Senior Client Partner
Thanks for the Promotion: I’m Leaving.
It’s long been the unanimous consensus at firms: if an employee performs well, try to promote them—both to reward them and keep them at the firm.
But a new study turns that thinking on its head, suggesting that a promotion may well increase the risk an employee will quit. That’s according to payroll-services company ADP, which analyzed the job histories of more than 1.2 million people from 2019 to 2022. Using factors such as managerial level, job requirements, and months since hire, the study found that 29% of employees left their companies within a month of receiving their first promotion. Moreover, according to the study, only 18% of those employees would have left had they not been promoted. Put another way, a promotion led to a 67% increase in the chances an employee would leave the company.
Experts say the data suggests that a promotion improves an employee’s marketability. It may also indicate that employees—to the surprise of many leaders—no longer view a promotion as a reward unto itself and may even see it as less attractive than the job they’re being promoted from.
Companies bear at least some of the responsibility for this change in perception, says Tom McMullen, leader of the North America Total Rewards practice at Korn Ferry. During the pandemic (the timeframe covered by the study), promotions often came with more responsibility, less flexibility, and lower pay increases than usual, he says. “Purse strings were tight during that time, so those receiving promotions may have seen smaller raises,” McMullen observes.
In fact, in a recent rewards and benefits study undertaken for a client, Korn Ferry found that employees viewed being promoted with no accompanying increase in pay—a common practice during the pandemic—as “borderline negative,” says Maria Amato, global leader of the Employee Experience and EVP Solutions practice at Korn Ferry.
Bradford Frank, senior client partner in the Global Technology practice at Korn Ferry, cites another factor behind the departures: by the time the firm gets around to issuing a promotion, he says, the affected employee is ready to move on. According to the ADP study, only 4.5% of employees are promoted within two years of being hired. Promotions, says Frank, are often a function of a manager’s “realizing someone is looking to leave and that they can’t afford to lose them, so they promote them as a way to keep them.”
That used to be an effective tactic, but not anymore. The dynamics of the job market and the ongoing battle for top talent means employees have more options. To be sure, experts caution that the study results could be skewed due to the higher-than-normal level of talent turnover in recent years. As people reevaluate what they want out of a career, they may be more willing to leverage an internal promotion into another opportunity elsewhere offering better pay or work-life balance. “Top talent often looks for external opportunities concurrently with internal ones,” says Dennis Deans, vice president of global human resources at Korn Ferry.
As the job market begins to normalize, experts expect the rate of post-promotion departures to decline as well. In the meantime, experts say, managers and leaders should do a better job of recognizing and rewarding employees for performance outside of and in between promotion cycles. Firms can also ensure that employees being promoted, especially to the managerial ranks, receive adequate training and support. According to the ADP study, most employees who leave a company following a promotion do so within six months of the promotion, suggesting that “people who are given more responsibility without adequate preparation, compensation, or resources could become more likely to quit.”
Or, as McMullen says, instead of promoting employees into the fire, leaders need to do a better job of “understanding the needs of top talent and what constitutes meaningful work and rewards to them.”
Learn more about Korn Ferry’s Total Rewards capabilities.