Corporates around the world have now found a new way to retain talents, and also their salary budgets. The phenomenon, known as “dry promotion”, has emerged in the past few years, which cuts the bargaining power of employees, said experts.
In dry promotion, companies give promotion and additional responsibilities to their employees but the salary remains the same.
According to a new report by compensation consultant Pearl Meyer, there has been a surge in such cases with around 13 percent of the employees getting promotions without any increase in salary. Instances of such promotions have grown from 8 percent in 2018, the report said.
In addition, a rising number of employers are allocating smaller part of their 2024 salary budgets for promotion-related salary hikes compared to what it was in 2023, showed a survey of 900 companies by benefits-advisory firm Mercer.
Unsurprisingly, this has not been well received the employees. Experts say that firms believe this will help motivate the employees, which will secure talents. However, employees can feel undervalued and overworked and start looking for another jobs, experts say.
The past few decades have seen the global corporate arena finding new ways to incentivise their workers to enable the employees to stay with the same company for as long as possible. However, in the past few years companies have struggled with the global economic uncertainty, which has affected the jobs market. Several trends such as hybrid work culture and co-working spaces, especially after the Covid years, and the growth of artificial intelligence have also contributed to companies trying to restructure their work culture.
Moreover, amid a string of layoffs in recent years, existing workers are getting the assigned work of laid-off employees, which is adding to the responsibilities without any pay increase.
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