You’ve earned a promotion! Hold up – it seems that you won’t gain a raise from this change. Do you take this promotion, or do you hold off until you get that raise? Or should you be asking for something else? My Career Matters group members stressed that compensation is not the sole factor when determining whether they accepted a promotion. Gwen Moran, from Fast Company stated, “According to a June 2018 survey from Menlo Park, California-based OfficeTeam, 39% of HR managers said it’s common for their company to award promotions without pay increases, a 17-point jump from 2011. And 64% of workers reported they’d be willing to accept an advanced title that doesn’t include a raise, up from 55% in 2011” (https://www.fastcompany.com/40586452/should-you-ever-accept-a-promotion-without-a-raise). So, what’s up with this change?
Lisa Vezzetti, Talent Acquisitions Manager at Crain Communications and MCM Member, stated, “I think it’s all; about what that individual values and finds important at that specific point in time. If a target role/level was what I had as a goal, then I would take a role that moved me closer to it no matter the pay. If goals were more physical and dependent upon compensation level, I wouldn’t make the move.” Lisa Vezzetti makes a point that seems to be reinforcing the current trend.
Fast Company’s Gwen Moran stated, “Money is maybe not as important to them as it was five years ago. Certainly it’s important, but on the priority scale for individuals, it’s their development and that ability to show career progression that’s more important” (https://www.fastcompany.com/40586452/should-you-ever-accept-a-promotion-without-a-raise). Is this stemming from a growth of millennials in the workforce? Potentially, millennials want to have more experiences which well help them progress further in the company, and money may not be their main factor in determining their career path. Victor Lipman stated, “Younger employees (ages 18 to 34) were more open than older employees (age 55-plus) to accepting a promotion without a salary increase – 72% versus 53%” (https://www.forbes.com/sites/victorlipman/2018/07/16/would-you-accept-a-promotion-without-a-raise/#25cc3983613e).
Potentially, employees want other benefits besides compensation, as Mackenzie Stephens, a Sustainability Marketing Communications Specialist at Herman Miller (and who was recently interviewed by Paragon Leadership International: https://paragon-lead.com/women-in-leadership-mackenzie-stephens/) and MCM member, stated “If money was not on the table as a means of recognition or promotion, we discussed other forms of recognition like an extra day of vacation or team outing. Personally, I don’t think money always needs to go alongside recognition or a promotion, but there should be some other form of gratitude for a job well done – something other than more work and responsibility.”
Mackenzie Stephens mirrors a point made by Patty McCord, a former Netflix chief talent officer, said, “There are three types of compensation: salary, job title, and equity. Keeping that in mind, is there a better job title you could ask for that could be leveraged into a bigger job next time?” (https://www.careercontessa.com/advice/promotion-no-raise/).
It seems that when we asked this question – it spurred many more questions, as MCM member Mary Anne Wilson, Senior Furniture Advisor at CBRE, stated, “This question leads to several other questions… Is the new role better aligned with your career path? Will the new position provide the recognition needed to get you the next step? Is the promotion in lieu of a pay raise?” Getting the promotion is fantastic, but it begins a series of questions that make the decision not as simple and factoring in a raise in salary may enhance the difficulty.
A raise in salary is no longer the key factor in determining whether you should take the promotion. Based on your individual values or goals – you may want to increase your number of vacation days or perhaps the change is title is the true highlight. For the younger workforce, a raise does not define their experiences in the workforce, and they may desire to expand their role to better understand where they will have the most impact.
So – you got a promotion! Party! But determine what your values are in this transition, and if a raise is part of it for you – go get it!