It may be little consolation, but recruiting-industry research shows that, when competing against outsiders for a bigger job, only about one-third of internal candidates win.
Why? The company may be trying to acquire skills the organization lacks, says John Salveson, a principal at headhunting firm Salveson Stetson Group (www.ssgsearch.com). Or they may want to bring a new perspective and fresh thinking - even from a different industry - into the fold. Hiring outsiders also "sends a message to internal candidates that they are competing against the best available talent, from both inside and outside."
What can you do about it? Sally Stetson, Salveson's co-founder and partner, notes that current employees often don't compete aggressively enough. "Internal contenders for a bigger job shouldn't assume their colleagues and higher-ups know everything about their background and experience," she says. "You need to sell yourself to those making the hiring decision, and send a strong message that you're ambitious and interested in moving up."
Let's say you've already done that, you've had nothing but glowing performance reviews, and they still chose someone from outside. Keep in mind that managers are notoriously reluctant to deliver bad news, and whoever has been giving those great reviews may not have been entirely honest with you. You may have to press for answers on what the outside candidate has that you don't, and what you can do to improve your chances next time.
If you try all that, and you're passed over again, the company may be taking you for granted, and your best bet may be to look for a job elsewhere. Sometimes, if you really want to move up, you've got to move on.