The Hidden Costs of ‘Dry’ Promotions

Is a workplace promotion really a promotion if it doesn’t come with a raise? For most people, the answer is no, but that isn’t stopping a growing share of US employers from offering workers what’s known as a “dry promotion,” or a promotion that comes with a title change and new responsibilities — but without a bump in pay. 

Below, we look more closely at the reasons and risks behind this trend, and how employees, managers, and HR can better navigate these situations. 

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Understanding Dry Promotions

Also known as no-raise or quiet promotions, dry promotions are when an employee is offered increased job responsibilities, and often a new job title, but without a corresponding increase in compensation. Such promotions are commonly positioned as growth opportunities or career development, framed as a “great way” for employees to advance their careers. 

Yet at the end of the day, a dry promotion means asking an individual to take on more work and accountability without any financial recognition of that value. “At a certain point, this person is going to tap out and disengage, because people who are motivated for growth and promotion will need financial compensation at some point — whether it's at your company or elsewhere,” said Katy Zorich, fractional HR leader. 

Why Dry Promotions Happen

Dry promotions are especially prevalent in startups and cash-strapped organizations where leaders often follow the misguided logic that titles are free: They may not be able or willing to pay employees more, but they can appease workers with a title change. As a 2024 Wall Street Journal article reported, compensation specialists Pearl Meyer found that 13% of surveyed employers used job titles to reward employees when funds were limited in 2023, compared to just 8% in 2018. 

I have never seen a dry promotion go well...You’re likely to start noticing a lack of motivation on their part.

Several factors contribute to the prevalence of dry promotions.

• Budget constraints: Organizations under financial pressure may use dry promotions as a stopgap solution. 
• Interim needs: Companies need to fill a role after an employee’s departure or during leave, so they tap a current employee for it while they find a permanent replacement. 
• Informal mobility processes: Without structured promotion frameworks, companies may default to increasing responsibilities without evaluating compensation. 
• Lack of compensation frameworks: Organizations without clear leveling or compensation structures struggle to align title changes with appropriate pay adjustments.
• Burnout culture: High performers are frequently “rewarded” for their hard work with more work but not more pay, perpetuating a cycle that leads to burnout.

The Real Cost of Dry Promotions

“I have never seen a dry promotion go well,” said Rachel Ernst, a women’s leadership coach and founder of AccelHERate, an executive coaching firm. “That’s not to say that leaders don’t have good intentions, but there may be short-sightedness and a lack of understanding of human behavior,” she added. 

Leaders may not understand that taking on a new role without a salary increase is inherently discouraging. Organizations that routinely hand out dry promotions can expect to see a decrease in employee retention and a hit to employee morale. 

Some of the concerns associated with dry promotions include: 

• Increased turnover: Receiving more responsibilities with no additional financial reward is demotivating and can lead to increased turnover. “Many employees, once they get the title change, will go out to the market and find a higher-paid job with the same title,” said Ernst. 
• Disengaged workforce: Employees who take on additional responsibilities without compensation are likely to become disengaged or overwhelmed. “You’re likely to start noticing a lack of motivation on their part,” explained Ernst.
• Loss of high performers: Especially in cash-strapped orgs, high performers are often the ones offered a dry promotion, based on the logic that they’re best equipped to handle the extra challenge. But when they grow frustrated and leave, the company ends up losing top performers. 
• Equity concerns: For women and underrepresented groups, the pressure to accept dry promotions may be even greater. Per Ray A. Smith’s reporting in his 2024 Wall Street Journal article, women tend to feel pressure to accept dry promotions, and that may keep them from negotiating with their managers. 

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The Employee’s Dilemma — How to Respond

Being offered a dry promotion is disheartening. Feeling undervalued monetarily but being told you’re ready for more responsibilities isn’t easy terrain to navigate. When offered a dry promotion, employees should assess using the following considerations:

1. Understand the why. Ernst recommended asking your manager, “Can you help me understand why there’s a separation between the title and the pay piece?” This conversation can exert subtle pressure and create a natural segue to ask when a salary bump might be available. 
2. Consider your current workload. Zorich advises talking to your manager “about how what you’re currently doing will adjust in order to accommodate these additional responsibilities.” If you’re being asked to take on more work without the opportunity to delegate other tasks, that’s a red flag.
3. Assess the long-term value. Reflect on whether this position will truly offer the opportunity for new skills and career advancement, or simply add responsibilities with no real professional development opportunities. 

How to Negotiate a Dry Promotion for Best Benefit

If you decide to have a conversation about a dry promotion, follow these steps.

• Set clear expectations and timelines. If you decide the title change is worth it, tee up a forthcoming conversation to revisit pay. “There is the opportunity to be clear about your expectations for a pay raise within, say, six months, but you need to get it in writing,” said Erin Nesbitt, HR advisor and cofounder of Collaboral Consulting, a full-service human resources firm. 
• Be firm but gracious. Be transparent yet professional with your manager about your expectations. Avoid making any threats, but make your limits clear, suggested Ernst. You could say, “It’s important to me to be paid for the value I bring to the company. I want to feel fairly paid, and if this doesn't happen in alignment with our agreement, it could be a situation where I would consider looking elsewhere to be compensated for the value I bring.”
• Consider when to turn down the opportunity. If your manager won't commit to revisiting the conversation within a set timeframe, Ernst said you should be prepared to decline the new role. She recommended saying: “I want to stay at my current level and keep the responsibilities that I have so I can ensure I’m being paid for the value I’m bringing to the company.”

The Manager’s Role in Preventing Dry Promotions 

Managers can sometimes be the ones making the decision on pay raises, while at other times, they’re caught in the middle between leadership, finance, and HR. Even so, they have significant influence. Here's how managers can exert that influence to help their employees. 

• Be transparent about limitations. If budget constraints exist, be forthright about them with your employees, but also commit to advocating your team members’ compensation.
• Set reasonable expectations. Ensure added responsibilities come with appropriate expectations, resources, and support, and commit to a reasonable timeline to revisit compensation. 
• Advocate during reviews. Make it a priority during budget and review cycles to advocate additional compensation for increased responsibility.
• Reprioritize workloads. Instead of simply adding responsibilities, help employees redistribute their work or secure additional resources to make room for new tasks.

It might be exciting at first to have a new title, but employees will soon feel devalued.

How HR Leaders Can Support Systemic Solutions 

As the people center of the organization, HR understands better than most the pitfalls of dry promotions. 

“It's an interesting position to be in within HR or people ops. We see all the pieces in action, and as much as we try to share that reality with the ultimate decision makers, it doesn't always land or it's met with resistance,” said Zorich. 

Here’s how HR leaders can prevent and address dry promotions. 

Educate leadership and managers.

Train leadership and managers on promotion best practices and the unintended risks of dry promotions. Dry promotions are a short-term solution where leaders may feel like the employee is getting what they want — a title change — at no additional cost to the company, but employees won’t be satisfied for long. “It might be exciting at first to have a new title, but employees will soon feel devalued. I’ve seen people ask to go back to their previous role while others leave the company altogether,” said Nesbitt.

HR should work to help senior leadership understand the potential long-term risks — employee disengagement, increased turnover, and loss of high performers, among others. 

When it comes to managers, Zorich said HR can be effective by training them to have better conversations “about what it means to be promoted here, what it takes, and the opportunities for promotion,” as well as around development in general. 

Develop formal frameworks.

Outside of leadership and manager training, HR can support better company-wide policies by implementing standardized approaches to promotions. 

1. Leveling frameworks: By explicitly outlining the competencies, impact, and scope required at each job level, and — critically — aligning these with compensation bands, leveling frameworks help prevent dry promotions by ensuring that advancement is tied to demonstrated capability growth.
2. Competency models: In creating criteria for promotion readiness, HR supports a clearer ladder to promotion for both employees and managers. “That way, when managers sit down with an employee and the employee says, ‘When am I going to be promoted, or what does my promotion path look like?’ which is very typical, they could say, ‘Look, the level of problem you're solving is here. This is what it takes to be at the next level,’ so that everyone has consistent terminology that they're using to have these conversations,” said Ernst.
3. Mini-promotion tiers: Consider creating levels within roles that allow for incremental growth and corresponding pay increases. “A company that I supported did this well. They had three tiers of a role, and so it was very clear that once you had done the mid-year review cycle and met these criteria, you’d get promoted to the second level,” Zorich explained. This allows for at least some level of pay increase that corresponds to the incremental bump in role and responsibility. 

How Lattice Can Help

To navigate promotions fairly and equitably, HR needs integrated systems that bring together performance, compensation, and professional development. Lattice provides HR teams and managers with the tools needed to create more transparent and equitable promotion practices. 

• Performance management integration: Lattice connects increased scope and responsibilities to performance reviews and raise cycles to help create a clear record of employee contributions that justify compensation adjustments.
• Internal mobility tracking and growth planning: Lattice's career development tools allow organizations to build structured paths for advancement and outline skill requirements, responsibilities, and corresponding compensation at each level.
• Manager enablement resources: Lattice equips managers with frameworks and conversation guides to have better promotion discussions, including how to set expectations, provide feedback, and advocate appropriate compensation.

Skip dry promotions for long-term organizational success.

Dry promotions are a short-sighted approach that ultimately harms both employees and organizations. While they may seem like a budget-friendly solution in the moment, the potential costs in terms of disengagement, turnover, and lost productivity can outweigh any temporary savings.

Organizations of all sizes need to rethink how promotions are handled to ensure they’re fair, transparent, and sustainable in the long term. Tools like Lattice provide the infrastructure to support equitable, data-driven compensation and internal mobility practices that align organizational needs with employee career progression and appropriate rewards. 

Through performance management systems that connect individual contributions to organizational goals, and analytics that reveal patterns across teams, Lattice helps companies build promotion frameworks that work for everyone. Request a demo or take a tour of Lattice today to learn more. 

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