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News

Promotions Without Raises Present Career Dilemmas

By:
S.J. Steinhardt
Published Date:
Mar 12, 2024

So-called dry promotions, which usually mean a new title with more responsibilities but no pay boost, are becoming more common, presenting employees with a dilemma, The Wall Street Journal reported.

These no-raise promotions are a sign of workers’ loss of leverage due to the lessening of post-pandemic labor shortages, when companies gave raises to keep employees. Now, with companies cutting costs, managers are giving the work previously done by laid-off employees to remaining employees without a raise.

“Giving away titles is free, giving away money is not,” said Tom McMullen, a senior client partner at global organizational consulting firm Korn Ferry, in an interview with the Journal.

For employees presented with this situation, the question becomes whether to accept. Agreement could cause resentment and burnout, but it could also lead to more money in the future if the employee uses the new title and credentials to secure a job elsewhere, said negotiation experts interviewed by the Journal.  

Robin Lynn Valentino was offered a promotion at beverage-industry company that would entail her building a brand with a sales force in another state instead of managing her existing sales territory. She would not receive a raise and would no longer earn her own commissions. Instead, management told her what a career opportunity the promotion would be. She declined the promotion and left after 18 months. Now she works as an independent contractor in the same industry.

“It feels very liberating to stand up for something that you know is not right,” she said, though the experience of being offered a no-raise promotion still rankles her.

Accepting a dry promotion makes sense when it’s a role that will propel employees career faster than their current track, even if going without a raise is untenable longer term, career and pay consultants interviewed by the Journal said. 

Workers should think about whether the promotion will help get them where they want to be in several years, suggested Dawn Fay, operational president at recruiting firm Robert Half. “You may get to be part of meetings and events that you wouldn’t otherwise, which can help you learn, grow and network,” she said told the Journal.

Fay also said that employees often accept dry promotions, then start looking for another job with their latest role on their résumés. That may be one reason why nearly 30 percent of people leave employers within a month of their first promotion, as the Journal reported last September, based on data from payroll-services provider ADP.

Career coaches told the Journal that they hear more, anecdotally, from women who have been offered dry promotions than from men. “Women tell me they feel pressure not to negotiate,” said Alexandra Carter, director of the Mediation Clinic at Columbia Law School and author of a book on negotiation. 

Carter suggested that if employees can’t negotiate an immediate raise to go with a promotion, they can set the stage for one in the near future by asking to revisit the discussion after a set time.

Forgoing an immediate pay raise can provide ammunition to press for other benefits, such as a more flexible working arrangement, extra time off or access to a training program, career advisers interviewed by the Journal said.

Krista Harrison, an associate professor and researcher at the University of California, San Francisco, told the Journal that her own no-raise promotion at a health care company several years ago taught her a valuable lesson: When the person awarding the promotion says there’s no money for a raise, don’t expect that to change.

She was asked to replace a departed employee on a major initiative. Denied a salary increase and staff support, she said that the company agreed to revisit the raise subject in three months. The follow-up talk never happened, and she left soon after.

Since then, she said, “I’ve been much more cautious of the unfunded things I’ve been asked to take on, and I’ve been quicker to step off things.”