Are Promotions Passé?

This article was selected for you by Brian Stallcop, CFP®

Key Takeaways

Many workers today value freedom and autonomy more than promotions.
Help your people grow their skills and have more control over their roles.
Give staff members the opportunity to engage in meaningful experiences.

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Since capitalism began, promotions have been a key tool for entrepreneurs to attract and retain talented people as well as create a succession path so their businesses continue on after their founders are gone. The blacksmith taking on the apprentice might pledge to help the young trainee reach expert status—and even take partial or full control of the forge one day.

That dynamic stayed pretty much the same throughout history—until recently. Today, a growing number of workers don’t value promotions nearly as much as did past generations. For entrepreneurs trying to build highly successful companies, this trend presents challenges and opportunities.

With that in mind, here’s a look at why promotions are no longer the be-all, end-all approach to finding and keeping great people—and some alternatives to promotions that potentially can be better for business owners, their companies and their staff.

The bloom is off the promotion rose

Research shows that among workers today, the ideas of “climbing the ladder” to the top (or even the middle) and acquiring increasingly impressive titles along the way don’t resonate like they used to. Instead, workers are focusing more on benefits like autonomy, flexibility and opportunities to do work they perceive as meaningful.

Consider these findings:

In a survey of more than 4,510 office workers, seven in ten said they’d pass up a promotion in favor of the opportunity to work from anywhere, anytime.
Another study showed that 48% of Baby Boomers value making an impact more than they value salary and titles—a preference shared by 30% of Millennials and 38% of Gen Xers.
A third survey found that 65% of respondents were rethinking the role that work had in their lives, while 56% had a desire to contribute more to society.

There are several reasons why promotions have lost some of their luster among workers these days. Certainly the pandemic reshaped both the importance that people place on devoting themselves to their jobs and how/where they actually perform those jobs. The need for workplace flexibility when COVID-19 was raging has transitioned into the desire for continued flexibility.

In addition, plenty of older workers are sticking around the business world rather than retiring—in some cases because they need to keep working and in others because they want to stay engaged professionally. Regardless, that trend is in effect creating a “gray ceiling” at some companies that blocks younger up-and-comers from rising through the ranks. And, of course, more streamlined “lean and mean” business structures can mean fewer advancement opportunities.

The upshot: The prospect of being promoted—assuming it even is a reasonable prospect at your company anymore—probably doesn’t drive talent to join you, or motivate that talent to stick around and grow with your business, like it once did. Indeed, it’s possible you’ll even have employees turning down your offer of a promotion—an outcome that would have seemed crazy not long ago.

Since capitalism began, promotions have been a key tool for entrepreneurs to attract and retain talented people as well as create a succession path so their businesses continue on after their founders are gone. The blacksmith taking on the apprentice might pledge to help the young trainee reach expert status—and even take partial or full control of the forge one day.

That dynamic stayed pretty much the same throughout history—until recently. Today, a growing number of workers don’t value promotions nearly as much as did past generations. For entrepreneurs trying to build highly successful companies, this trend presents challenges and opportunities.

With that in mind, here’s a look at why promotions are no longer the be-all, end-all approach to finding and keeping great people—and some alternatives to promotions that potentially can be better for business owners, their companies and their staff.
The bloom is off the promotion rose
Research shows that among workers today, the ideas of “climbing the ladder” to the top (or even the middle) and acquiring increasingly impressive titles along the way don’t resonate like they used to. Instead, workers are focusing more on benefits like autonomy, flexibility and opportunities to do work they perceive as meaningful.
Consider these findings:

In a survey of more than 4,510 office workers, seven in ten said they’d pass up a promotion in favor of the opportunity to work from anywhere, anytime.
Another study showed that 48% of Baby Boomers value making an impact more than they value salary and titles—a preference shared by 30% of Millennials and 38% of Gen Xers.
A third survey found that 65% of respondents were rethinking the role that work had in their lives, while 56% had a desire to contribute more to society.
There are several reasons why promotions have lost some of their luster among workers these days. Certainly the pandemic reshaped both the importance that people place on devoting themselves to their jobs and how/where they actually perform those jobs. The need for workplace flexibility when COVID-19 was raging has transitioned into the desire for continued flexibility.

In addition, plenty of older workers are sticking around the business world rather than retiring—in some cases because they need to keep working and in others because they want to stay engaged professionally. Regardless, that trend is in effect creating a “gray ceiling” at some companies that blocks younger up-and-comers from rising through the ranks. And, of course, more streamlined “lean and mean” business structures can mean fewer advancement opportunities.

The upshot: The prospect of being promoted—assuming it even is a reasonable prospect at your company anymore—probably doesn’t drive talent to join you, or motivate that talent to stick around and grow with your business, like it once did. Indeed, it’s possible you’ll even have employees turning down your offer of a promotion—an outcome that would have seemed crazy not long ago.
Alternatives to promotions
The good news in all of this is that you have numerous ways beyond promotions and titles to attract, engage, retain and develop your people—and that these methods are likely to prove more effective in the coming months and years given how workers’ values and priorities have evolved.
Alternative #1: Offer greater control.
Your people can’t call all the shots, of course—but perhaps they can have a bigger say in how they do their work for your company. Example: You might give them a choice of which two days per week they can work off-site, or allow them to come into the office on a flexible schedule. As noted above, freedom has supplanted promotions for many workers—so discuss what staff is looking for in terms of how their work life is structured and how you can make some (or all) of that wish list a reality.
Alternative #2: Prevent staff who are content from becoming complacent.
Your first thought about an employee who isn’t interested in a big promotion may be that they’re lazy, bored or unmotivated to make your company great. Go beyond that by learning why the person wants to stay where they are. It might be a desire for the right work-life balance. Regardless, if an employee is content, work together on other ways they can enhance their skills or put them to use in ways that bring new value to the business. Having talent who wants to be amazing in their existing roles is great—but they also need to understand that they should grow and develop in that role.
Alternative #3: Focus on new experiences over new titles.
Promotions might not be what they once were, but plenty of workers still want to feel like they’re advancing in their careers in some way. All the talk in recent years about living an experience-based life can apply to the workplace, as well. For example, you might offer experiences like training opportunities that are of interest to your workers, or mentorships. Getting to travel more as employees build their skill set could also be rewarding and motivational. The key here is to understand the types of experiences that matter to your people and prospective staffers—and which ones are turn-offs.
Alternative #4: Make recognition a part of each day.
Younger generations of workers are accustomed to frequent feedback, recognition and praise—in contrast with older workers, who often came up in a “put your head down and do your job” world. That said, recognition can be an easy way to build trust and enthusiasm that keep your people loyal regardless of their age. Each day, find ways to highlight contributions your team members have made—it doesn’t always have to be for a major event, but your recognition should be communicated genuinely. Positive feedback by itself might not keep your people on the bus—but it’s a smart component of an employee retention plan.
Alternative #5: Think laterally.
Moving sideways can be the new moving up, in the right circumstances. Offering staff new roles with similar levels of responsibility as their current roles (at the same or roughly the same pay level) can give your people a path to new skills—or novel applications of existing skills—in new departments or divisions. It can also create better co-learning, co-elevation and collaboration among your employees as “what works” for one person is shared with others, and new ideas are created and tested. Shifting an employee to special projects when applicable is another form of lateral “promotion” that can keep people fired up about working at your company.
Conclusion
Ultimately, it’s unlikely that promotions as tools for recruitment, advancement and retention are truly dead. Workplace values and structures tend to morph and evolve over time—and there will always be workers who are all about moving up through the ranks. However, given what many of today’s workers are looking for from their careers, being ready with non-promotion options for advancement may just help you find, keep and get the most out of your people.

Why you might not want to promote

There is one situation where it really might not make sense to use a promotion as a reward/motivation tool: promoting a truly exceptional employee to a leadership position.

To see why, think back to the so-called Peter Principle, which essentially says that we eventually “rise to the level of our incompetence.” Chances are, your very top performer (by sales, say) has skills that—while clearly valuable—don’t necessary translate to the job of manager or leader. Someone who hits and even exceeds their goals doesn’t automatically have the ability to get others to do the same. Therefore, looking only to this small cohort of staffers for your next leader may come back to bite you.

In many cases, a potentially better approach is to look for future leaders among the middle of the pack—specifically the ones who ask challenging questions in meetings, propose new ideas and even give constructive pushback to your proposals.

Alternatives to promotions

The good news in all of this is that you have numerous ways beyond promotions and titles to attract, engage, retain and develop your people—and that these methods are likely to prove more effective in the coming months and years given how workers’ values and priorities have evolved.

Alternative #1: Offer greater control.

Your people can’t call all the shots, of course—but perhaps they can have a bigger say in how they do their work for your company. Example: You might give them a choice of which two days per week they can work off-site, or allow them to come into the office on a flexible schedule. As noted above, freedom has supplanted promotions for many workers—so discuss what staff is looking for in terms of how their work life is structured and how you can make some (or all) of that wish list a reality.

Alternative #2: Prevent staff who are content from becoming complacent.

Your first thought about an employee who isn’t interested in a big promotion may be that they’re lazy, bored or unmotivated to make your company great. Go beyond that by learning why the person wants to stay where they are. It might be a desire for the right work-life balance. Regardless, if an employee is content, work together on other ways they can enhance their skills or put them to use in ways that bring new value to the business. Having talent who wants to be amazing in their existing roles is great—but they also need to understand that they should grow and develop in that role.

Alternative #3: Focus on new experiences over new titles.

Promotions might not be what they once were, but plenty of workers still want to feel like they’re advancing in their careers in some way. All the talk in recent years about living an experience-based life can apply to the workplace, as well. For example, you might offer experiences like training opportunities that are of interest to your workers, or mentorships. Getting to travel more as employees build their skill set could also be rewarding and motivational. The key here is to understand the types of experiences that matter to your people and prospective staffers—and which ones are turn-offs.

Alternative #4: Make recognition a part of each day.

Younger generations of workers are accustomed to frequent feedback, recognition and praise—in contrast with older workers, who often came up in a “put your head down and do your job” world. That said, recognition can be an easy way to build trust and enthusiasm that keep your people loyal regardless of their age. Each day, find ways to highlight contributions your team members have made—it doesn’t always have to be for a major event, but your recognition should be communicated genuinely. Positive feedback by itself might not keep your people on the bus—but it’s a smart component of an employee retention plan.

Alternative #5: Think laterally.

Moving sideways can be the new moving up, in the right circumstances. Offering staff new roles with similar levels of responsibility as their current roles (at the same or roughly the same pay level) can give your people a path to new skills—or novel applications of existing skills—in new departments or divisions. It can also create better co-learning, co-elevation and collaboration among your employees as “what works” for one person is shared with others, and new ideas are created and tested. Shifting an employee to special projects when applicable is another form of lateral “promotion” that can keep people fired up about working at your company.

Conclusion

Ultimately, it’s unlikely that promotions as tools for recruitment, advancement and retention are truly dead. Workplace values and structures tend to morph and evolve over time—and there will always be workers who are all about moving up through the ranks. However, given what many of today’s workers are looking for from their careers, being ready with non-promotion options for advancement may just help you find, keep and get the most out of your people.