For competent people, getting fired is awesome as it always means a big pay raise.
At most jobs I carry a letter of resignation with me at all times, ready to be handed over at any moment. This practice really helps take the edge off of many situations, since I don't see any situation as anything I have to put up with, which seriously reduces the angst and depression that I encountered from feelings of futility and hopelessness from "situations beyond my control" before I adopted the practice. Now I know that all situations are under my control as far as my own choice to be involved at all is concerned, and likewise, others are responsible for their own decisions and happiness.
Carrying around such a letter is analogous to always being prepared to walk away from a negotiation. Which you must always be, otherwise it'll seriously undermine your position.
When you are hired, you can negotiate a salary $X based on your skills, the company's needs, the job market, and a whole host of factors.
At each pay review period (or however your firm does it) thereafter you may get a salary increase of Y%. The realities of corporate politics, management, social dynamics, etc. say that the frequency of the review (or if you even get one) is mostly out of your control. Further, the amount of the increase may have little to do with you; maybe there's "no room in the budget for increases this quarter", or maybe your manager is giving you poor evaluations to try and keep you from being promoted out of his department thus reducing his headcount. Finally, there is a force in almost every organization that says that salary should be based on seniority not merit. There may be pay grades, or salary caps, and there is almost always some limit on the size of the raise any person can get without a top exec signing off on it. I could go on. :)
Meanwhile, you (hopefully!) have more knowledge and skills than when you were hired; you certainly have more experience. After a few years, you are almost certainly worth a lot more than when you were hired. (If the job market has improved since you were hired, this goes triple.)
The end result is that, for most people, your salary represents a pretty good snapshot of your "worth" when you are hired, but every quarter thereafter it diverges. Changing jobs periodically lets the good employees "lock in" that extra value. (Meanwhile the poor employees will do their utmost to stay, as they know they may not deserve all of the raises they've received. This is but one of many reasons why organizational performance trends downwards over time.)
You'd think that you could just renogotiate with your current employer. "Hey, I know I was only worth $60k when you hired me, but I'm now an expert on X, Y, and Z, and the job market is really hot right now. I know you've upped my salary to $90k, but you'd have to pay over $140k to replace me. Give me a raise or I'll go next door and get $120k." Seems logical, but human nature being what it is, this never works. Instead, you quit and go to work next door for $120k, while one of their guys quits his $90k job and comes to work at your old employer for $120k. Of course, both of you are now less productive for the next 6 months as you learn new systems and a new codebase. It's silly, but there you are.
Instead, you quit and go to work next door for $120k, while one of their guys quits his $90k job and comes to work at your old employer for $120k.
The key is that in this case, you quit. If you are actually fired for some reason, then you will have a lot of explaining to do which could dramatically reduce your market value. Even if you were fired for some stupid reason, like racial discrimination, that's a lot of explaining you have to do that other candidates do not.
That's a good point. I believe the original comment was being a bit loose with terminology, and not really making a distinction between being fired, being encouraged to quit, being made redundant, etc. The fact that he also mentioned a letter of resignation points that way too.
You're correct that there is a huge difference between being let go with good references as part of a reorg of corporate strategy (or whatever_, and being fired for sexually assaulting the cleaning staff. The former is little impediment to finding a new job, while the latter is. (Well, unless you can successfully threaten your old HR department with a wrongful dismissal suits so that they will lie and cover for you. And oh yes, that happens[1].)
Context does matter, and that's worth pointing out.
[1]: Frequently, too. A short-sighted analysis says that you have two goals when you discover a bad employee: 1) Get them OUT of your organization before they do something that might make you liable and 2) Make sure they don't sue you. A glowing letter of recommendation is cheap, and can help achieve both goals. Often a small bribe - sorry, severance package - can be tossed in as well to sweeten the deal. Of course, that will come around to bite you when you end up hiring some other companies ambulatory menace on the strength of a glowing-but-false letter of recommendation. sigh
I've read that the average pay raise from the company you're already working for is about 10%.
While the average increase in salary when you start a new job is about 20%.
I think the differences are usually even more dramatic near the beginning of most people's careers. Entry level employees tend to be extremely underpaid and undervalued.
With at least one year of experience under your belt, your worth on the job market is significantly higher than someone who's fresh out of college. But the company with which you've been working at since college rarely sees it that way, and tends to undervalue you. If you switch jobs, you are almost guaranteed a significantly higher salary -- even more so with two or three years under your belt.
In my own case, I managed to more than double my salary in about three years of job hopping about once a year at the start of my career. Of course, simple math will tell you you can't keep that sort of thing for long (unless you're one of the few to win the career lottery and make C__ at a successful company). So eventually your salary increases will start to plateau, and you might even price yourself out of the job market entirely -- making your current job (the one willing to pay top market rates) that much more valuable for you to keep. But when you're just starting out, and even in the middle of your career, this won't be much of a concern.
At most jobs I carry a letter of resignation with me at all times, ready to be handed over at any moment. This practice really helps take the edge off of many situations, since I don't see any situation as anything I have to put up with, which seriously reduces the angst and depression that I encountered from feelings of futility and hopelessness from "situations beyond my control" before I adopted the practice. Now I know that all situations are under my control as far as my own choice to be involved at all is concerned, and likewise, others are responsible for their own decisions and happiness.