You’ve put the hard work in and you’re finally up for a big job promotion. Naturally, this comes hand-in-hand with a big, juicy pay rise – right? Right?
Hold off on popping that champagne. Research from recruitment company Robert Half found just 13 per cent of organisations always provide a pay rise off the back of a job promotion.
Survey participants, which included 300 Australian CFOs and finance directors, gave a range of reasons for not automatically handing out pay rises with promotions.
The most common explanation given (39 per cent) was that organisations want to assess an employee’s performance before deciding whether to offer a pay rise.
A lack of financial resources (30 per cent), the employee’s pay being too high for their previous position (10 per cent) and a position needing to be filled urgently (8 per cent) were other reasonings.
What’s more, large companies (17 per cent) are more inclined to always give a pay rise when promoting an employee compared to small and medium-sized organisations (11 per cent).
A promotion is not just a pat on the back for a hard-working employee; unless it’s a lateral move, it will likely come with increased responsibilities and/or a bigger workload. Asking employees to do more without giving them a commensurately heavier pay packet can sap their enthusiasm, according to David Jones, senior managing director of Robert Half’s Asia Pacific branches.
“This in turn can fuel an employee’s desire to leave the organisation,” Jones warns. “Salary increases can be a highly effective staff retention tool, especially when employees are asked to take on additional responsibilities.”
Jones advises organisations clearly communicate to employees the reasons why a pay rise isn’t on the table.
“When employees are promoted without the benefit of a pay rise, it is critical to explain why this is the case. Offer clear guidelines on when their salary will be reviewed together with firm benchmarks that need to be attained in order for the employee to enjoy a salary uptick.”
So, what should you do if you’re offered a job promotion without an accompanying pay rise?
Get the facts straight
Instead of immediately telling your boss just where they can stick their promotion, workplace expert Dan Schawbel suggests asking why a pay rise isn’t on the table and clarifying what it will take to get one. Perhaps you’ll be eligible when regular salary reviews are undertaken.
Think about how the new role could benefit you
The challenge of a more responsible role can deliver long term career benefits, says Robert Half’s David Jones. This can in turn compensate for the lack of an immediate pay rise. Think about how the new title that goes with your job promotion will look to prospective employers – if it will help you land a better job in the near future, it could be worth swallowing the bitter pay rise pill.
Ask for non-cash perks
Jones says employees who are offered a promotion but no pay rise should consider negotiating other non-cash benefits, such as more flexible working hours or additional annual leave.
Record your accomplishments
If you do take the promotion, don’t forget to document your successes so that six months or so down the road you can present a solid case for a pay rise.