That new job comes with a bigger title, and no raise. What’s your move?
Congratulations, you’ve just been promoted. Wait, you were expecting a raise with that big, new job? So-called dry promotions—the kind that bring bigger responsibilities without a pay increase—present a career dilemma. And some data suggest they’re becoming more common as companies manage their talent with tighter budgets.
\ Businesses are devoting less of their 2024 salary budgets for raises tied to promotions than last year, according to benefits-advisory firm Mercer’s recent survey of more than 900 companies. Meanwhile, 13% of employers recently polled by compensation consultants Pearl Meyer said they are relying on new job titles to reward employees when money for raises was limited, up from 8% in 2018. Consider no-raise promotions a sign of workers’ ebbing leverage now that labor shortages have eased and companies are cutting costs where they can.
Dry promotions tend to climb in times of economic uncertainty, executives and pay consultants say. Companies doled out hefty raises just to keep hold of workers when labor was in shorter supply. Now, some managers are shifting the duties of laid-off workers to remaining staff without a commensurate bump in pay.
“Giving away titles is free, giving away money is not," said Tom McMullen, a senior client partner at global organizational consulting firm Korn Ferry. The question of whether to accept a raise-free promotion is a thorny one. Agreeing to a bigger job without a financial reward can result in burnout and resentment and stall your climb up the pay scale.
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