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Why is it that a change in salary is less than 30 percent in job-hopping, equal to a "pay cut"?

Recruitment in the Labour market is a classic "information asymmetry" deal.
I remember when I was first year hiring, studied a large number of recruitment of words, to determine whether candidates have the corresponding ability, but in the second year, I just see degree, working background is the tough.
I found that when the other party was fully prepared, it was the age of applying skills on the Internet, and the ability to judge a person by a few minutes of conversation was not as good as looking at the constellations.
According to "information economics", your education and working hours are "public information" and your professional and personal qualities are "private information". In the case of information asymmetry, the best way for employers is to trust only "public information" and discount "private information".

In second-hand car trading, "appearance, range, use fixed number of year" belongs to the "public information" of high reliability, represents the car "fair value", "maintenance" belongs to only sell cars people know "private information", no matter who sell cars blow it up, car buyers are always be suspicious.
To protect themselves, buyers often assume that the other person is lying, offering a price for a bad car. In this way, you can buy a good car and make a profit. If you buy a bad car, you will not suffer a loss, which is a discount on "private information".

Similarly, in the recruitment, big companies high-profile, "work experience" belongs to the "public information" of value appreciation, generally from large companies to small industrial firms, will be on this a 20% increased wages.
On the contrary, the "work experience" of an unknown small company is "private information", jumping to a big company and offering discounts to employers.

Why is a pay rise less than 30 per cent a salary cut? It also has to do with information asymmetry.
Economists have built a model of "shoddy Labour". Here's how it works: a company with the most capable people is the most likely to jump ship, the least able to be fired, but job-hopping and dismissal are "private information" that can't be resolved.

As a result, any career change on the resume, especially in a company for less than two years, is suspected of being a "defective Labour force" in the "guilty assumptions" of HR.

In other words, your job change will cause you to lose value the next time you move, so the only way to do this is to raise your salary in advance. Add in the risk of job-hopping, with less than 30% of the increase in job-hopping, both of which should be cautious.
The combination of these two factors makes it often "nominal and real" to jump from a small company to a well-known company.

So is it worth it? We still need to look for answers from "information economics".
Let's start with the "second-hand car trade" : the mentality of the car buyer, regardless of the bad car, will be the bad car bid. In this way, the man who took the car was quitting: why, I love my car so much, you give me a 20% discount? Don't sell!

This way, can on the second-hand market transaction, the only bad car, time grows, car buyers to know here is not good, but the bad car is hierarchical, car buyers can only put all the bad car as a "more bad car" offer.

The adverse selection of this "bad currency to drive out good money" continues, leading to the collapse of the secondary market. As a result, information economists believe that, as long as there is "information asymmetry", the transaction will not be able to proceed.
In real life, second-hand car market is alive and well, this is because there are a large number of third party appraisal institution at work, they accumulated professional experience, to provide the actual usage of vehicle and the real value, "private information" into "public information", that is to break the "asymmetric information".

In the hiring process, you want to prove your value, and your thoughts are the same, so be sure to turn the "private information" of your personal abilities into "public information" that has credibility.

How do you do that? Let me start by analyzing the most "value-preserved" indicator of a job -- a degree.

The main function of education is to identify talents?

I don't know if you have ever thought that, since everyone knows that education is not equal to ability, why is it that in recruitment (especially in school recruitment), the degree of a famous university is the decisive factor?
An economist named Spencer, who studied the labor market, put forward a theory-educational signal transmission, and thus won the 2001 Nobel Prize in economics.
According to spencer, the main function of education in the university is not to cultivate talents, but to identify talents and to transfer the price to the market.
China has a story, "He Shi Bi" education as "He Shi", the jade stone break outside, see if it is jade, so, polish, finally affix its own brand - "production" XX university.
This is in China, the big company's campus recruitment, then take a fancy to you the cause of the 985, 211, not only because they are high quality of education, but also because in these schools recruit students, already help you to identify talent.

In China, the key is the Gaokao. After all these years, people have been making fun of the shortcomings of the college entrance examination, but it is still irreplaceable.Even if it's not science, it's better than you can judge a person by the interview.
In fact, three years of high school is basically a long process of talent identification -- no perseverance, being eliminated.
Not smart enough to be eliminated.

Think of why we have imprisoned ourselves in the world of books at the time when we should have been unbridled.
Why do people go to college and play, but you have to work hard to get a better school?
Because you want to "diligence, high efficiency, high intelligence quotient", and so on personal ability of "private information", into a anyone can read the "public information" - 985, 211 degrees, to open another more important "public information" - the famous enterprises work experience.

Turning "private information" into "public information" means that "value goes up", anything of value, and the need to get it all comes at a price.

The college entrance examination, you have spent three years;
Second-hand car transactions, to be paid to third-party evaluation agencies;
Small companies move to big companies at the expense of wages.

But because your work experience becomes more valuable and "public information", and you still have a chance to get your paycheck back to normal, it's still a rational choice.

Take advantage of the influential communication opportunities in the industry and enter the circles of people in the industry to make their own opinions.
Use the online professional BBS, influential platform to publish your own articles.
Use influential industry platforms to help others solve problems.
Participate in the industry's impact assessment...

Its core is to transform "own ability" into "public information" of high visibility.
Political theory: who monopolizes the right to interpret the information, who has the power;
Economic theory: you can make information credible, you control an invisible wealth.
If information is wealth, there are two ways to get it:
One is to make use of information asymmetry to make profit, like using various interview skills, to gain the trust of the interviewer;
One is to "socialize" the ability to use information to reduce transaction costs.
Which one do you prefer?


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