Dry Promotions - Everyone Has a Limit
Less than 12 months ago, the phrase “dry promotion” had never crossed our paths – of course it’s not a new concept, but the phrase itself is novel.
The concept describes situations where companies promote people, adding additional responsibilities or more senior job titles, but without any increase in actual pay.
The concept has existed for decades and more, but it appears to have gained traction during the unrest of 2022/2023 where supply chain disruption caused significant economic instability. During this period, companies could easily point to macro factors justifying the cost constraints and this would often be hard to argue against the backdrop of tumbling public markets.
One thing is for sure, tolerance to these lip service promotions is waning - everyone’s patience has limits.
A recent report from Harvard Business Press and Data ADP, cites that 29% of employees quit within one month of a dry promotion. So whichever side of the table you sit, if you are considering offering or accepting a dry promotion, keep this figure in mind.
It’s probably better to accept it’s time for a bigger change. As a hiring manager you should either find some budget to increase pay or as an employee look externally to consider a move.
With experience of talent management, my advice would be to stay away from dry promotions.
If you genuinely want to retain the individual, you should offer a package enhancement straight away. All too often the employee can feel that their expertise or contribution is being taken for granted. If budgets are constrained, can you negotiate a different element of enhancement in the short term, can you offer greater flexibility or additional leave that the employee would be genuinely happy to accept, something they see creates value for them.
Whatever the elements of negotiations, being fully transparent on both sides is essential if you want to sustain good relationships.
If you don’t offer your best deal and the employee is offered a better package externally, then our experience tells us that getting involved in counteroffers is fruitless. In these situations quite often the employee is moving out of principal so a short term counter offer will only act as a sticking plaster. Of course, there are always cases where individuals have an overinflated view of their self-worth, but deep down as a hiring manager you will know this so getting drawn in to counter offers in this situation is definitely something to avoid. Instead accept that the relationship is no longer what it once was and with fresh eyes consider what it is you need.
This is where external recruitment and search firms add so much benefit. Services to map the talent market is something a good recruitment house will provide and offers significant benefits, particularly in sectors such as chemicals where niche skills are fought after.
Dry promotions have definitely risen over the years. In the US, the Wall Street Journal reported a 5% increase between 2018 to 2024 to 13%. If so, companies must reconsider their own internal retention methods, including an assessment of realistic salary levels in their external market and by cross-functional career development moves. The latter, not only enhances collaboration across the company, supports growth business areas with necessary skills, but also helps build a ‘real’ people culture. The employees benefit from greater experience, helping them to be more skilled and fulfilled. They will also have gained more visibility and additional ‘ambassadorial support’ from more senior leaders in their business to aid progression too, (and can’t be as easily trapped by one manager wanting to retain them in their team for more negative/selfish reasons).
All managers and HR teams must keep track of employees’ aspirations and motivational factors, especially their high talent, with regular communication, 1-1 feedback or management development training programs even if these have gone slightly out of fashion as seen as too expensive/old school. Are methods like these too expensive in the long run? Not if the result is retention of valuable skills and having a ‘real’ people culture that looks after your people. Successful companies see their staff development, retention or recruitment as an investment rather than a lost cost.
RMG are specialist head-hunters in the Chemicals sector - we also have our own ‘Talent Network’ keeping tabs on the most exceptional individuals in the market who may be quietly looking for their next ideal move. If you want to access the network or are considering a move please do reach out to me in confidence – 01928 711 800 or email anita.caldwell@rmg-uk.com.
