Why it pays to be a company lifer — if not in salary

This week the sportswear company Nike released another set of poor quarterly results. It had already taken preventative action, however, by announcing a new chief executive, Elliott Hill, a man who it hopes will reinvigorate this once great brand.
When his appointment was made public last month his CV went viral on LinkedIn, a place where dullards seek inspiration and the desperate search for validation. Rather sweetly, he lists every job and position he has held. And they have all been at Nike, starting in 1988 as an intern. Each of his next 13 jobs were a move up in the same company: a third of a century with Nike.
People gushed at how this was “an incredible, inspiring journey” and “it’s easy to forget the value of long-term perseverance and grit”. Hill, someone wrote, was proof that you need to, “find your place, stay committed and fight through the challenges … success will follow”.
Truly, there is no one more insufferable than the “global thought leader” on LinkedIn.
The fuss was in part, though, merited. Someone starting out in today’s job market is far less likely to end up as a “company lifer” in the way that was possible in my grandparents’ era. There are a number of reasons for that, not least that many of today’s biggest companies are technology behemoths that have been in existence for less than a generation: only two of the so-called Magnificent Seven stocks, Apple and Microsoft, had started when Hill was an intern. The average lifespan of a US S&P 500 company used to be 67 years. Now it is 15.
Plus, most life coaches or career advisers advise that staying put leads to a sense of stasis. Rebecca Parker, a career and change coach, said: “In many private sector industries, there is an unspoken rule that if you’re in the same role for more than eighteen months or two years, and in the same company for more than three or four years, you go stale.”
If you want to learn and to grow you need to move around to discover how other companies do things differently. There is a truth to this: I know that many people discovered what a terrible boss they had only after they moved to a company where they were not made to feel perpetually miserable.
Crucially, you also need to move if you want a pay rise. The Office for National Statistics occasionally looks at the earnings of job stayers (defined as those who have stayed at the same company for at least two years) and job changers (who move around one year to the next). The most recent year we have data for is the 12 months to April 2021. Those who moved enjoyed not just higher hourly wages, but benefited from an annual pay increase of 9.5 per cent. Those who stayed got a rise of 2.9 per cent. Covid did not skew the data: in any year over the past decade those who moved enjoyed higher pay increases than those who did not.
Most people instinctively understand the status quo penalty. Even if they are happy in their job, a failure to move might suggest that they lack the requisite ruthlessness to reach the top. William Beardmore-Gray, chair of Knight Frank, has been at the property group all his career and in a recent interview explained how he used his lifer status to break the ice with new employees. “My normal first line is, ‘You must think I’m a complete loser. I’ve been here for 33 years and I couldn’t find another job.’ ”
Staying with one company is less rare than you might think. A few months ago Japan Airlines named Mitsuko Tottori as its new boss. She joined the flag carrier as a flight attendant in 1985. Ron Vachris, new boss at Costco, started out as a forklift truck driver at Price Club, a warehouse retailer bought by the company he now runs. Oliver Blume is chief executive of Porsche as well as its parent company Volkswagen, one of a number of German car company bosses who joined as graduate trainees and never left.
If you have started on the shop floor it should, in theory, help you to deal with more junior staff. Pano Christou, the chief executive of Pret, after a brief stint as a teenage burger flipper at McDonald’s, started his working life as an assistant manager at the sandwich chain aged 22. He is still there 24 years on. “Memories of making coffee, prepping sandwiches and serving customers stay with you and gives you two advantages: a sense of authenticity and credibility when talking to teams; and a ready ability to think of people as people, not numbers,” he told me.
For companies there is another advantage, apart from saving on recruitment costs, to holding on to employees for a long time: institutional memory.
Fiona Gordon, the chief executive of advertising at the global ad agency Ogilvy, started in 1992 as a graduate and has worked her way up to run various offices for the company in London, New York, Singapore and Hong Kong. First of all, she points out that it is possible to stay fresh while staying put, simply by moving around departments or territories. Her second point is that if you have been there for decades, rather than years, “you know the soul of your organisation and its fundamental defining skills”.
Most companies obsess about fostering a company culture but are remarkably poor at knowing how to do that. A mission statement, internal training or annual awaydays will only go so far. What you really need is a cadre of employees who have survived the bad times as well as ridden the good and can call on institutional memory to work out where to go next.