How to Handle a No-Raise Promotion

Such moves are becoming more common, forcing employees to think fast on next steps.

It seems like a backhanded compliment. Your boss tells you he’s giving you a new title and more responsibilities because you’ve done a great job. Then comes the bad news: there’s no extra money that comes with the promotion.

Firms may be rewarding staffers who have gone the extra mile during the coronavirus outbreak with a new title or role. But more money is another story. With revenues still tight, more than one in five CEOs foresee no increase in their employees’ wages over the next 12 months. Another 5% said they may even reduce wages, according to the most recent executive survey by The Conference Board. At the same time, more than three-quarters of leaders tell Korn Ferry the pandemic hasn’t stopped their company’s promotion cycles. Even organizations that are still paying more to promoted employees may be offering smaller pay bumps than those given to people promoted in 2019. “There’s probably going to be a big disconnect for the employee: ‘What, I’m getting a promotion but there’s no money involved?’” says Tom McMullen, a Korn Ferry senior client partner and a leader of Korn Ferry’s North America Total Rewards expertise group.

As it turns out, promotions with no net increase in pay aren’t as rare as one might expect. Smaller companies, where many people have multiple roles, don’t always equate promotions with pay bumps. It also happens during many corporate reorganizations or mergers. But more commonly, especially in today’s time of crisis, staffers are getting management roles without pay hikes, creating a major quandary and anxiety for them. Here are five ways experts say employees can handle it.

Ask yourself, “What is success?”

To some degree, nearly everyone ties some of their sense of worth to their paychecks. But success isn’t always measured in dollars. The onus is on the employee to figure out what else they value professionally, says David Meintrup, a career coach at Korn Ferry Advance. A promotion might not bring about more money, but it could give an employee a chance to work on high-level projects, manage people, or collaborate more directly with clients. “That mix of new job responsibilities could lead to higher job satisfaction,” Meintrup says.

Employees shouldn’t assume that their personal answer to “What is success?” is the same now as it was before the pandemic. Difficult times like these can often change people’s priorities, McMullen says.

Another question that employees should ask themselves is, “What’s my five-year goal?” The change in responsibilities, along with any new skills the employee learns on the new job, could open up considerably more lucrative roles down the line, either at the current employer or elsewhere. At a minimum, the new title and responsibilities look good on a resume.

Then ask your boss some questions.

Individual employees need to find out whether their promotion-without-raise situation is unique to them, and they can start finding that out by talking to their boss. Experts suggest asking about specific policies regarding raises and promotions. It may turn out that the boss is following one playbook while the company has another playbook.

The boss might not have the answers the employee wants to hear, but learning about them can help improve decision-making going forward. It will also help the employee see how much equality there is on the job. “Employees want to feel that there’s some procedural justice. If they see everyone else getting zero, most employees will be frustrated but otherwise feel OK,” McMullen says. Only when an individual, newly promoted employee gets nothing while others in a similar position get pay bumps will someone get angry, justifiably.

Lobby for a salary review in six months.

“There’s always room to ask, ‘Can we revisit this in six months when things might improve?’” Meintrup says. Indeed, now would actually be a particularly opportune time to use that strategy. Nearly two-thirds of CEOs told The Conference Board that they think economic conditions will continue to improve, and about one-third of them even said they expect their firm to add jobs over the next year.

That will also give the newly promoted employee a few months to get settled and begin excelling in their new role. Assuming they have done well, not only might their value have increased in the eyes of their existing employer, but it might make them more attractive to other, higher-paying organizations.

Bargain for other benefits.

“The manager has many things in the tool kit besides financial compensation,” McMullen says. So even if money is tight for raises and bonuses, bosses might be able to offer newly promoted employees more flexibility in time off, training opportunities, or meaningful project work..

A popular new perk could be remote work. Yes, millions of people are doing that now because of the pandemic, but eventually, offices will reopen. A newly promoted employee may, in lieu of a raise, be able to create a more permanent remote-work arrangement, Meintrup says.

Turn it down.

Promotions aren’t set in stone, they’re an opportunity—an opportunity that employees can always turn down, McMullen says. New roles, even ones that come with raises, can result in the loss of flexibility, increased workloads and stress, moving away from respected colleagues, or other things an employee values. If the negatives outweigh the positives, then it’s OK for an employee to just say no. “‘You’re asking me to do complex, higher-level work and more work while you have no intention of increasing my pay? No thank you,’” McMullen says.

However, experts say don’t say no on the hopes that it will make an employer offer the promotion again, only next time with a raise. That, experts say, rarely happens.