Skills development seen as a way to ease dissatisfaction
A new survey by Frog Recruitment has revealed the growing dissatisfaction among New Zealand workers who receive promotions without corresponding pay rises, a practice often referred to as "dry promotions."
According to the survey, which polled 970 workers, almost half (43%) reported that they or a colleague had experienced such a promotion in the past year.
The lack of financial recognition has led to frustration, with 31% of respondents reporting feelings of resentment and another 31% indicating that they were demotivated as a result.
The findings come at a time when many businesses are facing economic pressures, and employees are grappling with rising costs of living.
Despite these challenges, 87% of those surveyed rejected "budget constraints" as a valid reason for the lack of pay increases.
Shannon Barlow, managing director of Frog Recruitment, said there are still other ways for organisations to satisfy employees who have been promoted.
"Career progression, training and development are important to employees, but unfortunately many employers have been slow to recognise this. You may not be in a position to make pay increases this year, but dry promotions could be seen as a way to start developing employees in the interim," Barlow said in a statement.
In fact, the report found that 42% of respondents think skills development would make a dry promotion worthwhile, while 26% indicated they would tolerate the situation as long as it led to a future pay rise.
However, Barlow cautioned that dry promotions could put employers at risk of losing staff.
"Sure, you might be able to push back the pay rise by a few months or years, but talent will eventually leave if they don't feel like their salary is at market level," she said.
Frog Recruitment's poll has indicated that dry promotions could have long-term consequences for employee retention.
More than one in five (21%) respondents said they believed that dry promotions increased the likelihood of staff leaving their jobs.
But would employees really quit? Barlow warned that doing this may not be the best option.
"In the current market, negotiating some other kind of benefit might be the best option as it can be extremely hard to secure work," Barlow said. "Think of it as a long-term investment in a future pay rise. Ultimately, each individual needs to consider what's right for them, but leaving the company may not always be the best bet."
