The Wrong First Job Can Hurt Your Whole Career

According to new data from the Bureau of Labor Statistics, more Americans are quitting their jobs. That’s good news. It means people are confident they will find work elsewhere, or already have, which translates to more stability and certainty for workers. At the same time, the job market is still tighter than it used to be; even before the recession, turnover was dropping. And that raises the stakes, particularly for people starting their careers.

Settling into the right career can be like dating. Most people need to try a few different jobs or careers before finding one that fits, and with more experience and knowledge, the odds of finding a lasting and satisfying relationship increase. Job hopping fosters skill development and increases the size of your professional network; doing so frequently and early in your career is associated with higher wages.

But the process of finding the right one can be fraught with disappointment. A recent paper from the National Bureau of Economic Research argues that the high youth unemployment rate can be explained by the fact that young people leave jobs more frequently than older people because they’re less likely to be a good fit to begin with—not, as is commonly assumed, because they have fewer skills and are considered more expendable.

Landing the next job isn’t as easy or fluid as it once was. The labor market has become much tighter, which makes it harder to find a new job if you don’t like your current one. According to the U.S. Census Bureau (PDF), job switching fell between 47 percent and 53 percent from 1998 to 2010, the continuation of a decades-long trend. Thirty years ago, 24 percent of men had been in their jobs less than a year, according to Craig Copeland at the Employee Benefit Research Institute (PDF); in 2012 only 19.6 percent had.

As a tighter labor market has made it harder to find the right career through trial and error, the costs of getting it wrong have increased. Another recent NBER paper estimates that pay can vary significantly depending on what company you work for, even within the same industry. Companies that are better at integrating technology and innovation tend to have more productive workers and pay more. The authors argue this has lasting consequences: Starting out at the wrong company can not only saddle you with a lower starting salary, it can also hinder your skill development, which in turn makes it harder to leave and get a job at a higher-paying organization.

All this makes entering today’s labor force something of a high-stakes gamble. The company you end up in first may have longer-term consequences on your career path—and it’s harder to change industries or occupations later. No pressure, young graduates.

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