Climbing the corporate ladder and earning a higher paycheck are the primary goals of any professional. And although no one wants to be in an entry level position forever, there are some important non-monetary considerations to consider before accepting a promotion. (For additional reading, see 6 Reasons To Make A Lateral Career Move.)
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1) More Stress
When someone advances within an organization, they will typically play a growing role in the decision making process of the company. More demanding jobs require closer attention to detail as the final product will not be reviewed by superiors. This will often translate to increasing the pressure to succeed at one's job, resulting in more stress in and out of work. Nobel Prize winner Daniel Kahneman stated "being wealthy is often a powerful predictor that people spend less time doing pleasurable things and more time doing compulsory things and feeling stressed." (Check out 5 High-Paying, Low-Stress Jobs.)
2) Less Free Time
With more pressing deadlines and a broader scope of responsibilities, people in upper management positions tend to work longer hours. Those whose jobs are heavily focused on client relations will not even have regular work times as their day-to-day schedule is dictated by client meeting requests. According to economist Dalton Conley, one of the primary factors driving successful people to work so hard is the opportunity cost of not working. For example, when someone makes $15/hour, they can afford to take a few days off to watch television; but when someone makes $75/hour, taking some time off becomes expensive.
3) Money ≠ Happiness
While making more money can allow you to buy nicer cars, live in a bigger house and take more extravagant vacations, having these luxuries is not a guaranteed predicator of happiness. The lack of free time and more work related pressures can force people to distance themselves from friends and family. Interestingly, the more money that someone has, the more they require to feel rich. Average income earners require about $2 million to feel wealthy, whereas, according to a Fidelity Investment survey of millionaires, high net worth individuals need $7.5 million.
4) Different Job
Promotions will regularly involve changes to the every day tasks of an employee. However, these changing responsibilities do not often align with the interests or the skill set of the individual. For example, junior analysts working at portfolio management firms usually start their careers in a qualitative role in which they analyze investment opportunities and model various portfolio metrics. Senior managers, on the other hand, are more likely to be involved with the qualitative aspects of the business such as client meetings. Before accepting a promotion, one must determine whether or not they will enjoy/be good at their new role. (Finance isn't all about the numbers. Find out what other talents are needed to land and keep a job. See Top 7 Non-Financial Skills Required In Finance.)
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5) Less $/Hour
Having a higher job title which entails longer working hours along with only a marginal pay increase is not the type of promotion most people aim for. Receiving a promotion without a corresponding increase in pay is also fairly common if the new position is simply a horizontal, rather than a vertical shift. This type of scenario is quite possibly the worst case for a worker if the new position requires more time, results in more stress and does not align with the interests of the employee.
Raises and promotions are part of the standard "corporate circle of life." However, sometimes people simply feel comfortable in their jobs and are satisfied with their paychecks and career prospects. Next time that you are offered a promotion, just make sure you understand the full impact that this may have.