An accountant who quit because her promotion into a six-figure job only stoked her “resentment.” A plumber who started his own shop after getting a raise to $45 an hour at a highly regarded company. A business strategist who left a $200,000 CFO position because the boss kept his promotion a secret from the team.
These might sound like bizarre outliers in America’s career chronicles. In fact, these three workers who spoke with Fortune are part of a new trend, research shows. New data from payroll processor ADP, released this week, show that promotions increase the chance that a person will leave their job. The research found that 29% of workers who were promoted left within a month—compared with just 18% for those who weren’t.
So do promotions make people want to quit? That’s not quite right, said ADP’s chief economist Nela Richardson. It’s more likely that, by the time a manager considers someone promotion-ready, that worker is already looking elsewhere.
“When you get to a point in your career trajectory where a promotion becomes a possibility, you’re probably looking internally and externally,” Richardson told Fortune. “You’re probably weighing your options.
That’s what happened to Stephanie Heredia, 29, who spent two-and-a-half years at a Tampa, Fla. accounting firm, getting increasingly burned out as her responsibilities grew and her salary lagged. Hired at $60,000, she eventually received a raise to $120,000—but she felt underpaid because she was spearheading the opening of what soon turned into a $2 million division. “I sadly have way too many spreadsheets comparing the money I was bringing in [versus] bringing home!” she told Fortune.
By the time the promotion came, Heredia said, she had already made the decision to quit. She took the promotion anyway, hoping that the reward would make her feel whole. She insists she has “never felt better,” now that she’s left her old firm and gone into business for herself.
Courtesy of Stephanie Heredia
To be sure, many high-achieving workers notch a number of promotions before going off to start their own business, and many of the qualities that win promotions, such as ambition and aggressiveness, are not entirely compatible with corporate loyalty. ADP’s data doesn’t indicate if promotions cause people to quit or whether people who were going to leave anyway happen to get promoted more often. But leaving within a month of a promotion is a damning statistic.
Many post-promotion quitters are making the decision to bet on themselves, even if that means the risky choice of starting a business over the stability of having an employer. It’s a sign of the broader deterioration of Americans’ trust in institutions, according to Rubab Jafry O’Connor, a professor of Management at Carnegie Mellon University.
“The way our society is right now, people are using institutions to get ahead, and for their personal interests,” she said.
Jeremy Howell, 36, told Fortune that working for an employer he saw as unreliable was enough to push him out of a $200,000 salary and into running his own company. After nearly four years at an Austin technology company, Howell secured a promotion to chief revenue officer. His title and pay changed immediately, but Howell’s boss wouldn’t make Howell’s promotion public, he told Fortune.
“He said he wanted me to earn the respect of the team and do the job before the promotion came,” Howell said, a situation that lasted for over a year. “I felt that I was being strung along in a very bizarre way.” Soon after Howell’s wife had their first child, last fall, he left to start a business coaching company.
He just felt that he couldn’t rely on “empty promises” anymore. “I had a daughter now.”
The emptiness of fancy titles
Importantly, ADP’s data only tracks title changes, not whether a worker actually got a raise—highlighting the fact that many promotions are in name only. That’s what happened to O’Connor, the Carnegie Mellon professor, earlier in her career. She said she saw colleagues who were doing similar work get promoted, and asked for a promotion for herself.
“They gave the promotion with zero raise,” she told Fortune. “I went back to them and the boss said, ‘Oh, I thought you just wanted the title.’ I got really mad.” She said that conversation “got really ugly,” which she now regrets—but it did lead to her getting the raise about a week later. But this proves ADP’s point, that sometimes promotions can really backfire.
Then there are the jobs that are management in name only. Plenty of employers in retail, hospitality, and maintenance give manager titles to workers as a way to avoid paying overtime to their clerks, waiters, or cleaners. Calling someone a “director of first impressions” rather than a receptionist saves companies $4 billion a year, a recent study shows.
For the most part, employees are wise to this trend, as is obvious from internet forums awash with workers disgruntled about demotions.
A typical post on Reddit this week describes an hourly hotel maintenance worker, earning about $530 a week, offered a “promotion” to head of maintenance—doubling his hours for the same pay.
“Huge promotion. No pay raise. No benefits. No retirement. In fact my work load would be increased about 3x for essentially less money that I already make,” the person wrote. “Luckily, I’m in a position where I can easily get another job.”
ADP’s data backs this up, finding that workers in jobs that don’t require degrees were most likely to leave after being promoted—a smart way to signal to a better employer that they’re a valuable employee, Richardson said.
“When you’re a high-skilled worker, there’s a lot of ways you can signal, it can be a PhD, JD, a certification, the school or college you went to, the internship you did. When you’re a low-skilled worker, your opportunity to signal [your] value and contributions is very limited, so a promotion is a really strong signal,” she said.
So, does this mean companies shouldn’t promote to avoid losing their best workers? ADP’s Richardson doesn’t think so—despite the still-tight job market, promotions are relatively rare, she said. Instead, companies that are serious about their employees’ advancement should prepare them for the extra work.
“You want to promote workers who are assuming greater responsibility, but you also want to make sure they’re equipped to do that bigger job, and that you have a menu of options and incentives for people at all levels.” In other words, no need for a title change when a simple raise will do.