Promotion freezes are hurting your employee morale

Jun 21, 2024

VP of Talent and DEI

Promotions are often seen as the ultimate markers of knowing whether or not you are doing a good job. However, recently, based on economic conditions, promotions are almost nonexistent. For entry-level workers, it can mean getting stuck in a position where you have to go outside to find a new opportunity.

Imagine being a mouse trapped in a maze with no exit. That's how many feel when they see their career advancement stalling despite working hard. This may have been seen as a trivial matter, but now, it is a crucial concern for all organizations.

In a recent Bloomberg article titled Promotions Are Hard to Come By, Blocking Entry-Level Workers From Even Starting, they found that lack of churn in the US workforce isn't opening jobs for new grads and share ADP data showing promotions have dropped off from 2022 high.

Based on this article, it would be a good idea to dissect the reality and impact of stagnant promotions, unravel the complex web of factors affecting job mobility, and explore strategies to promote a fair, motivated, and dynamic workforce.

The reality of stagnant job promotions

Stagnant job promotions aren't simply figments of disgruntled employees' imaginations; they're shaping the very fabric of today's labor market. With organizational leadership becoming flatter, we see few opportunities for higher responsibility and pay available. If you ask individual contributors, they perceive promotions as more than just a change in title or a pay bump. A promotion signifies career development and professional growth.

When talented employees see that they are not getting promotions, their morale and motivation drop. The result is poor performance and lackluster productivity. In such an environment, performance reviews are performative rather than an essential benchmark for career advancement.

Impact of stagnant job promotions on entry-level workers

Imagine being a new graduate, stepping into your first job or new industry, and excited by the promises of professional growth. Fast forward a year, and you need a path forward.

Entry-level roles often serve as stepping stones for professionals, especially those in the early stages of their careers. These positions are entryways to learning, growing, and eventually moving up the professional ladder.

However, today's scenario paints a bleak picture. When promotions are hard to come by, entry-level roles become dead ends rather than gateways.

The lack of upward mobility stunts professional growth and crushes employee confidence and overall job satisfaction. The stakes are high—companies risk losing valuable talent, and professionals lose hope in their career prospects.

Performance reviews: A double-edged sword

Performance reviews let employees know how they are doing in their roles. Managers are expected to evaluate an employee's role, achievements, and areas of improvement.

Ideally, they should be part of a clear roadmap for gaining access to promotions. However, when promotions become stagnant, performance reviews can feel like evaluating trees in the forest. You know the capabilities, but they're just not going anywhere.

That's not to say performance reviews are futile. They can be highly effective when backed by fair evaluations and data-driven insights. Textio Lift, for instance, uses AI-enhanced tools to ensure assessments are free from bias, promoting equal opportunities for advancement.

However, these insights are only valuable if they lead to tangible career development opportunities, something that's increasingly scarce in today's economic conditions.

Retention and employee engagement

Retention and employee engagement are the lifelines of any thriving organization. Employees want to feel that their contributions are valued and that there's a future worth striving for.

When promotions stagnate, retention efforts face significant hurdles. It's like trying to fill a leaky bucket; no matter how much effort you pour in, the result is elusive. To tackle this, companies need to look beyond traditional performance metrics. Retention strategies must integrate goal setting, training and mentoring, and, most importantly, fair evaluations.

Employees are likelier to stay engaged if they see a clear path toward career advancement and professional growth. Communicating development plans, giving consistent feedback, and acknowledging any success is essential to show that you are committed to their development.

The crucial role of feedback in career advancement

Feedback is the cornerstone of career development. Imagine navigating through a dense fog without a compass; that's what career advancement feels like without regular, constructive feedback.

Feedback should be timely, specific, and actionable, allowing employees to know exactly where they stand and how to improve. The impact is twofold. It aids in employee growth and aligns individual performances with organizational goals.

Start writing actionable feedback with Textio

However, feedback alone is not magic dust that will eliminate promotion barriers. It must be part of a larger, inclusive strategy that promotes fair evaluations and equal opportunities. This is where platforms like Textio Lift can significantly contribute, removing biases and focusing on the individual's contributions and potential.

Economic factors affecting job mobility

It goes without saying that promotions are only available if companies are making money. Economic factors play a crucial role in job mobility and career advancement. When the economy slows, companies tighten their budgets, often freezing promotions. It's like driving on the highway and coming to a complete stop. You are forced to sit and wait.

Economic downturns lead to cost-cutting measures where promotions and pay raises are the first to get axed. These short-term savings can result in long-term losses in the form of disengaged employees and poor talent retention.

Even in challenging economic times, investing in employee development can pay dividends in the long run. Clear communication about the economic factors affecting promotions can also build trust and understanding among employees, mitigating some of the negative impacts.

Gen Z workers: The new kids on the white-collar block

Gen Z workers are now entering the workforce in significant numbers, bringing a different perspective on work, life, and career development. It has been said that Gen Z values career progression and job mobility more.

They aren't just looking for jobs; they're looking for meaningful work experiences that contribute to their personal and professional development.

Organizations risk alienating this new, dynamic labor force segment in an environment where promotions are scarce. Recognizing Gen Z's unique motivations and expectations is crucial for retention, engagement, and creating a work culture that promotes equal opportunities and professional growth.

Unlocking job mobility through training, mentoring, and real-time coaching

Training, mentoring, and real-time coaching are invaluable tools for unlocking job mobility. Imagine having an experienced guide lead you through a treacherous mountain trail; that's the support a solid mentoring program can provide.

Training programs give employees the skills to advance in their careers, while mentorship offers personalized guidance and support. Like what is available when using Textio tools, real-time coaching provides immediate, actionable feedback that helps employees refine their skills, continuously improving and adapting to new challenges.

These initiatives show you care. They prepare employees for promotions and demonstrate your commitment to their growth. Real-time coaching is crucial as it helps bridge the gap between formal training sessions, allowing for continuous improvement and instant feedback.

This ongoing support ensures that employees can apply new skills and insights immediately, enhancing their performance and accelerating their career progression.

Building a culture that values continuous learning and development aligns individual capabilities with organizational needs, creating a win-win scenario. By integrating these elements, organizations can ensure that their workforce is constantly evolving, motivated, and ready for new challenges, ultimately leading to a more dynamic and thriving business environment.

Using AI for fair evaluations

Humans are 100% biased. Leveraging performance review and evaluation technology can be a game-changer in ensuring fairness and reducing biases.

Unlike humans, tools like Textio Lift use advanced algorithms to analyze and improve the language used in performance evaluations, making them more inclusive and unbiased.

These technologies provide data-driven insights that ensure fair evaluations, promoting equal opportunities for career development. Imagine having a neutral third party evaluate your work; it adds a layer of objectivity that can be missing in human-led evaluations.

Robots are not coming for your job (yet). Technology can never replace the human element entirely, but it can significantly augment the evaluation process, making it more robust and reliable. Companies embracing AI are better equipped to make strategic promotions that align with employee aspirations and organizational goals.

Strategic promotions and organizational goals

Strategic promotions are not about filling positions but aligning them with organizational goals. Think of it as putting together a jigsaw puzzle. Every piece (employee) must fit perfectly to complete the picture (organizational goals).

Promotions should be planned to reward individual contributions and support the organization's long-term objectives. This requires a comprehensive understanding of the employee's capabilities and the organization's needs.

Inclusive language and unbiased evaluations ensure that promotions are based on merit and potential rather than favoritism or biases. Organizations that successfully implement strategic promotions often significantly boost employee confidence, motivation, and overall morale.

So what now?

Promotions extend beyond mere advancement up the corporate ladder; they encompass recognition, personal growth, and alignment with individual and organizational objectives. For entry-level employees, stagnant promotion opportunities pose a significant challenge, underscoring the need for enhanced support to foster career progression.

It’s not solely about eliminating bias in performance evaluations.

Clear and actionable feedback enables employees to view their growth, development, and professional achievements from a broader perspective than simply whether they received a promotion.

This approach empowers individuals to avoid feeling trapped and to actively enhance their skills and capabilities within their current roles.

Effective feedback and skill enhancement serve as key motivators for top performers. Textio Lift makes it easier for managers to give employees the feedback they need, even when promotions aren’t available.

While economic factors remain influential, companies must acknowledge that investing in employee development and strategic promotion can yield enduring advantages. Organizations can retain talent and empower employees by cultivating an inclusive, goal-driven workplace culture that fosters professional advancement and overall organizational success.