A HUGE majority of companies are promoting people without giving them the extra cash, a survey has found.
Two hundred senior human resources (HR) executives were questioned in the survey commisioned by OfficeTeam about their hiring and remuneration plans for the first half of 2012.
When asked why they give promotions without salary rises, HR directors said that they would instead offer flexible working (39 per cent), additional leave (28 per cent), performance bonus (25 per cent) and/or a deferred salary increase once the person had proven themselves in their new role (20 per cent).
The proportion of companies citing salary freezes as their main reason for awarding promotions without rises was much higher in the UK (40 per cent) than in continental Europe (22 per cent), helping to explain why promotions without rises are more common in the UK (61 per cent) than Europe (47 per cent).
Phil Booth, director of OfficeTeam, a division of specialised recruitment firm Robert Half, said: “Our research finds that work-life balance is more highly valued in the UK than in other countries around the world: employers and employees see alternative benefits to salary rises, such as extra holidays, more flexibility or deferred performance bonuses as valid ways to incentivise employees in difficult economic times.
“Employers are asking their teams to take on more responsibility but don’t necessarily have the funds to reward them financially. They recognise that a promotion with additional leave or flexibility is a valid alternative, as nearly three in four (72 per cent) UK HR directors worry about losing top employees in the coming year.”
However, OfficeTeam warns while promotions without rises in salary can be an incentive, they could also lift top performers into employment brackets that enable them to seek more senior roles with other companies.
Mr Booth added: “Every person is different and so are their views on what’s important in their remuneration and benefits. While companies may be quick to increase salary in boom times, we’re currently seeing a much stronger emphasis on other forms of compensation including deferred raises and bonuses as well as flexible hours and extra holidays.
“It’s even more important for companies to stay in close contact with their valued employees to understand their motivation and what will encourage them to stay.”