Promotion, but a dry one. Well, dry promotion is the new word in town. In today's corporate landscape, where cost-cutting measures are prevalent, this new trend known as 'dry promotion' is emerging in the appraisal process. Typically, when an employee receives a promotion, a salary hike accompanies the new role. However, with 'dry promotions,' employees are elevated to higher positions without a corresponding increase in salary. This practice has left many employees feeling uncertain about their future prospects.

What Is Dry Promotions?

'Dry promotions'—this practice entails employees receiving a promotion without a corresponding increase in salary. While traditionally promotions were synonymous with salary hikes, 'dry promotions' have redefined this concept, leaving many employees grappling with the implications. Companies are increasingly opting for 'dry promotions' as a means to redistribute responsibilities without increasing the cost-to-company (CTC) package. This trend underscores the evolving nature of employee appraisal processes and highlights the importance of understanding the broader context in which these changes occur.

A recent survey conducted by benefits-advisory firm Mercer revealed that a growing number of companies are allocating less of their salary budgets for promotion-related hikes in 2024 compared to the previous year. This shift in approach has significant implications for employees, particularly in terms of financial remuneration and career advancement.

Employers view 'dry promotions' as an opportunity to reallocate responsibilities from laid-off workers to existing employees without incurring additional costs. According to a report by compensation consultant Pearl Meyer, more than 13% of employers opted to offer new job titles instead of salary hikes. This figure marks a notable increase from 8% in 2018, indicating a shift in how companies are managing their workforce.

The rise of 'dry promotions' can also be attributed to the increasing integration of artificial intelligence (AI) in businesses. As AI impacts organisational structures and employee roles, companies are reevaluating traditional promotion strategies. For instance, some companies are assigning AI-related responsibilities to existing executives or hiring new executives specifically for AI-related roles. Additionally, a decentralised approach to AI oversight is becoming more common, with companies expecting AI efforts to be led by various leaders across multiple functions within the organisation.

The trend of 'dry promotions' reflects the evolving nature of the corporate world, where companies are reimagining traditional practices to adapt to changing economic realities and technological advancements.

(The above story first appeared on LatestLY on Apr 17, 2024 12:55 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).