Dry promotions: Definition, considerations, and guidelines for employers

Getting a promotion is an exciting event for employees. Their hard work has paid off and they are being recognized by their employer. However, some of that excitement is probably due to the pay raise that they expect will come with the promotion. But sometimes employers offer promotions without an increase in pay, a growing phenomenon called dry promotions.

If you’re not familiar with the term or are unsure whether your company is guilty of using dry promotions in a manner that can hurt employee morale, read up on the definition of the term below and explore some common examples of dry promotions.

What is a dry promotion?

A dry promotion occurs when you give an employee additional responsibilities, and often a title change, without an increase in their pay. This type of promotion saves the company money, but can be frustrating for employees who understandably expect a higher salary for their hard work in their new role. Sometimes they are used as an interim solution to address unexpected business needs or as a stepping stone when an employee wants to take on more responsibility or the company is seeking to prepare them for a larger promotion that will come with a salary increase.

Ideally, dry promotions are a transparent process where the employee is aware of the fact that the added responsibilities will not come with a salary increase and they have the opportunity to accept or decline the promotion. Employers should give employees a clear overview of their new job description and allow the employee to take time to think about the decision, just as you would with any promotional opportunity. Unfortunately, many employers thrust dry promotions onto employees without their input, which will typically lead to that employee seeking employment opportunities elsewhere.

Dry promotion vs a lateral move

In a dry promotion, employees are taking on added responsibilities in addition to their existing job duties or ascending to a higher role without added pay. A lateral transfer where an employee is switching roles within the company and trading their current duties for new duties is not a dry promotion.

get_employment_law_answers_for_hr_at_LEAP

Lateral moves are often requested by the employee based on their career goals or work preferences, or may be initiated by the employer based on changes in business needs. They generally have equivalent pay and are at the same level within the organization’s hierarchy. They do come with a new title and possibly different work hours, but the overall work-life balance and level of duties should be about the same.

Quiet promotions vs dry promotions

A quiet promotion occurs when you increase an employee’s responsibilities without updating their job title, formally acknowledging it as a promotion, or providing a salary increase. Quiet promotions are often a gradual form of dry promotion where the employee’s role keeps expanding to add new responsibilities, but a pay raise or title increase is not provided. The employee may even gradually assume some supervisory responsibilities without receiving an official promotion to management.

This is especially common in smaller businesses where official management roles may be limited, or at start-ups where employees are expected to wear many hats and job roles are less clearly defined. Quiet promotions, like most dry promotions, typically don’t work long-term as the employee will start to feel underappreciated if their pay is not adjusted to match their responsibilities and output.

The downsides of dry promotions

Dry promotions may seem like a solid way to save money and better utilize your existing staff, but they usually come at a cost. That cost is typically decreased employee engagement and increased employee turnover.

One thing to keep in mind is that switching employers is typically the best way for an employee to obtain a large increase in pay. When you increase the employee’s responsibilities and give them a higher-level job title without added pay, you are giving them a reason to leave the company in search of fair compensation and making it easier for them to find a better-paying job at a competing employer by building their resume.

When and why do companies give employees dry promotions?

Explore some common circumstances where dry promotions occur and reasons that an employer may decide to use this tactic over providing a traditional promotion with a raise.

Financial limitations

The most obvious reason is that the company wants to save money. They are looking to get more work out of the employee without providing a pay raise. This isn’t always malicious on the employer’s part. In some cases, the employer may simply not have the resources to raise the employee’s pay right away.

Dry promotions can often occur at start-ups or nonprofits because the organization can’t offer a full promotion with higher wages until they receive their next round of funding. The dry promotion or extra responsibilities may come with a verbal agreement that the employees’ pay will be reevaluated after the next funding round. The key here is to keep your word, set a clear timeline, and provide a salary increase as soon as there is room in the budget.

It’s worth noting that this arrangement is typically only agreeable to employees when they are personally invested in the organization’s growth and success. For example, nonprofit employees often understand that working in the nonprofit sector will come with lower pay and short-staffed teams compared to for-profit businesses, but they feel connected to the organization’s mission and are willing to work hard regardless of those challenges. On the other hand, start-up employees often receive some form of equity in the company, so they have a financial incentive beyond their salary to help the company succeed in its early years. Employees at large corporations will not be as understanding of dry promotions and delays in pay raises.

Providing career growth opportunities

Dry promotions can sometimes work somewhat in the employee’s favor if that employee is eager to move up the ladder and take on more responsibilities as part of their career development. Most employers pursue promotions for the money, but some early career professionals are willing to take on higher-level job duties to gain more experience and build their resumes.

Interim leadership roles

One scenario that often results in dry promotions is when a department head quits and the role is not filled by their end date. Hiring for higher-level roles often involves several interviews, and if the candidate that you choose is currently employed, they’ll need to give notice as well. As a result, the team may be without a manager for a month or more. In that time, someone is typically asked to step up temporarily or a natural leader emerges within the team to fill in. Sometimes that person ends up as an interim leader for quite a long time if the company is not able to fill the role due to budget issues, difficulty finding the right candidate, or timing delays (such as companies choosing to wait until after the holiday season to hire).

Companies often don’t provide a pay increase for interim department leaders, resulting in a dry promotion. This can cause frustration, but employees are often willing to go along with it if they are being considered for the permanent management role. It does give them a chance to prove themselves in the role and gain visibility with high-level leaders and decision-makers in the organization.

Filling the employee’s work hours

It’s not uncommon for businesses, particularly small businesses, to hire a full-time employee and then realize that there isn’t quite 40 hours of work for them to do within the current scope of their role. It can be hard to estimate how long tasks will take and there can be fluctuations in workloads throughout the year, so it’s easy to misjudge how many hours a certain set of responsibilities will fill each week. In this case, you may need to expand their responsibilities and even adjust their job title to fill their designated work hours.

This often results in splitting the employee between multiple departments or training them on a few higher-level tasks to take something off of busy team members’ plates. This is one area where dry promotions can be mutually beneficial, as the employee would likely rather expand their duties than take a reduction in hours (and thus weekly pay). Just be ready to consider these enhanced contributions during the employee’s next performance review, as

Tips for navigating dry promotions as an employer

If you are going to offer dry promotions, here are some tips to use them effectively and minimize any negative effects on employee satisfaction.

Use dry promotions as a temporary solution and communicate a timeline

One thing you likely noticed in the above examples, is that dry promotions tend to be best used as an interim solution. They work if you’re waiting on funding or preparing an employee for a proper vertical promotion (with a pay raise). You shouldn’t be counting on this as a long-term solution.

Set a timeline and communicate it to the employee when possible. If you know you’ll have more room in the budget in the next fiscal year, let them know that you appreciate their work and will work on increasing their compensation in the new year. If you’ve added on responsibilities in an attempt to help an individual contributor build management skills and experience before their department lead retires in a few months, be ready to give them a proper pay raise when they’ve proved themselves and are ready to take over.

Explore other perks

Dry promotions often occur due to financial constraints. Either the company does not have the funds to provide a raise or higher-level leadership won’t sign off on a raise even though mid-level leaders acknowledge that an employee is doing work that far exceeds their job description. If a raise is not in the cards right now, it’s worth exploring other perks that can make the dry promotion worthwhile for the employee. Can you provide more PTO and an improved work-life balance? Are there perks like remote work or flexible scheduling that you can offer? Some perks can help offset the lack of compensation increases.

Support career fevelopment

Consider how you can support the employee’s growth and career advancement. If you can’t pay them what they’re worth, be realistic and understand that they won’t stick around for very long. But if you’re able to give them something that will make them more competitive in their future job search when they do decide to leave, they may be willing to stick around a bit longer.

Are there meaningful training and networking opportunities that you can provide? Is there a project that they’d like to get involved with or a skill that they’d like to add to their resume? Talk to the employee about their desired career path and work together to craft a fitting job title for their expanded role and identify development opportunities that will help them in their career journey. If all you can provide is a dry promotion and some career development, accept that this role is going to be a stepping stone for the employee and try to find a way to make it as mutually beneficial as possible for the time being.

Alleviate stress wherever possible

The biggest issue with dry promotions is typically that they add stress without any monetary reward. If you aren’t going to offer more money, do your best to limit how much stress you are adding. Look for things that the employee can delegate to other team members, and provide as much support as possible to help them navigate their new role.

Also keep in mind that dry promotions shouldn’t come with more hours. Salaried employees don’t get paid overtime, but positions that require more than 40 hours typically come with higher salaries. Keep a close eye on how much they are working and provide comp time (aka extra paid time off to make up for the extra hours worked) to help them recover after busy weeks. If managers or high-level individual contributors normally stay late or work on weekends to finish projects, you should not be expecting someone that you dry promoted to do the same. That will just lead to burnout and a high level of resentment.

Think about the situation from the employee’s perspective

Start-up founders and small business owners tend to be guilty of overusing dry promotions because they are looking at the situation from their own perspective. Being a business owner requires you to wear a million different hats and dedicate countless hours to the business. Therefore, taking on some added responsibilities or putting in a few extra hours each week to support the business’ growth may not seem like a big ask to you, but from the employee’s perspective, it probably does sound like an unreasonable request if extra compensation is not involved. Remember that while this company is your passion, it’s simply their job and that’s okay. You can’t expect your employees to be as invested in your business as you are.