Employees often believe job hopping is one of the quickest paths to higher wages and career advancement — despite recent trends showing lower gains for job switchers.

But among the strategies workers should weigh to improve their outcomes, picking companies that offer a variety of roles may be a way to “turbo-charge” career growth and satisfaction, said Inês Black, an assistant professor of strategy at Duke University’s Fuqua School of Business.

In a talk on Fuqua’s LinkedIn page, Black explained how workers who start at firms that offer more job titles tend to have higher wages in 10 years, regardless of whether they remain at the same firm or have moved on by then.

Specifically, her study of Portuguese labor market data from 1986 and 2021 found that a higher number of occupation switches is associated with an increase of 2% to 10% in wage (depending on the different industries) at the end of the 10 years.

Three factors affecting career outcomes

Black highlighted three well-known factors affecting employee performance and career: skilled workers joining productive firms, the right choice of the first employer, and learning on the job, which fosters skill development and better roles.

When talented workers join the most productive firms, the match becomes “super-additive” — it increases productivity by more than the sum of the parts—, which leads to higher wages, Black said.

Equally crucial, starting your career with the right employer seems to have permanent effects on long-term outcomes, over and above the effect of skills and experience, she added.

Black also noted that workers (and companies) often learn on the job about their actual skills and the roles that would best fit them, partly explaining job mobility as the pursuit of better job matches.

How occupational variety increases long-term pay and satisfaction

Putting these well-established factors together, Black and her colleague, Professor Ana Figueiredo of Vreij Universiteit Amsterdam, wondered whether workers may not even need to job-hop to improve their career outcomes, as long as their companies have enough internal occupational variety, offering opportunities for employees to switch across different job titles and find the best match for their skills.

Professors Black and Figueiredo explored this question using Portuguese labor market data from 1986 and 2021. Matched employer-employee datasets, also collected in the U.S. and other countries, track workers’ journey across employers, detailing their wages, job history, including specific tasks, education and demographics, Black said. 

“Previous research often linked moving to a new firm with moving to a new task, which isn’t always true,” Black said. “Likewise, if you stay within your firm doesn’t mean you'll always be working on the same type of tasks.” 

Focusing on full-time employees, Black and Figueiredo analyzed hourly pay, job titles, and the variety of occupations within companies. Her goal was to determine if occupational variety correlates with internal job changes within the same hierarchical level (but to different job titles), and with shifts in career outcomes. 

Black illustrated this with two design firms: one offering roles like designers, computer jobs, business operations, operation managers and administrative assistants — all at the same managerial level — while another design firm might include engineers, sales representatives and managers, and marketing and communication roles. 

“One company seems to have more tasks than the other to produce this — arguably — very similar [design] service,” Black said.

Black and Figueiredo studied workers with at least a 10-year career length, analyzing their trajectories across firms or across occupations within the same firm. 

“So we can compare whether wage prospects increase if they are changing within the same firm to different tasks or if they're switching to a new employer,” she said.

The research found:

• workers starting their career at firms with more occupational variety switch occupations internally more often within the first 10 years;
• as a result, workers starting their career at firms that offer more job titles tend to have higher wages in 10 years;
• independently of firm size, the more occupations a firm offers, the more likely it is to retain their employees. 

“So there seems to be some learning happening in the first few years of a worker’s career,” Black said. “If you're exposed to a wider variety of occupations or job titles, you can eventually perform better because you will land more quickly in a job title where you are most productive.”

On the firm side, occupational variety is positively correlated with higher worker retention, Black added.

“For every one more occupation that I offer to my workers, I'm 10% more likely to retain them 10 years from now,” she said.

These findings hold regardless of the size of the firm, Black said, showing that workers might find a path to improve their careers even outside big firms.

Don't overlook small firms with job variety

She concluded that workers tend to assume that larger firms are better to start your career, and that you need to switch firms very frequently to land on the right match or the right job. 

“But my takeaways are: first, don't discount relatively smaller firms that offer exposure to different types of tasks,” Black said. 

“And second, it's not always the case that you have to switch employers that often, in order to find the right role. If you can do that within the firm, which eliminates a lot of friction, and can turbo-charge your search towards a better fit.”