Now that performance review season is over for most companies, news about promotions and salary increases should start making the rounds soon.
Traditionally, a promotion is expected to come with a raise. But recently, some companies are beginning to offer what are called “dry promotions” — or a promotion into a position with more responsibilities but without more pay.
Why are dry promotions becoming more common right now, and should you accept if one is offered?
From the employer’s perspective, offering a promotion without a raise is a way to recognize and reward talent while saving money. The economy continues to be in flux and inflation remains stubbornly high. Additionally, as the unemployment rate remains at a steady low rate, the leverage that workers previously had is beginning to evaporate. These factors are combining to make dry promotions an attractive avenue for employers.
For workers, a dry promotion isn’t necessarily as bad as it can sound. It can offer professional development opportunities, skill development, and leadership experience. Gaining more exposure to the business is a valuable opportunity that comes with most promotions. This can take the form of face time with high-level decision makers, influence over policies and procedures, and greater acknowledgement from others of the importance of the position — and the person in it.
Of course, the downside to a dry promotion is the lack of salary increase. This can be a serious sticking point and could be significant enough for an employee to turn down the promotion all together.
If a raise is not possible — for example, if the organization is contracting or otherwise cutting spending — management should be transparent about the situation and offer a plan to increase salary at some point to meet the demands of the job.
But a significant amount of frustration can be avoided by speaking in advance about career direction. Frequent requests for feedback, clear expectations of roles and responsibilities, and comprehensive performance assessments should provide clarity about what growth looks like, and should take the surprise — and disappointment — out of a dry promotion.
So, should you accept a promotion without a raise?
The answer is, it depends. Building the skills and forming the relationships that come with a larger role can be invaluable and set the foundation for future success. But if there is no compensation plan or an eye towards the future, it might be better to pass. Every role is unique. But if you are offered a “dry promotion,” there’s no need to run for the exits — at least not yet.
