Should You Accept a Promotion Without a Raise?
Congratulations! You’ve earned a promotion! Oh, um, by the way, we’re not going to pay you another nickel, even as you take on greater responsibilities, work longer hours and add more to the company’s bottom line. Such a deal!
Yes, this jarring scenario has an air of unreality about it. "It's hard to believe that something like this is happening," says Robert Hosking, executive director of staffing firm OfficeTeam. But with so many workers running scared these days, promotion-without-a-raise is a gambit some are forced to reckon with.
"It's not common; it's an exception," says Lynne Sarikas, director of the MBA Career Center at Northeastern University's College of Business Administration. "When it does happen, people are caught off-guard."
If a promotion sans pay raise causes you to question your company’s fiscal health, you may have good reason to. Or you may be failing to recognize the extraordinary power that employers wield in the volatile labor market of the 2010s.
Confronting such an offer 10 years ago, “you would be suspicious of the company's financial position," says Wendy Komac, a career coach in Cleveland. "Now you accept the offer, then you get to prove you can do the job, then you get the money."
Still, taking a promotion without a raise might be the right thing to do. “When I accepted significant additional responsibility and a promotion without an immediate salary increase, the longer term salary increase ended up far outweighing what I would have received at the time of the promotion,” Sarikas says. “And it added highly valuable experience to my resume.”
How can you be prepared for the possibility of a promotion offered without a pay increase? Here are three key tactics for improving the likelihood of a positive career outcome.
1. Find Out Why You’re Not Getting a Raise
First, don't allow the shock and awe of a cashless promotion stun you into silence. Speak up and find out the why behind the zilch.
After "sorry, we just can't afford to pay you more right now," perhaps the most frequent reason employers give is that they're giving you a stretch assignment. Says Sarikas: "The hiring manager may say, 'If I were going to fill this job from the outside, I would look for the complete skill set. You're great, but you only have part of it.'"
Employers confirm this tactic. “At times I’ve said, ‘OK, you’re a risk because you’re a little green, but you’ve got a lot of talent, so I’ll promote you from director to senior director,’" says Greg Dollarhyde, CEO of the Veggie Grill restaurant chain and a serial entrepreneur.
In this situation, it's up to you to set the stage for a pay raise in the foreseeable future. "Metrics for how performance tracks with increasing compensation should be outlined -- in writing," Komac says.
2. Make Sure Career Development Is Built In
If your promotion comes with the caveat that you're not fully qualified for it, ask for the resources necessary to fill the gap. If your manager asserts that you will simply sink or swim in the elevated position, you might conclude that he doesn't know how to manage people.
Speak with your boss or human resources representative about your need for external training, an inside mentor or both. “Mentoring can be really effective if there are regularly scheduled sessions, like a breakfast meeting every three weeks,” Dollarhyde says.
But don't let your boss get away with a dismissive assertion that she'll be your mentor. "The mentor should be someone in the organization who's more senior but not in a reporting relationship,” Sarikas says.
External training can also help you make the stretch to a higher position, whether by boosting your management skills or expanding your subject-matter expertise. Don't hesitate to ask your employer to pay for relevant training. "The training budget sits separate from the pool of money that goes to raises," Komac says.
3. Find Out What’s in It for You
Another caveat before you sign on for an unfunded promotion: Make sure you're not agreeing to simply run faster on the treadmill. “Sit down with the employer, ask precisely what the new job is and see if it sounds like what you’re already doing,” Hosking says.
And don't let economic anxiety deter you from pursuing your own best career interests. "You need to ask, 'What's in the promotion for me?'" Sarikas says.
So speak with your manager about shaping the new assignment to serve your career arc as well as the organization's immediate needs. "You have to think about how you're going to optimize your new role for yourself," Komac says.