Finance Careers- Why Job Titles Matter for Careers

Why Job Titles Matter for Careers

Job titles are badges of authority. Not getting the correct job title appropriate to your position, duties, authority and achievements can undermine your standing both inside your company and with key outsiders such as clients. Additionally, not getting the job title that you are due can hinder your pursuit of future career opportunities, both inside your current firm and as a potential outside hire by other employers.

You probably will be seen unfairly as someone who actually is at a lower level of achievement than the one you have attained. Please also see our closely related article on the matter of what job descriptions mean.

Job Title Scenarios

In one scenario, an employee gets a de facto promotion but does not get an upgrade in job title to that of the former incumbent. This may signal either a downgrade in the importance of that job, or be utilized as a not so subtle device by company to lower the level of compensation associated with that position.

Sometimes, people are hired into firms or enticed into changing jobs within firms based on promises about future upgrades in job title. Unfortunately, where these agreements are purely verbal, as they often are, there is the risk that management may renege on them, even by claiming never to have made them. The danger is especially high when there is a change of supervisor for the employee in question, and the new manager denies being bound by his predecessor's promises.

Difficulties in getting an upgrade in job title may occur for worthy employees even if they do not lead automatically to higher compensation. Managers may be using the denial of upgrade strictly as a means to assert their authority.

Another job title scenario is one in which your management grants you an upgrade in job title, but your human resources (or HR) records do not reflect it.

When this occurs, it is typically an error of omission, but in some machiavellian firms, it can be intentional. A case study follows.

Case Study in Job Title Errors

An actual case study in human resources (or HR) errors involved someone hired with the explicit understanding that he would get an Assistant Vice President (or AVP) title immediately upon starting work with a new employer, a leading financial services firm. During the course of over 4 years in a position at corporate headquarters, that person got every indication that he indeed was an AVP. This included the title on his business cards, his eligibility for an office rather than a cubicle, the design of the nameplate on his office, the amount of vacation time to which he was entitled, and even the title as it appeared on various personalized human resources documents in his possession.

After those 4 years at headquarters, this person moved to a job in a different division of the firm, a separate legal entity with its own human resources department and payroll system. More than a full year after that, he was utterly surprised when his current boss congratulated him on being upgraded to an AVP title. When his human resources records were transferred with him to his new division, an indication of his previous possession of the AVP title inexplicably had failed to come across as well.

When the employee pointed out that he already was an AVP from day one with the firm, his current manager investigated and determined that, somehow, there were errors in how the personnel records were maintained, and in how they were transmitted internally. Luckily, the employee quickly was able to get an upgrade to full Vice President instead, which actually was long overdue by that point in his career, given both his total tenure with the firm and his performance to date, which had merited stellar reviews from all previous managers as well.

The Meaning of Job Titles in Finance

The financial services industry has unique conventions regarding job titles. Knowing these will help you evaluate job opportunities and your career progress. Two other closely related topics are why job titles matter and what job descriptions mean. Follow the links for articles covering these issues in depth.

A Quick Digression Regarding Other Industries

For those pursuing careers in financial management or financial analysis in industries other than financial services, two points are worth making.

First, if you choose to work for a relatively young firm in a field such as technology, media or creative services, you may receive a rather quirky or idiosyncratic title that will be meaningless (or, worse yet, seem frivolous) to more traditional firms, should you later want to change employers.

Second, if you join a very large and bureaucratic firm, you may be assigned a job title that gives no real hint of your actual responsibilities, and thus may confuse a new prospective employer. This is especially so if you hold a relatively unique position. It is possible that the firm will not create an appropriate title, but instead assign you an existing one that seems "close enough."

For example, in its final few decades, the vast bulk of the white collar workforce in the old Western Electric division of AT&T consisted of engineers and computer programmers. The latter got job titles such as Information Systems Staff Member (ISSM) or Information Systems Senior Staff Member (ISSSM).

Western Electric also employed a contingent of economists, management scientists (often called quants today) and financial analysts to forecast sales, support budgeting processes and analyze competitors. Because their number was relatively small, they were not deemed to merit a unique set of job titles, and thus were categorized as Information Systems Staff.

This was confusing for hiring managers in other AT&T affiliates, never mind for those outside AT&T.

Vice President

Most noteworthy is the liberal fashion with which financial services firms give employees the rank of Vice President. In other industries, this designation is reserved for a handful of the most senior executives. In a financial services firm, Vice President generally is an honorific earned by an individual, or an indicator of rank, rather than a descriptive attached to a specific position in the firm. A Vice President title often is conferred as a promotion in place, with the recipient retaining his or her current job and responsibilities.

Because so many management employees eventually become Vice Presidents, there typically is a hierarchy within this broad category. For example, by the late 1990s Merrill Lynch had this menu of VP job titles for support staff, with the highest at the top:

• Senior Executive VP
• Executive VP
• Senior VP
• First VP
• Director
• VP
• Assistant VP

Among the above, only the two varieties of Executive VP actually attached to specific jobs within the corporation. Director was introduced by Merrill Lynch in the late 1990s, as a way to single out certain VPs for special recognition while leaving them in place.

By contrast, getting an upgrade to First VP usually required holding a job at a higher level in the organizational hierarchy. To complicate matters further, First VPs might have Directors or ordinary VPs as their peers on the organization chart.

An upgrade in job title may or may not bring an automatic increase incompensation, or in the potential for future increases. Benefits such as vacation time typically do indeed increase with such upgrades. The rules vary among employers.

Within the universe of producers there normally is an entirely separate hierarchy of Vice Presidents, with different criteria for admission and different benefits associated with each level.

For example, a financial advisor might be elevated to VP-Investments or First VP-Investments based on reaching specific quantifiable criteria related to the size and profitability of his or her book of business.