Money is not promotion

Careers Photo: Thinkstock

Don't be tempted by a larger salary at a smaller firm, Orna Rudi warns, in the long term your career and bank account will lose.

When you ask people to define what is promotion in their career most of them will answer "a higher salary" as their first response, sometimes even as their only response. They are wrong. Improving the level of remuneration means more money in the bank account but in career terms, that's not promotion and sometimes it's even a step backwards.

So what is career promotion? In contrast to academic opinion that doesn't understand too much about career management, promotion means improving the internal elements of the job - a more senior position (professional or managerial), more authority and responsibility, a move to a larger company or better branded company, a more advanced market or sector etc. This is as distinct from the external elements of a job such as salary, company car, and other perks etc. that have a negligible impact on positioning in the market.

Why? Because the value of a brand derives first and foremost from the substance of the job and what it entails, which forms the basis for further promotion and empowering the value of the brand, and so on. Moreover, sometimes it is worth taking a drop in salary for a better position that will serve as a career springboard - a job that will probably lead to a far higher salary in the future.

Number 2 can be better than number 1

Here is an example of a concrete dilemma. The CEO of a company that has annual revenue of NIS 110 million receives an offer to serve as vice president of a company, with a small number of senior executives, and annual revenue ten times larger (about NIS 1 billion) than the company of which he is CEO.

He plans turning down the offer outright because he is reluctant to relinquish the title of CEO, and it would further require foregoing 15% of his salary (more than NIS 10,000 per month). He is wrong. As somebody who aims to head a large company, he has failed to take into account his positioning in the job market and to understand that the route to the target he has set is via being number two in large companies and not being number one in small companies.

Ultimately, I was able to convince him that the market provides him with opportunities, according to the substance of the job in which he is working and not his level of salary. He was persuaded that the offer he had received was exceptionally rare and a meteoric promotion for his career, and a springboard because being CEO of a small company could not be compared to it. Four and a half years later, first as vice president and then senior vice president, he was appointed CEO of the company with a handsome monthly basic salary approaching six figures, and new horizons opening up before him.

In practice the most common mistake in the market is the opposite one. Vice presidents of large companies are tempted to become CEOs of small companies without comprehending that they are voluntarily abandoning the field with the big players and moving to tread water with the small players. The move is undertaken, just for this or that improvement in salary, and a more 'bloated' title, but with much more inferior contents.

The same goes for employees and managers in major companies who are lured by less good jobs that get their careers stuck sometimes with no change of climbing back out of the mud. This mistake is simply more common because there are more small and inconsequential companies in the market. Secondly because the companies that have good employees and managers are the large and major companies, which in the natural course of events employ higher level staff. Some companies successfully tempt good employees with good conditions, while others define the job in dazzling terms, and sometimes just being closer to home persuades somebody foolish to leave a good job.

Only in the public sector is salary a promotion

It is important to realize that a person who makes decisions mainly according to salary is likely to become entangled in a fancy chain of career mistakes that will ultimately cost them a hell of a lot of money. That's because money is the result - not the aim and because the criterion for choosing a job is the power of it as a springboard to the next job, and not related to salary.

When is it nevertheless to prefer a job according to salary criterion? When looking to the long-term, the job does not clash with career goals, or at the very least has similar potential for long-term job security. The same goes if a person believes that their career has reached a plateau from which there are no more prospects for promotion, so then it is worth considering a position with a higher salary, which ensures similar job security at least. On the other hand, if a career has reached a stage where it is fading, then the most important factor is job security for the longer term, even if it is for a significantly lower salary.

One final remark: this article deals with careers in the private sector only, while in the public sector it's sufficient just to be breathing, and the salary will grow by itself.

The author is a labor market expert.

Published by Globes, Israel business news - en.globes.co.il - on November 29, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Careers Photo: Thinkstock
Careers Photo: Thinkstock
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