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Newly promoted employees are more likely to look for work elsewhere. How can you make a promotion boost employee loyalty rather than threaten it?
As employers change their focus away from attraction of new staff to retention of existing ones, one way employers will likely try to hold onto their top performers is through offering promotions. As unearthed in a recent report from ADP Research Institute (ADPRI), however, promotions can be a double-edged sword when it comes to employee retention.
In reference to that same report, Sarah Green Carmichael, in an article for Bloomberg, said the following: “Employers should take this as a splash of cold water in the face – they’re getting promotions wrong, and losing the very people they most want to keep.”
Let’s unpack the relationship between promotions and employee retention before considering how to make promotions serve both parties.
A double-edged sword
Within a month after receiving their first promotion, said ADPRI, employees were 29 per cent more likely to leave their employers. Had they not been promoted, only 18 per cent of those employees would have moved on.
In other words, the report established a two-thirds increase in the likelihood of employee turnover in the immediate period after a promotion. Only by the six-month mark after a promotion does the risk divide narrow such that the promoted employee is no longer at heightened risk of leaving.
A more marketable job title
A new title means stronger job opportunities and a leg up in the job marketplace. Indeed, job switching tends to be far more lucrative in terms of salary increases for employees than internal pay rises.
In 2021, for instance, half of workers who switched employers saw a pay increase of nearly 10 per cent, while the median worker who stayed put saw an inflation-adjusted loss of almost 2 per cent. The temptation to job switch after a promotion is only natural.
“One would think that promoting excellent workers would only increase their motivation and commitment – and reduce their risk of leaving. Think again,” said ADPRI.
“When someone gets their first promotion, the recognition might boost their commitment to their employer for a while. But it might also improve their confidence in their job prospects.”
Poor promotional practices
However, the increased risk of turnover after a promotion might suggest that employers aren’t doing enough to help newly promoted staff to grow into their new roles.
As noted by Ms Green Carmichael: “The study’s explanation leans heavily on the idea that getting a promotion increases a person’s perceived value – a shiny new title could lead to more calls from recruiters. That’s certainly a possibility. But I wonder if the kinetic force expelling newly promoted workers is less of a pull and more of a push.
“In other words, a recruiter’s siren song is less to blame than the frustrating promotion practices at many companies.”
To this point, the ADPRI report found that promotions that required longer preparation saw a lower turnover risk, both immediately and further down the line. This could suggest that promotions, without appropriate training or preparation, can disproportionately cause employees to look elsewhere, while adequate investment can turn promotions into a retention-booster.
“Companies also bungle the promotion process when new managerial responsibilities are unaccompanied by additional training. Yet a majority of new managers don’t receive leadership training until they have been doing the job for years,” said Ms Green Carmichael.
The ADPRI report found that managers are more likely than individual contributors to find new work after a promotion, suggesting more could be done to support them. According to Rose Hollister, writing in the Harvard Business Review, managers need to be supported through active training in three key areas: technical learning (what it will take to succeed in the job), cultural learning (the behavioural norms in the workplace), and political learning (how decisions are made).
“New leaders are drinking from a proverbial fire hose,” said Ms Hollister. “Being in a new role can be difficult. Offering help, checking in, keeping them in the loop, and offering a listening ear can be very helpful to someone who is working on learning and trying to make progress at the same time.”
Alternatively, as suggested by Ms Green Carmichael, employers are waiting too long to offer promotions, so by the time the offer is made, the employee is ready to vote with their feet.
“Too many organisations only green light a step up when an employee has a written offer from a rival. This doesn’t inspire loyalty,” Ms Green Carmichael said.
RELATED TERMS
A company's assistance to an individual's professional development, particularly when the employee moves to a new role or project within the business, is known as career development. The organization's HR business partners or managers, as well as HR services like learning and development, talent management, or recruiting, frequently support this through coaching, mentorship, skill development, networking, and career planning.
Training is the process of enhancing a worker's knowledge and abilities to do a certain profession. It aims to enhance trainees' work behaviour and performance on the job.
Turnover in human resources refers to the process of replacing an employee with a new hire. Termination, retirement, death, interagency transfers, and resignations are just a few examples of how organisations and workers may part ways.
Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
