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More Companies Offering Promotions Without Pay Raise

August 27, 2018

Getting a promotion at work should be a time to celebrate.  

Your bosses think your worthy enough to handle more responsibility and are trusted to take on a new role.  Plus, the pay increase is always nice.  Well, it used to be that way at least.  More and more companies these days are handing out promotions to their employees without increasing their salary.  In 2011, 22% of HR managers said their company gives new titles without a raise. Today, 39% do, according to new research from the staffing firm OfficeTeam.

There are a million theories as to why this trend is increasing.  One being that the Great Recession produced a lot more low-wage jobs, which has driven down wage growth from a macro perspective.  Ah yes exactly the....macro perspective.  Also, more bumps in perks and benefits for executives and higher-level employees, including health insurance,transit subsidies, free meals or more paid time off have decreased the amount of salary bumps being handed out.  Of the 72% of companies that will earn tax savings from December's Tax Cuts & Jobs Act, only 4% are directing some of those savings into salary increase budgets.

People are still finding ways to increase their salaries, however.  Notably, they quit the job not offering them anything and move somewhere that is.  People are quitting their jobs at the highest rate in 17 years, according to the Wall Street Journal, and those that do switch companies are earning 48% more than those who stay.

Via Business Insider