A recent research led by HR software vendor ADP shows that promoting employees might be bad for employee retention. Even if this is counter intuitive, this research shows that HR hell may be paved with good intentions. The research also provides other interesting insights, namely about the number of promotions.
Promoting employees increases risk that they leave
About the research
ADP Research Institute have analysed the “job histories of more than 1.2 million people in the United States working for companies that employed at least a thousand people.” The research arm of the HR software editor looked at years 2019 – 2022. There is no mention of a potential bias brought by the pandemic or its consequences in the report.
It may appear to make sense that you should promote employees so that they become more loyal to your business and yourself. Research carried out by ADP in late 2023 shows on the contrary that this may prompt such employees to leave their jobs more quickly.
As the writers of the report state, “When someone gets their first promotion, the recognition might boost their commitment to their employer for a while. But it might also improve their confidence in their job prospects.”
Because promotion increases the risk of a person leaving a company, every promotion leads to a loss in effective headcount equal to about 14 days of work over a nine-month period.
Promotions are few and far between
Yet, promotions are rare, be it in America or elsewhere. It’s hard to work your way up the ladder. In a previous report, ADP “[…] showed that only 4.5 percent of workers are promoted within two years of being hired.” As a result the impact of ADP’s discovery remains limited.
“These data suggest that landing a promotion gives a person a leg up in their search for work outside their current employer,” the writers of the report go on. “But they’re also consistent with another workplace phenomenon: People who are given more responsibility without adequate preparation, compensation, or resources could become more likely to quit.”
Promoting Employees: a familiar story
Such findings have triggered some thoughts as far as I’m concerned. It has happened to me a couple of times already that I either worked hard to promote my team members and they didn’t even seem to be happy with the result. It appears to me that they probably thought that this was natural, that they deserved it anyway, and the fact that I had to fight for their sake was in fact not to be mentioned.
Once I even proposed that one of my employees became a shareholder of my company. Rather than welcoming the idea, he decided to leave the company immediately. Regardless, we were getting on very well and are still on good terms years later. As it happens, we went on working together a few more years. He had to set himself up as a contractor and I must admit that I had never really understood why he did that. This research by ADP shows that this reaction of his was in no way different from that of others. One will still have to understand why, though.