Companies squeezed by a still-tight labor market and years of competitive pay raises are turning to an age-old tactic to retain employees, and Gen Z workers are seeing it the most: new title, no raise.
The concept, called a “dry promotion," has long existed in the workplace, but Gen Z employees are seeing it more than other workers in today's marketplace. About 33% of Gen Z workers surveyed by staffing and recruiting firm Robert Half Inc., in data shared with The Playbook, said they were offered a dry promotion in the last 12 months. That compares to 18% of millennials, 7% of Gen X workers, and 3% of baby boomers.
Compensation and leadership consultancy Pearl Meyer found in a survey that the vast majority of companies offering title boosts with no money are smaller ventures, with companies below $3 billion in revenue far more likely to use job titles to reward employees than larger companies.
According to the survey results, about 40% of companies with between $300 million and $1 billion in revenue or assets used job titles as rewards in 2023—up from 14% in 2018. The percentage among companies with less than $300 million in revenue or assets also increased, rising from about 10% in 2018 to 35% in 2023. But among companies with more than $3 billion in revenue or assets, the percentage of companies offering job titles as rewards held relatively steady, at around 25% in 2018 and 2023.
"It’s evident that many smaller organizations have identified job-titling practices as an additional tool in the effort to reward and retain talent," the company said in a report on the survey. "This can be an attractive approach for organizations without the cash resources to compete with their larger competitors, as it is a no-cost approach to this issue."