Promotion Preferred Over Salary Increases, Study Finds

By Catherine Ngo Senior Editor and Content Writer, My Business

As half-yearly performance reviews and check-ins approach, promotions have become a primary focus for both employees and employers. However, with restricted salary budgets, research by specialised recruiter Robert Half reveals that more than half of Australian workers would consider alternatives to a salary increase if they were to be promoted.

Besides salary increases, a significant majority of employees express a desire for various non-monetary benefits. Almost six out of ten (59%) workers would welcome a promotion that includes bonuses or revenue sharing, indicating that financial rewards remain a top priority even when a salary increase is not immediately available.

Besides financial incentives, work-life balance benefits continue to be highly sought after. A similar proportion of employees (59%) would accept a promotion if they were offered greater flexibility in working hours, followed by additional holidays (58%), hybrid or expanded remote working arrangements (49%), and paid sabbaticals (48%).

Interestingly, Baby Boomers are more likely to prioritise financial rewards, while younger generations emphasise flexible working hours and environment.

HOW THE GENERATIONS COMPARE APART FROM A HIGHER SALARY

_{Source: Independent survey commissioned by Robert Half among 1,000 Australian workers.}

Companies are grappling with the challenge of controlling costs while retaining talented employees in today's competitive business landscape. Promotions have traditionally served as a vital tool for retaining talent, providing increased compensation and a sense of career progression. However, the rising cost of living, global competition for talent, and the changing nature of work have prompted companies to explore alternative reward strategies.

One significant factor driving this shift is the rising cost of living, making it challenging for organisations to provide substantial salary increases. Furthermore, the increasing global competition for talent has intensified the need for companies to attract and retain top performers. Additionally, the changing nature of work, emphasising flexibility and work-life balance, has contributed to the growing acceptance of alternative rewards.

While financial rewards remain the top priority for employees, flexibility has gained increasing importance, especially with the rise of remote work arrangements. Working from home offers economic benefits by reducing commuting costs and can be accommodated more easily through alternative rewards.

In this regard, 56% of employers are willing to offer promotions that include flexible working hours, while 57% would provide further training and development instead of a salary increase. Younger generations, such as Gen Z and Millennials, are more likely to embrace promotions that include upskilling and reskilling opportunities, recognising the importance of continuous learning and adaptability in the rapidly evolving job market.

The concept of upskilling and reskilling has gained prominence due to rapid technological advancements and the advent of AI. Young professionals, in particular, understand the need for ongoing learning to stay competitive. Offering further training and development benefits employees and creates a mutually advantageous situation for employers, enhancing employee engagement and satisfaction.

Open communication between employers and employees becomes critical when it comes to promotions that do not involve financial incentives. By engaging in transparent discussions about alternative rewards, employers can demonstrate their commitment to employees' long-term success and job satisfaction, mitigating the risk of losing talented individuals due to compensation concerns.

OVER TO YOU

The findings of the study reveal a shift in employee preferences, with promotions gaining prominence over salary increases. While financial rewards remain a top priority, employees increasingly value non-monetary benefits such as flexible working hours, hybrid or expanded remote working arrangements, additional leave options, and opportunities for upskilling and reskilling. 

Employers who embrace these alternative rewards can attract and retain top talent in a competitive business landscape, fostering a mutually beneficial and satisfying work environment.