Survey respondents said career and skill development were good reasons they could hold off expectations of a pay rise - in the short term. Photo: Unsplash
'Dry promotions' are becoming increasingly common, a recruitment agent says - with employees receiving a new job title and more responsibilities, but no pay rise.
Frog Recruitment managing director Shannon Barlow told Midday Report that she was seeing the practice increasingly more often, where more was being asked of employees but without the paycheck that usually came with it.
Dry promotion, as the practice is known, was a reflection of the economic climate, with many employers not in a position to increase wages at the moment, she said.
It had some benefits, but was not a long term fix, and employers should use it with caution.
Shannon Barlow Photo: Supplied/ Frog Recruitment
"I think it's really important for employers to be transparent - so to set it up and set those clear expectations around timing and conditions for when conditions are going to change," Barlow said.
"Because you can't just take advantage of that situation forever, or you're likely to lose the employees."
The person taking on extra responsibilities should also be clear with their employer about what they want out of it, so it could be a win-win situation for both parties, she said.
If a pay rise was not on the cards in the near future, businesses could offer clear career opportunities, training, development, and flexible working arrangements, to offset the extra work.
Dry promotions can delay expectations of a pay rise, but won't replace it
Barlow highlighted that the arrangement wasn't a free lunch for employers, employees would still be calculating their worth.
In the short term it was important to ensure employees benefit from the immediate arrangement, and in the long term, the pay rise would likely still be expected - otherwise companies could find it harder to hang onto their staff.
Frog Recruitment polled 970 workers about dry recruitment. They found that in the last 12 months, 43 percent of respondents had either been promoted with no salary increase themselves, or had it happen to a coworker.
About a third of the respondents said knowing that had left them feeling resentful or demotivated, and about 20 percent said it increased the likelihood of staff turnover.
Barlow said at the moment, there is a pattern of employees prioritising the value of career opportunities and training and development first, with work-life balance and flexible working conditions further down their list.
Their survey found 42 percent of employees said skill development would make a dry promotion worthwhile, while 26 percent said they would be happy so long as there was a pay rise coming.
"In other words, increasing someone's responsibilities without added remuneration won't erase the expectation for a future salary catch up," she said.
And a resounding 87 percent of employees who responded said they did not see 'budget constraints' as a valid reason to not give a pay rise.
"There's going to be a lot of employers who aren't in a position to offer those raises at the moment, and also [for] employees - job security's going to be a number one factor at the moment," Barlow said.
"So it works for now, but I don't think it's a long term fix ... It's not ideal, because it puts employers at risk of losing staff.
"Sure, you might be able to push back the pay rise by a few months or years, but talent will eventually leave if they don't feel like their salary is at market level."
