Ever get promoted but your paycheck stayed the same? That’s a dry promotion. The dynamic global job market has witnessed various trends over the years, ranging from remote/hybrid work and the role of AI to co-working spaces. Amidst these, a new phenomenon is emerging, quietly but steadily – “dry promotion”.
A dry promotion is a promotion without the raise that typically comes with it. You get a new title and potentially more responsibility, but your paycheck stays the same.
While companies might see dry promotions as a positive way to motivate employees, it’s not always well-received. Employees can feel undervalued and overworked if their pay doesn’t reflect their increased responsibilities.
A report by compensation consultant Pearl Meyer suggests a jump in dry promotions. Over 13% of employers are giving out new titles without the usual bump in pay, compared to just 8% in 2018.
Moreover, in a survey conducted by benefits-advisory firm Mercer among 900 companies, it was revealed that a growing number of employers are allocating a smaller portion of their 2024 salary budgets for promotion-driven salary increases compared to the previous year, 2023.
Experts say this trend reflects a shift in worker bargaining power and economic uncertainty. Companies are focusing on cost-cutting, and with a tighter job market, they may see dry promotions as an alternative to raises.
Why dry promotion?
Sometimes companies just don’t have the money in the budget for raises for everyone who deserves one. They might see a dry promotion as a way to recognise your good work without the added expense. In a situation where there have been layoffs or staff reductions, existing employees might be expected to take on the work of those who left. This can essentially be a dry promotion, with more responsibility but no raise to reflect the extra workload.
In the past, companies dealing with labour shortages frequently felt pressured to provide significant salary hikes to retain their employees. However, the emergence of the dry promotion trend coincides with a period where certain employers are reallocating the duties of laid-off workers to current staff members without raising their compensation.
While a new title might sound good, employees are understandably wary of increased responsibilities without a raise. Social media is buzzing with discussions about dry promotions, and some employees feel they are being taken advantage of.
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