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I was hired by X company for two years and later transferred to Y company payroll.

I have an offer letter from Y company letter but both company are in agreement that it is service continuation and Y company will consider your past experience with X company to be service experience. I do not have any probation and am eligible for the yearly appraisal cycle because I have already completed 3 months in X company.

How should I list this on my resume? I do not want to look like a job hopper because I changed companies when it was this type of move.

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You have two options (these are opinions as there are no rules for resumes, only some guidelines based on experience):

  1. List both companies separately on your resume. In the description for the second company, add a parenthetical note along the lines of "(Internally Transferred from XYZ company)."

  2. List both companies consecutively with a single description.

Company ABC
Company XYZ, 2015 - Present
(Related companies, internally transferred)...

If you want your resume to be easily (and correctly) scanned by the software nearly all recruiting sites and departments use, you'll want to use Option 1.

Again, these are opinions. Most industries prefer plain old resumes since they automate processing them to filter out candidates to get the list down to a manageable size. Some industries, like graphic design, for example, probably have wild variations in resume formats and you can pretty much do anything you want.

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IMHO, listing the positions should depend on your responsibilities and status at the companies.

  1. if you are full / part time employee and your duties are the same for both companies, list initial company as main with starting date and in one of the bullet points under that position mention internal transfer to second company for the payroll reasons.
  2. If you are freelance contractor, these are two different clients you work for, even if your role / duties are the same.
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I agree with Kent's answer, but I wanted to answer from a different perspective. I don't like giving subjective answers when there is already a good answer, but I kind of see resumes differently from other people.

The life-cycle of a resume is very short. The main goal here is to compel a person to read it and call you in for an interview. If we take a moment to think about who this person is, and what their tasks are. I think we get a better idea of what to do.

This person has to do the following:

  • They have to read a lot of resumes.
  • They will only read the top 1/3 of the first page before deciding to read more.
  • They spend an average of 8 seconds deciding if it's worth reading.
  • They often have to show the resumes they've selected to someone else. So they don't want to look bad. So they pick ones that have sharing value.

I'm going to play devil's advocate here and explain why you shouldn't try to explain things in a structured way.

If you split company X and company Y into two chronologically separate entries on your resume. You're visually telling the person (without them having to read it) that you engaged in an active job hunt when in fact you did not do this. They spend all day reading resumes that show each job hunt as separate entries on the resume. You are also visually telling them that your current period of employment is short, and your previous job was longer. This is also not true as you've been employed by the same "job" while maybe different payrolls, but from your perspective it's just been all one job.

If you keep it as one chronologically single entry on your resume, but do something visually different with the title, then you're interfering with their quick eye scan. They want to know if this person is telling a compelling story about themselves and should I stop scanning and start reading, or do I go to the next resume. You haven't compelled them yet when they've reached the title. So don't break their chain of thought. Keep all your job descriptions consistent and easy to read.

You should put the internal transfer as part of the job description, and put it at the end of the description, but there are exceptions. The exceptions are very simple.

Is this transfer relevant to the specific job you are applying for?

If it is relevant then it should be highlighted and expanded upon in the resume. Under the job description for the current company Y you work at, but if it is not relevant to the job you are applying for, then don't waste their time with an explanation.

If you are not targeting your resume to a specific job, but posting in online for "whom it may concern", then keep it easily readable and focus on your hard and soft skills.

You will get your chance in an interview to talk about your previous job. It's the most common question. Focus your resume on getting the interview.

The 8 second reference can be found in a few books I've read. Links can be provided if I'm asked, but it's fair to think people scan first before committing to read it.

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