A recent article in the BBJ states that workers who get promoted are more likely to leave your company than those who did not — but luckily for managers, there’s a fix for that.
We read this article and found the content very interesting. It illuminated some key findings about managing your workforce AND moving your firm to success. Below is a summary. We encourage you to visit the article and read it in its entirety.
About 29% of workers leave their employer within a month of their first promotion, according to the report. That’s more than the 18% of workers who would have left on their own, without a promotion. Bottom line: A promotion increases the risk an employee will leave by two-thirds.
“One would think that promoting excellent workers would only increase their motivation and commitment — and reduce their risk of leaving,” said Ben Hanowell, director of people analytics research for the ADP Research Institute, in the report. “Think again.”
Why do promoted employees leave?
The ADP data highlights two scenarios at play when it comes to promoted workers leaving. Do employees quit because they are unsupported in their new position and lack the skills needed to thrive? Or, do these promotions make employees more marketable, and allow them to leave for better positions at other companies?
ADP found that workers who were promoted while at jobs that required little to no training or education were nearly six times more likely to leave in the first month after a promotion than if they had not been promoted — and they were more than twice as likely to leave the company over the balance of a nine-month period.
For jobs that required extensive preparation or had high requirements, such as graduate school or an advanced technical degree, a promotion made those workers 52% more likely to leave in the first month. But by the fifth month, they were less likely to leave than those who had not been promoted.
But what happens after a worker’s first promotion? According to the ADP findings, as workers rose through the ranks, managers were far more likely to leave after a promotion than “individual contributors,” who were far more likely to stay after being promoted.
Rising through the ranks also means an employee ultimately is likely to attract the interest of recruiters looking for C-suite talent.
So what should companies be doing?
Make sure to account for recently promoted worker turnover. That includes building in redundancies and having a plan in case an employee leaves.
Ensure you are promoting the right people. Finding the right people and promoting them could boost their loyalty to the company, while promoting the wrong ones could lower the bar and undermine the motivation of others to work harder.
Experiment with new ways to incentivize retention of recently promoted employees.
“If a person is taking on work with increased responsibility and scope, by all means promote them. But if your outstanding employee is doing excellent work in their role, there are potentially more effective ways to reward that performance — think bonuses or merit pay increases, for example,” Richardson said. “Promote people, but make sure you’re promoting for the right reasons.”
Employers focus on retention
Employers have been adding other benefits, with the percentage of employers offering health insurance in job postings growing from 3.8% in 2019 to 6.7% in 2023, according to ZipRecruiter. The number of companies advertising retirement plans has grown from 10.3% in 2019 to 17.2% in 2023.
Employers also are overhauling salaries, with ZipRecruiter finding that the number of job titles with a pay increase over the course of 2023 has fallen — the opposite of last year. But worker expectations are still high. The annual expected salary of a job offer jumped to $67,416 in July, up from $60,310 in July 2022, according to the Federal Reserve Bank of New York’s SCE Labor Market Survey. The July 2023 figures is the highest mark the survey has recorded.
Companies additionally should be braced for a “forever” labor shortage, even amid a cooling job market, because fewer people will be working by the end of the decade.
James P. Randisi, President of Randisi & Associates, Inc., has been helping employers protect their clients, workforce and reputation through implementation of employment screening and drug testing programs since 1999. This post does not constitute legal advice. Randisi & Associates, Inc. is not a law firm. Always contact competent employment legal counsel. To learn more about the rights of employees who test positive for marijuana, Mr. Randisi can be contacted by phone at 410.494.0232 or Email: info@randisiandassociates.com or the website at randisiandassociates.com
