionals
If you are inclined to change jobs frequently, make sure you’re transitioning to new opportunities for the right reasons.

1.  Understand why you are making each move.

As mentioned above, the rationale to change jobs generally falls into at least one of three categories: money, values and/or experience. 

It’s important for a job hopper to justify that the decision to switch jobs isn’t simply to escape a current job or industry. Individuals who are taking advantage of an opportunity are generally more satisfied with the move than those who are “running away” from a situation. 

“Make sure you weigh the pros and cons of leaving a known environment for an unknown one,” Ramassini added. 

2.  Know the cost of changing jobs.

A lot of people – not just millennials – only look at top-line salary and compensation numbers. However, that thinking should be adjusted. It’s not about what you make, but about what you keep. 

Your new salary might be higher than what you’re currently making, but factor in all the associated changes. For instance, will you be driving more, and therefore have to fill up your gas tank more frequently? Are you working in a different city or town that has higher taxes? There are many seemingly hidden things that could eat away at your take-home pay so you may end up keeping less money in the long run.

3.  Determine the impact on your retirement planning.

Retirement benefits have what is called a vesting schedule. In layman’s terms, sometimes there are funds or stock options that are locked away until you’re with the company for a certain period of time. 

If you switch jobs before the vesting period has expired, you will lose those benefits. 

“That’s not to say that you should necessarily decline a new opportunity, but factor in your current company’s vesting schedule and your retirement readiness,” advised Ramassini. 

Also, another risk is if you enter a new job knowing it is temporary, you might not invest for retirement or engage in employer-sponsored benefits such as tuition reimbursement, parental leave and employee stock purchases.

4.  Know what to do with your old employer’s retirement plan. 

You will likely have four options. There are very few circumstances that warrant cashing out a plan with a job move; otherwise, you’re subjecting yourself to significant short- and long-term penalties. Instead, consider rolling it over if your new employer offers a retirement plan. 

Frequently changing jobs is not inherently bad for your career or the workforce as a whole. 

“However, when new job opportunities come along, it’s important to be thoughtful about your rationale for accepting the offer, as well as the short- and long-term impact on your career, finances and home life,” concluded Ramassini.


Learn how PNC can help you achieve your financial goals »

Rich Ramassini
Rich Ramassini is a Certified Financial Planner and senior vice president at PNC Investments

Sixty percent of millennials report being open to a new job opportunity, compared to 45 percent of non-millennials who say the same[2]


PNC Point of View
Real People. Real Perspective. Real Insights.
Read more POV Stories »