The Harsh Truth about Why You May Not Get Promoted!

When you join a large organization, you tend to hear HR buzz words like: career development, career progression, succession planning, growth opportunities, etc. Essentially, you are being told that your organization takes a tremendous interest in your career development. In many cases, that is indeed the case (but not always…).

In part, promotions depend on your performance, and fit within the company. However, promotions also depend on your boss and HR’s attitude towards helping you move up in the organization!

Let us step back and consider what makes for an ideal manager: generate higher revenues while keeping costs down. That’s how you maximize shareholder returns.
Now ask yourself: if a manager can extract the same output (i.e. financial analysis, or excel modeling) from an analyst who makes $100k, why would he be incented to promote that analyst to associate and end up paying $200k for the same excel file??? If the manager’s goal is to keep costs down, then he is better off not promoting the analyst, and obtaining the same output for less.

A counter argument would be that if you don’t promote qualified analysts, then they will eventually quit. However, some managers have noticed over the years that many people are very “comfortable” at their current job, and are in no rush to leave (even if they are qualified for a promotion). As well, the job market isn’t “efficient” in the sense that even if you are qualified for a promotion, it may take 6 to 9 months until you find a suitable job offer. Therefore, some managers simply choose to not promote you and “save money”, resulting in higher profitability for their organization.

Sounds awful - doesn’t it? Sadly, that is how the game is played in some companies. It’s nothing personal. It’s important to appreciate that we are each motivated by a different set of objectives: you are motivated to produce good work in exchange for increasingly better pay, while your employer is motivated to see you produce increasingly better work ideally for the same pay.

So what’s the solution? Simple! You need to A.B.L. (“Always Be Looking”)!

If you constantly ABL, you may notice that the opposite phenomenon may occur in your favor. Assume an organization is in desperate need for a 1st year associate. Ideally, the vacancy should be filled by a 3rd year analyst. However, all the 3rd year analysts didn’t apply (maybe some of them aren’t in job hunting mode, and are waiting to get promoted internally). In contrast, you are ABL… Therefore, despite being a 2nd year analyst, you apply for the job and get hired.

How come? It’s because the hiring manager is desperate to fill the vacancy, and you are the next best thing to the ideal skillset.

So remember the key take-away is ABL – Always Be Looking!

There is one important caveat: employers don’t like to see someone changing jobs too frequently. Hiring managers are worried that if you are quick to leave for a better opportunity, then what’s stopping you from leaving their organization once a better opportunity comes along?

Therefore, it’s important to only switch jobs when the opportunity is SIGNIFICANTLY BETTER. Effectively, it’s important to “Always Be Looking” and not “Always Be Switching”. But you won’t come across that significantly better opportunity unless you are always on the lookout for good openings.