As some of you may or may not be aware, the golden watch era in Corporate America is dead. Gone are the days where you get in with a company and work for them for 30-40 years, get your golden Rolex and then call it a career.
Early on in my career I gave a compelling argument to my boss as to why I deserved a higher salary. He laughed and said unfortunately it no longer works that way. If you want to keep climbing up in salary, you need to work at a place for about 2-5 years and then jump ship to another company. Rinse and repeat.
At the time I hated him for that because I didn’t get a raise despite my compelling and logical argument. I quickly realized it was great advice (and probably the only thing considered leadership that guy ever did) and found myself a new position at a different company.
I have had a lot of time to reflect on that statement and have come to the realization that it is 100% (for better or worse) correct. It is unfortunate in the sense that you can’t get in with a company and spend a career there, working your way to the top while also collecting increased bonuses and salary.
There is so much hopping around in the corporate world it isn’t even funny – and because of this I believe it has led to a decrease in the quality of American products and services. You get all these people in companies that are no longer invested in the company. They are basically long term subcontractors looking to hit their income apex and then jump ship to the next company.
Fortunately, one of the things I have picked up on that has given me a glimmer of hope for the future is that employees can become a jack of all trades, if you will. Sure, gone are the days where 30 years with the company accounts for a huge paycheck and bonus potential; however, the people that last longer at these companies, that make good leaders and ultimately C-level executives are the ones that have spent some time performing several different functions.
Once they get to a top leadership position they actually know how to run the place as opposed to only knowing about one specific aspect of the business.
I guess where I am going with this is don’t be afraid to branch out. Just because your job title or career path is in finance doesn’t mean that is the only thing you have to work on or the only place you can add value. Don’t be afraid to dive in head first with the business development or marketing groups. Hell, don’t be afraid to explore career opportunities in those fields if the chance presents itself.
When I first started out I was in strategy and business development, and then jumped over to a very technical financial role. Now that I am back in Strategy and Planning I can see that I am much more equipped to handle my job and it has opened up a lot more doors for me – all because I expanded my horizon and added tools to my toolbox.
Who knows, maybe I’ll get that gold watch after all.
Mod Note (Andy): If you haven't already, check out Nefarious's great two-part interview series, part 1, part 2
"I believe it has led to a decrease in the quality of American products and services. You get all these people in companies that are no longer invested in the company. They are basically long term subcontractors looking to hit their income apex and then jump ship to the next company."
This is very well stated, and as foreign as that mindset is to me, I'm jumping ship soon for this very reason.
"If you want to keep climbing up in salary, you need to work at a place for about 2-5 years and then jump ship to another company."
This is exactly how my career has been; surprised that others were in similar boats.
How are you defining Corporate America though? I interned with a massive F500 consumer products company during college and had the opportunity to meet many of the engineers that work in the factories and this was far from the truth. Most of the people had been there for 10+ years with a large majority of them there for 20+ years. Some of the executives were previous engineers who had worked their way up the ladder.
You state it has led to a decrease in quality of American products and services, but has it truly? Yes, I agree that most of the time, in order to get that next bump you need to go elsewhere, but I disagree it has affected American products. The people who tend to be jumping ship 2-5 years are the desk junkies, not the engineers who are actually creating these products. This in turn is why I ask, what do you mean by Corporate America? Do you mean all those people stuck in their cubicles or employees of corporations as a whole?
This is particularly topical for me right now. Thank you for writing it. +SB
I told you your post would relate to my article
And of those engineers do you know their salary? I bet if we took the salary of those guys working there for 10-20 years, you would see very small adjustments to salary (possibly even only the typical 2.5% merit each year adjusting for inflation) with maybe a meaningful raise every 5 years accounting for promotions.
Most engineers are content making a decent living and doing something they love. A lot of them simply settle. One of my good buddies has a masters in engineering GT - he is a genius. His problem? He is content. He could get more money if he tried, but he doesn't care.
Obviously there are exceptions to the rule and I am not sure how old you are or what field you are in; however, pretty much everything I have outlined in this article (for better or worse) is the way the game is played now.
yup, this is pretty accurate.
@Nefarious-
I do agree with your article as a whole. I also agree with your response about engineers being content. Considering the location and lifestyle equated to the factory's location that I discussed, this is probably the same situation. I was merely providing a data point for the other side. FYI, I've been in MO at a BB for a year.
I cannot name the place but an executive at a very large, very very famous American company (you have probably all used its products) told me recently that the secret to his fast rise (and ridiculous comp and perks for someone who turned up at the office at 10am) was that he "stuck around". Because everybody was so focused on jumping ship to get a higher title, better package, or just for the sake of being bored, somehow those who stuck around got promoted into sinecures with enormous compensations. The leader of a 13 person team was paid 7 figures USD (mid-high, not 1), he started on low-mid 6 figures and "stuck around" for 4 years.
Caveats: - this is in Asia, not the motherland (maybe y'all should go east) - the team leader was a partner in MBB, so we are squarely in executive world, not entry level - the business is a great one and not much effort is needed from the executive team (although my opinion is that in most cases executives are completely interchangeable); in those cases just being a pleasant individual is a winning strategy
Still, don't generalize from a few personal cases. Sometimes you should jump, sometimes you should stick around. If everybody says jump, maybe it's time to stick around.
what if you cannot get a new job with higher salary .
I find that this is extremely true on the buy side...until a point. Once you hit a certain level of seniority, you really have to try to find a winning team and knock it out.
I think there is definitely something to be said about loyalty. Take what I'm saying with a grain of salt, because I'm still in college. However, my father stuck with his company during 07-08 when they were on the brink of bankruptcy. He took a 60% pay cut, while his colleagues all jumped ship, understandably. Now he has a higher salary than he ever has in his life and is able to personally invest in the projects they are working on. Just a personal anecdote, but some of the old school guys definitely don't like seeing someone that can't stick at one company, especially for senior exec positions.
And it delivered!
That's a good story, and good for your dad, but if the past year has taught me anything it's that loyalty makes you a fool.
Companies are happy to underpay you, undervalue you, and can fire you at a moment's notice. Why you owe them anything beyond your job description is beyond me. Loyalty, like trust, is earned.
Look, the upper level managers in corporations don't see employees as assets. We are expenses that need to be minimized. There's no point in being loyal to them. They just look in the short term to meet their quarter numbers and make it look like their piece of the company is growing. What they want most is for the underlings to feel "loyal" so that they can extract as much work for as little cost as possible from them.
I wish this wasn't true, but it seems to be. Not many organizations have a "promote from within" culture - instead they'll turn to business schools, recruiters, consultants/bankers, etc.
It's a vicious cycle. Employers want somebody who can hit the ground running from day 1, or brings something new to the organization. So they hire externally. Employees realize they don't have a chance of moving up, so they leave the firm. Employers, seeing this high turnover, feel justified in their choice to hire externally: after all, why would they invest time training employees who would turn around and leave?
I don't really agree with this post in general. A lot of what gets you promotions or whatnot is experience at a firm and having firm-specific knowledge or knowledge of the firm's specific clients and idiosyncrasies, and most importantly trust from superiors, all of which takes time to build up. It's true that you can stagnate in a particular role and get a slight boost by going somewhere else, but you can also enter a less senior position at your new role because you are still fresh at that new employer and still need to prove yourself. Really not fair to generalize so broadly. At every group I've worked in many of the most senior people (and hence highest paid) had been there for a while.
I think the problem you are having is only viewing this from the perspective of the areas you have worked in.
You just proved my point...IT DEPENDS.
This. Like it or not, it is the MO of many organizations trying to maximize shareholder value and extracting the most from their employees.
I'll agree but say there is a point where you need to put some time in. I think the key is to always be moving around, in the same company if provided or if you hit a dead end somewhere else. GE is great about rotating talent so you can see the whole business, stay engaged and build your network.
I'd also add that you should always be building skills, experiences and contacts. Too many people fail to refresh or expand their knowledge base and network.
Good post though and a valuable lesson .
This post is particularly true for specialized types of roles: research, engineering, etc. For truly generalist/managerial roles (especially the more senior ones), I tend to agree with GoingConcern. If the company is relatively well functioning, they will want people who have the general skill sets required for the job plus the specific knowledge about how to navigate and interpret the company. However, of the company is flailing, outsiders would be preferred because everything is worth changing. It depends.
Agreed, especially on the last two sentences. If the P&L keeps hovering in the red, mgmt will look to hire someone from the outside who is perceived as a game changer.
This is great stuff as usual. As a young Corp Fin guy I really appreciate your posts.
Nefarious, How did you jump from a Strat/Bus dev role to a Finance role? More generally, how would someone jump from 2 very different functional areas with large amount of skill difference?
Did you all of the sudden get 100% knowledgeable about an area you didnt know before? If yes how did you go about doing that?
Reason I am asking is I got my foot in the door of a very good F500 firm, but definitely thinking of moving to another function (Corp dev/Strat or financial analyst type of role)
I just have absolutely no idea how to get out of my current role.
Other than that, top notch post.
I am glad to hear it!
@euinvestor11
Check out my two part interview I did a few months ago. I think the links are at the bottom of the main article. That should help clear up some questions.
Thank you Nefarious, I will read part 2. I had skimmed through part 1, am myself quite an inside follower of the Defense & Aerospace industry and generally of foreign policy.
Although as a European our industry is much much less developed and smaller than yours in America. We do have some niche players though with good performance, in addition to EADS/Airbus although they are refocusing away from Defense as I understand.
+1.
@Nefarious- I really like this series. Keep this kind of stuff coming.
You better, it is costing Patrick $10,000 per post - @wallstreetoasis.com
That's all you make for blogging?
Bah, you're getting screwed
Patrick told me 10k was industry standard.
Might be time to jump ship.
you guys would be surprised how little $ each incremental blog post brings in...I wish I could pay $10k per post, or even $20, but 99% of our traffic comes from our long tail of content, which means that each incremental post adds a bit, but not much...now unless you write something like "Life After Investment Banking" post which went SUPER VIRAL :-)
I think content like @moneymogul and these series like @nefarious- are writing have a better chance to get a wider audience, but still not super viral content (yet)
for that you typically need not just good writing, but controversy, shock, humor and/or some combination of the 3...
EADS is a solid company - I think they are transitioning more towards focusing on planes though after their merger with BAE fell through.
Excellent post as usual. To challenge the instinctual comfort zone is a difficult task to achieve, but for those who embrace the uncertainty to pursue the unknown, great things await.
Goals for next CRE blog post: racial overtones, murder!, and hilarity...and good writing...
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