The emergence of new trends every now and then is now a regular occurrence. While sometimes it is related to extended workweeks, other times it is about employees quitting in mass, employees having two jobs at once, and much more. Among these trends, a phenomenon known as ‘dry promotion’ is quietly gaining prominence, sparking concern among employees.
What is Dry Promotion?
Dry promotion is the term used to describe giving employees a job promotion without an accompanying raise in salary. The individual’s title changes, but their workload, responsibilities, and expectations increase without any monetary compensation.
According to a recent report by compensation consultant Pearl Meyer, more than 13% of employers chose to give their employees new job titles instead of monetary rewards. As per The Wall Street Journal, this figure is a significant increase from the 8% reported in 2018.
Additionally, a survey conducted by benefits-advisory firm Mercer, involving 900 companies, indicated a shift in employer behaviour, with fewer organisations allocating their salary budgets for promotion-related salary increases in 2024 compared to the previous year.
This trend is disheartening to many employees, but it also reflects the decreasing bargaining power of the average worker. Dry promotions often become more prevalent during times of economic uncertainty, as companies prioritize cost-cutting measures over employee compensation.
In the past, labour shortages often compelled companies to offer significant raises to retain their employees. Dry promotions are emerging at a time when some employers are reallocating the responsibilities of laid-off workers to current staff members without adjusting their compensation accordingly.
Why dry promotion?
Sometimes companies just don’t have the budget for raises for everyone who deserves one. They might see a dry promotion as a way to recognize your good work without adding expenses. In a situation where there have been layoffs or staff reductions, existing employees might be expected to take on the work of those who have left. A dry promotion can result in additional responsibility without any compensation to reflect the increased workload.
In the past, companies dealing with labor shortages frequently felt pressured to provide significant salary increases to retain their employees. During a time when certain employers are reallocating the duties of laid-off workers to current staff members without raising their compensation, the dry promotion trend is emerging.
A new title may seem good, but employees are wary of increased responsibilities without a raise. Social media is abuzz with discussions about ‘dry’ promotions, and some employees feel they are being taken advantage of.
New strategy to retain talent
According to the report, companies are increasingly using job titles in their strategies to retain talent.
The increasing trend of ‘dry promotion’ can also be attributed to the increasing adoption of Artificial Intelligence (AI), which is impacting organizational structure, change management, and employees’ roles.
“Thirty per cent of respondents have added AI as an additional area of responsibility to an existing executive role, and 9 per cent have either promoted an executive from within or made an external hire. Roughly one-third (32 per cent) are taking a decentralised approach to AI oversight, indicating they expect AI efforts will be led by various leaders across multiple functions in the organization,” said Pearl Meyer in a separate report this month.
