A dry promotion refers to a promotion without any hike in salary.
The dynamic job market has experienced numerous trends over the years globally. The recent addition is dry promotion!
Ever thought of a situation when you got promoted without any rise in salary? That's pathetic, right? Exactly, that's what happening worldwide. Basically, one person is getting a new recognition, higher workload, bigger responsibilities, yet the paycheck remains the same as before. Many companies are seeing this as a way to motivate employees. Obviously, this trend is not well-received by employers. But, why is this happening?
In this article, we will discuss about reasons behind sudden rise in dry promotion.
As per report by compensation consultant Pearl Meyer: “Over 13% of employers are giving out new titles without the usual bump in pay, compared to just 8% in 2018.”
During the surgery, it was further revealed: “A growing number of employers are allocating a smaller portion of their 2024 salary budgets for promotion-driven salary increases compared to the previous year, 2023.”
Since the last year, nearly 250,000 employees got laid off globally. Over 50,000 employees lost job fom tech giants like Amazon, Facebook, Microsoft, Tesla, and Google.
As a result, employees are feeling undervalued while overworking with increased responsibilities.
Global Economic Slowdown: Undoubtedly, post-pandemic world is different and difficult to survive due to decrease in goods trade.
“The global economy is set to rack up a scary record by the end of 2024 —the slowest half-decade of GDP growth in 30 years," as per the World Bank’s latest Global Economic Prospects report.
Due to global economic slowdown, companies are focusing on different cost-cutting measures. This has a large impact from layoffs to dry promotion. Sometimes, companies are running out of fund to provide salary to employees. Thua, many companies are not providing any salary hike, and only promising for a better year ahead.
Technological Advancements: This is another major reason for increasing trend of dry promotion. As automation, artificial intelligence (AI) become more useful, companies are looking for alternatives. Because automation is replacing manual labor and few jobs are becoming obsolete. Even, some companies are threatening their employees to accept dry promotion. With a fear of losing job, many employees are compelled to agree to dry promotion.
Overhiring: One of the major reasons behind dry promotion or layoffs are over hiring before pandemic. Even during pandemic, when e-commerce sector grew rapidly, many tech giants hired more than demand. One report suggested, Meta doubled its employee count in March 2020. This led to a rise in layoffs in 2022. The company has laid off over 11000 employees by September, 2022.
Silicon Valley Bank Collapse: Tech industry faced a huge trouble as Silicon Valley Bank collapsed in March 2023. This les to a bad time for Silicon Valley Bank-funded companies globally.
“The title is not the recognition. The salary increase is the recognition. The only way to make big jumps in salary and at market value is to go somewhere that'll pay you more. If you stay where you are, they'll only incrementally give you pay raises...then after 5 or 6 years, you are below market rate,” explained one reddit user.
We must accept the fact that the future is very much scary!
