Avoiding Career Bottlenecks

It is not uncommon for a financial planner to find that many clients have hit a proverbial “ceiling” in their career trajectory. As we’d observe it, this is seldom because of any limitation in their capabilities or capacity but because of a classic problem: The person on the next rung of the career ladder is happy where they are, or perhaps the person on the rung above that person is happy where they are, or the person above that person, and so on. Organizations have a naturally pyramidal hierarchy, as large layers of base-level staff funnel into a smaller group of supervisors, who funnel into a smaller group of managers, who funnel into a smaller group of directors, and so on. While organizational supervisor-to-employee ratios can vary wildly based on industry, many studies have found the optimal amount of direct reports to managers varies between 4-7. However, this presents a problem: that’s potentially 4-7 employees who, if they are all ambitious, are fundamentally competing for the same position, let alone if the position is homogenous across other teams and they may be in competition with several other teams of 4-7 for the next big opportunity.

With these problems in mind, today, we’re talking to both the employee readers and the employer readers about how to navigate the natural bottlenecks that occur within an organization and how to circumvent them.

The Employee’s Context

Something to recognize early on in a position is whether the position is a job or part of a career. A job is fundamentally a terminal position. Think, for example, of being hired as a pizza delivery driver. The position has low pay, long hours, is highly demanding in lousy weather, encompasses an element of personal cost (the use of your personal vehicle), and is consequently a high turnover position. Seldom is someone going to start a job as a pizza delivery driver with the expectation that it’s the first step on the long climb to pizza company CEO, nor is the business hiring them with the expectation that they will need to develop that driver’s professional capital.

When a position is a job, the only natural thing to do as an employee is plan for your inevitable exit. So long as the job meets your income or lifestyle requirements, there isn’t necessarily an impetus to leave immediately. However, for ambitious employees who see more for themselves than this limited opportunity, improving human capital through education or other avenues to permit a leap to bigger and better things becomes imperative. For example, for a college student who bartends on the weekends, bartending is a means to cover their expenses until they finish their education.

However, when the position is a career, then two fundamental things must be understood:

1. Despite the paycheck that shows up every [week, every other week, twice a month, month], there is no such thing as true job security; all positions are fundamentally can be terminated if the right circumstances exist for the business, agency, or organization you work for. Consequently, undying loyalty to any institution is an asymmetrical risk that does not favor you as an employee.
2. Promises are worth as much as the paper they’re written on.

Let’s dig into each of these further.

Job Security is an Illusion

There is a common bit of wisdom that suggests that job security occurs when you’re truly indispensable. But how many of us are really, genuinely, irreplaceable? As a financial planner, I’d like to argue that the return on investment for clients is easily measured and that anyone with a high-quality financial planner should hold onto them indefinitely because they fundamentally more than pay for themselves. Yet, despite the fundamental equation of “insert fee, receive fee plus value in return,” that formula breaks down in a circumstance where a client loses their income, suffers a major financial setback, or otherwise is put in a position where the fee for a financial planner, despite their return on investment, isn’t affordable in the time between payment and receiving the value.

Even the old salt at the steel mill, who has built everything and seen everything, might have incredible institutional and tribal knowledge that benefits the whole company. However, nothing is going to protect them from a layoff if customers stop buying the mill’s bread and butter product in favor of cheaper options elsewhere.

When I worked at IBM, it was incredibly common to hear about a “resource action” almost monthly; resource action is a euphemism for layoff. As a company that employed over 400,000 people as recently as 2000, you don’t get to a headcount of 282,000 by simply waiting for a third of your workforce to retire on their own timelines. Entire business lines that were IBM’s mainstays only a few years ago have been spun off, sold, or laid off as executives have made hard pivots over the years. No business, organization, or position is immune from the necessities of the environment that we work in, and thus, we return to the impetus of this section: Undying loyalty to any institution is an asymmetrical risk to you as an employee; not because loyalty isn’t often rewarded in many organizations, but because the relationship you have with your employer is voluntary on both halves of the relationship, and because the employer as a counterparty may at any time, and through no fault of yours, make the decision that it’s time for you, your team, your branch, or your division, to go. Even worse, it may simply be a result of the marketplace for the company’s products or competitors who take the decision away from both you and the company.

Promises are Worth as Much as the Paper They Are Written On

Or rather, that they’re not written on. As any business attorney will tell you: Good agreements make for good partnerships. Yet, in an employee-employer context, it’s not uncommon for an employee to take the promises of a supervisor or manager in good faith. For example, an annual review comes around and the employee receives an “above average” raise of a few percent more than their peer group. Encouraged, the employee asks if there’s a promotion in their future. “Probably soon.” Says the manager, and thus the employee is encouraged. Six months later, someone else gets promoted to a senior position on the team, and the employee is left to wonder: “Was that the position they were talking about?”

The thing about the scenario described above is that it’s likely that everyone had a good faith basis for their inputs and takeaways. The employee got a positive review, the manager recognized their potential, and the idea that there could be a promotion coming up isn’t an unreasonable expectation by either party. However, that says nothing of whether the manager had a similar conversation with the other employee who received the promotion to the senior position, or whether that employee had a separate conversation with a manager above this particular manager, or whether there was already an agreement in place that they would be promoted at that time, and so on.

Regardless of the reality of the example above, similar things happen every day in businesses for countless reasons. Sometimes it’s simply a harmless miscommunication or misunderstanding, other times it’s forgetfulness about that conversation from months ago, or can even be malicious or nepotistic in other cases. All of that is to recognize that our example employee had no actual guarantee of an upcoming promotion, only an expectation that was not met. This, in turn, is something employees need to recognize in their workplace: there is a significant and material difference between a verbal suggestion or promise and a written agreement or clear and documented expectations.

So, how does an employee avoid career bottlenecks?

There are two approaches to the potential problem of career stalling within an organization: one is internal to the organization, and one is external. Let’s discuss both.

The internal solution is written benchmarks and expectations for advancement. It’s noteworthy that this is not an option, generally speaking, in “jobs” but is almost a necessity in a career-based position. Examine the example of a tenure-track professor. Just about any associate professor on track for tenure will know that their job involves a certain amount of teaching (“course load”) and a certain amount of research, with the classic mission being to “publish or perish.” Examine the example of the brand-new attorney at a law firm. Laid out in any law firm of significant size is a steadily expanding set of responsibilities and expectations, leading to some opportunity to become either a non-equity or equity partner in the practice. Examples abound.

Yet, many employees will apply for a position and accept an offer from the employer without any clue as to where it can lead. While some companies have published and laid out career paths, in other instances, it becomes a requirement that an employee ask for clarity and that the clarity be in writing. A couple of items of note for those who have to take this approach:

1) You cannot demand promotions or compensation increases without a commensurate increase in responsibility or productivity. For example, salespeople have little difficulty in earning more income because there is a direct correlation between their work activity, revenue to the firm, and in turn, commissions paid to them for their productivity. In turn, for those who don’t have a direct revenue-producing responsibility, a direct orientation towards increased value (e.g. the creation of new products or services) or the reduction of costs (increased efficiencies) is required unless the promotion is simply going to come with the aforementioned increase in responsibility. Demands to be paid at a “market rate” are not terribly feasible when the “marketplace” is the employer’s internal staff budget.

2) Patience is required, but a lack of commitment is not. Many employers are willing to entertain these conversations because it shows the employee is engaged and likely wants to build their career within the company. Still, they’ll balk when it comes time to commit to timelines or benchmark expectations. You cannot simply lay out an ultimatum for the employer to give you a timeline or benchmark on the spot, but you can be highly persistent in stating your expectation that it be produced within a reasonable timeframe.

3) There’s a difference between “no for now” and “never.” There can be an abundance of reasons why a company is not going to promote you or give you a raise that has nothing to do with you. The company’s revenue may not support it; there could already be a commitment in the budget that absorbs all the firm’s financial bandwidth for the next few months or quarters, or otherwise, there could be someone who is ahead of you in line. At this point, you have to make a judgment call about whether the “no” of the moment is just momentary or if you believe it is likely to persist. If it’s fleeting, continue in your pursuit, and if it’s expected to be permanent, it’s time to start brushing up on your value proposition and resume.

What about the business owners?

The advice here is a funny thing. Years ago, I wrote a blog about “getting paid what you’re worth” for people in the “employees” camp, and had a business owner send me a scathing email afterward about “knowing nothing about [their] business, [their] employees, and [the challenges of their business.]” I hadn’t written the piece about them, but they were upset at the ideas I’d laid out. Such was their right. However, it often gets missed when I write about what employees can do to better their lot, I’m doing so as a business owner with employees, and whose employees read these blogs every week.

Thus, one might point out that my employees should go about taking my advice. I encourage them to do so, but perhaps I’m cheating in that regard because, as a firm, we practice what I’ve preached so far. Every employee hired is explicitly told up front whether the position is a “job” or a “career” and has the potential therefore laid out for them. Every position has clear responsibilities and expectations, requirements for the next promotion, and timeline expectations for doing so, along with the commensurate compensation increases that go with it. Every employee is encouraged to take ownership of their professional development and to manage their career with an eye toward the objectives we set for them. If those objectives don’t align with their ambitions, that’s their determination to make, but at no point is anyone in the dark about what we’d like to see from them as they grow professionally in a career with MY Wealth Planners.

So therein is my suggestion to any business owner reading this, whether a solopreneur is thinking about making their first hire or a manager whose business is responsible for dozens of livelihoods: lay out the path for your employees and make it clear. Not sure where the person can grow from being a barista in your coffee shop? How about the potential for being a shift supervisor or shop manager after the shop has hit a particular volume of sales or grows to a certain team size? Not sure where your receptionist/assistant can go in your consulting business? Well, if you keep growing said business, is it not impossible to think that you may need an operations specialist who knows the inner workings of your enterprise, having been your right-hand person for the past X months or years?

Be creative as a business owner. Sometimes, our creativity is finite, and we are exhausted by the endeavor to develop a path for every person and every role. And that’s fine, but be honest with the folks you hire in those circumstances and ensure they know that it’s a job, not a career; or, tell them you’re open to their suggestions in the future. I think everyone is ultimately much better rewarded when every position has the opportunity to be a career, but that doesn’t mean that every candidate is a good fit or every position will last forever. What matters is that as business owners and managers, we have the responsibility for helping steer the course of the lives of those who choose to work with us and for us. It behooves us to honor that effort on their part, to lift them up when and where possible, to accept the career choices our team members make, and to honor the career ambitions they hold.