Historically, progress in a financial services career was achieved through movement: you switched job and employer every few years for a better position, a higher salary, a guaranteed bonus. The financial crisis put an end to all that, but a new study suggests switching jobs wasn’t the best strategy anyway. The most successful people in an organization are those who stay put.
Two professors at the Wharton School of Management, which runs one of the top MBA programs for investment bankers, looked at the careers of their own alumni. They found that alumni who stayed with one firm and who switched jobs within that firm, had more important positions than those who switched jobs and employers. The reason for this was simple: people moving to new jobs within their existing employer were likely to be given a pay rise and more responsibility, whereas people moving to new jobs with new employers were simply likely to be given a pay rise.
“Internal moves are quite important in moving ahead in your career,” say the academics. This doesn’t mean you should avoid moving externally, but when you do you should be aware that you could be delaying your promotion. – There’s a trade-off to an external move: higher pay, slower progression. The better bet is to, “find a job where there is room to grow inside that organization,” say the Wharton professors. This is the “smartest career strategy,” of the lot.
Separately, the Wall Street Journal reports that Harvard Business School graduates, some of whom have no experience of working in financial services whatsoever, are getting much higher pay increases than established bankers. Median base pay for HBR graduates rose by 25% this year, to $125k, according to HBR stats. That compares to a predicted pay increase of 7% for equities traders and a decline of 4% for fixed income professionals. The reason for the increase looks simple: technology companies are offering HBR graduates $125k and banks have been compelled to match it.
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Photo credit: Heather Katsoulis