It's pleasing to think that promotions lead to happier employees and higher retention—and data generally shows this is true. But there's also a significant risk that your newly promoted talent will soon be walking out the door.
The ADP Research Institute analyzed the job histories of more than 1.2 million U.S. workers between 2019 and 2022 and found that getting a promotion increases the chance that a person will leave their organization. That's especially true for individual contributors being promoted into a managerial role for the first time.
The institute found that 29 percent of people quit their jobs within a month after their first promotion at a company. In comparison, the departure rate for similar workers who weren't promoted was 18 percent. The risk is most pronounced during the first six months of a promotion, and the risk gap narrows after that.
"My initial reaction was, 'What? How can that be? Don't people get super-excited when they get promoted?' " said Amy Leschke-Kahle, vice president of talent insights and innovation at ADP. "But when you think about it more, and you think about how the promotion process is managed in many organizations, it is not all that surprising."
Notably, the findings come from pandemic-era research, characterized by a mercurial job market and increased levels of quitting.
"The Great Resignation was a manifestation of pent-up attrition post-pandemic, and many people reassessed their lives and work," said Jim Sykes, global managing director of operations at AMS, a global talent solutions firm. "The surge in attrition was incredibly painful for most employers and resulted in a huge level of internal hiring as that attrition was backfilled. There have been examples of employers trying to counter that attrition by promoting people. In those cases, I can see those employees moving on once the pandemic settled."
Employees quit after promotions for many reasons. In some cases, the newly promoted worker decides to shop their new title on the job market, or news of the recognition attracts more attention from recruiters who reach out with a new opportunity.
But there are things employers can do to increase retention, such as clearly defining and staying true to a promotions process and adequately preparing newly promoted people for their new responsibilities.
"People must be promoted for the right reasons," Leschke-Kahle said. "People should be promoted either because they applied for and got a job at a higher grade with a higher level of responsibility, or their job has shifted enough that it warrants being assigned a higher salary and title. But oftentimes promotions happen as a retention tactic, or as a way to pay people more money or when organizations are desperate to fill a role."
Support Your New Managers
The ADP research found that first-time managers are the most susceptible to leaving after a promotion. "It's a huge leap in responsibility," Leschke-Kahle said. "That change in responsibility is one of the most dramatic that people experience at work. Many organizations do not prepare and support their people enough for that big emotional transition."
She recommended employers do the following:
- Make the investment to prepare people for their new role before they step into it. "I don't mean expensive external training, but at least a little pre-work in what it is like to be a people leader," Leschke-Kahle said. "You can run a shadowing program, or a 'day in the life' program."
- Provide newly promoted people with a 30-day grace period to ramp up. "Don't expect them to do and know everything on day one," Leschke-Kahle said. "Giving that grace period—with ongoing training—lets the employee know that you want them to succeed, and you support them."
- Check in with new managers frequently. "Check-ins don't have to be long; even five minutes will suffice," she said. "Everyone wants to feel cared about. It should be an expectation."
Promotions Have Waned
After a spike in internal hiring—including promotions—at the peak of the pandemic, internal mobility has fallen to one of its lowest levels in years, according to research from The Josh Bersin Company and global talent solutions firm AMS.
Promotions and internal hires made up 40 percent of all hires at the peak of the pandemic in 2020, according to the study, but have since slumped to 24 percent on average. The researchers pinpointed the typical pre-pandemic rate at 30 percent.
"If organizations do not take a radically different approach to how they nurture and develop internal talent, we will continue to see a reduction in internal hiring and promotions," said Jim Sykes, global managing director of operations at AMS.
He added that a big reason for the drop is that there is an increasing shortage of people with critical skills, and employers are instinctively looking for job-ready talent that can hit the ground running.
"Hiring managers assume they have to go on the external market to find that talent," Sykes said.
Another reason for the decline is the significant innovations made in sourcing, engaging and assessing external talent, he said. In contrast, "[i]nternal hiring has not changed during my 25-year career," he noted. "It's largely still posting a job to an internal job board and waiting to see if anyone applies."