How efficient are hiring markets over time?

Hi all — been reflecting on some gutting rejections from lateral processes lately and found myself wondering about the efficiency of hiring markets long-term. Appreciate any insights, especially from more senior WSO members with experience navigating these dynamics.

It seems like, early in one's career, hiring is more heavily distorted by biases; academic pedigree, social behavior, tribalism, minimal technical missteps, even appearance sometimes overshadowing talent / passion... Over time, I would love to believe that the market corrects itself, and that true ability, passion, and performance become equalizers. I assume driving factors here are things like burnout among unimpassioned nepo hires, declining emphasis on pedigree, cumulative confidence gained through experience, etc.

For context, I worked very heard to break into my current seat at a rather small + specialized buyside firm after going nontarget -> no-name boutique IB. My day to day is quite technical and I spend much of my spare time reading / learning / practicing, yet I struggle with getting any larger firms to take me seriously. For purposes of this conversation, just take my word that both my technical skills and soft skills are strong.

It's disheartening to think that, by the time my experience and track record develop enough to attract more serious looks, I will likely be too senior to receive the mentorship I'm looking for. Also worth mentioning that the universe of lateral opportunities seems to get much smaller with every title increase (fewer seats, incumbents more entrenched, skillset harder to develop, senior team believe potential bad habits too far gone to 'retrain').

TLDR: Apologies for ranting and will boil the above down to the following — are hiring markets actually efficient over time? If so, do opportunities to lateral diminish so much that it hardly matters?

Thanks in advance.