Not switching jobs has cost younger workers on their pay packet

 
Hayley Kirton
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Pay growth is almost three times higher for younger people who up and go (Source: Getty)

Staying put in the same job for too long has cost younger workers on their potential pay packet, a report out today has found.

The study by the Resolution Foundation discovered that, had younger workers continued to switch jobs at the pace witnessed in the early 2000s, they would now be earning 30p more per hour on average and their pay squeeze, which refers to a person's inflation-adjusted income, would have been slashed by around a third, from 11 per cent to eight per cent.

The research also found that the switching premium, which refers to the additional boost in pay that workers can expect when they change jobs, is much higher for those aged between 18 and 29 than it is for older age groups. Pay growth for those in the younger age bracket who switch jobs was found to be 2.7 times higher than those who stayed put.

In light of its findings, the think tank is warning that, should this trend continue, it could have long-term consequences for the future earnings of the younger generation.

Read more: We've given 1.3m a pay rise: Full employment is next

"Frequent job moves are the main route to the rapid pay increases young people should experience as they begin their working lives," said Laura Gardiner, senior policy analyst at the Resolution Foundation. "So it is a real concern that job switching slowed down for all groups, and particularly for young people, even before the recession hit.

"Unpicking the reasons why young people are staying put in their jobs for longer is crucial to understanding whether job switching can return to its previous level, or whether we are seeing a 'new normal' of fewer job moves and subsequent slower pay growth for generations to come."

Read more: Graduates with richer parents will earn more, research reveals

In February, the Resolution Foundation published a report which found that many younger workers now had little chance of getting a foot onto the property ladder.

The start of this month saw the introduction of the National living wage, which entitled employees over 25 to a wage of at least £7.20 per hour.

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