Internal promotions typically yield 5-10% salary increases while external job changes often provide 10-20% increases—sometimes 30-50% when changing companies during high demand.

Over a career, strategic job changes every 2-4 years can result in $1-2 million higher lifetime earnings than staying at one company.

However, job hopping has costs: loss of unvested equity (401k matches, RSUs), resetting of vacation accrual, learning curves reducing initial productivity, and loss of institutional knowledge.

Calculate total compensation when comparing: salary, bonus structure, equity value, retirement match, health benefits, vacation time, and work-life balance.

A 15% salary increase might not compensate for losing a 6% 401k match and 3 weeks vacation.

Internal promotions offer advantages: known culture, established relationships, accumulated vacation, vested equity, and lower risk.

However, some companies systematically underpay internal candidates—bringing external talent at market rates while giving internal promotions sub-market raises.

Optimal strategy: seek internal promotion opportunities first (lower risk, preserved benefits), but if promotion is 15%+ below external offers, negotiate using outside offers as leverage or make the move.

Every 2-4 years is optimal frequency—too frequent appears unstable, too infrequent leaves money on the table.

Build skills continuously so you always have external options for negotiating leverage.