People@Work: These Days, Even Promotions Are Harder to Come By

Jobless workers today face an uphill battle in finding new employment. One statistic, cited perhaps more than any other, is ample proof of that: the nation's high unemployment rate, which has hovered north of 9% for 20 months now.

But plenty of other, more obscure statistics show that the nation's job market has a long way to go before it can be deemed healthy once again. Take the fresh data showing that the number of promotions given to American workers has dwindled, suggesting that even those with jobs are having a tough time getting ahead.

Only about 7% of workers received a promotion in 2009, lower than the 8.1% seen in the average year, according to a recent survey by WorldatWork, an employment research organization based in Scottsdale, Ariz.

A Sign of a Company's Internal Labor Market

The survey was taken in September, polled 720 U.S. employers and also showed that the average size of promotions declined, though those in the loftiest positions -- executives and corporate officers -- saw the biggest drop.

Though the 1.1 percentage-point decrease may seem incremental, it's actually quite large, says James Stoeckmann, who analyzes compensation and benefits for WorldatWork. Promotions track directly with the health of the labor market -- and specifically the health of labor markets inside companies. Fewer promotions are "a sign of the lingering impacts of the recession," he says.

The drop is particularly troublesome for workers because advancement may be the only way they can earn pay increases in the wake of freezes many employers have implemented in response to the recession.

Not Buying a Beach House in Maui

Heather Whittier, who works at a call center for a major insurer, is one of the lucky ones. In December, the Austin, Texas, resident received a promotion and corresponding pay boost despite her company's stated moratorium on promotions and raises. For that reason, she says, her advancement came unexpectedly.

"I think my promotion and subsequent raise was so that I'd stop complaining," says Whittier, 32, who hasn't seen her role within the company change. "It was a 3% bump in my base rate, so I won't be buying a beach house in Maui anytime soon."

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Whittier says worker morale at her company has suffered in the wake of layoffs and a reduction in the amount the company pays to employees who work hours that stretch into the evening, known as a shift differential. However, that move helped reduce the number of layoffs corporatewide, she says.

Still, Whittier says, co-workers are restless because many believe they've earned merit increases, especially in light of the company's profitability, which has accelerated as the economy has slowly gained steam -- a situation that's common today.

Though Whittier's comments suggest that her employer granted her a promotion to quiet a squeaky wheel, that's rarely the reason most companies promote employees. Advancements are far more frequently a way for employers to recognize employees' drive, talent and aptitude, and they're an important retention tool, Stoeckmann says.

A Penny-Wise Practice

In essence, it's a bargain between company and worker: Employees get more money and responsibility, while employers benefit from the fruits of their labor. Still, Stoeckmann says, promotions can't be viewed in a vacuum. They have to be considered as part of a comprehensive employment package that includes pay and benefits, training, career development and policies that allow workers to better balance demands of work and home life.

Employers that implement such a comprehensive approach are more likely to have greater success in attracting and retaining top talent. Conversely, those that focus too squarely on the bottom line, by freezing or even cutting pay or limiting promotions, for example, are setting themselves up for a potential exodus of key employees as the job market heats up.

Those narrowly aimed actions have a degenerative effect on employees' loyalty to the company, Stoeckmann says. "As the economy improves, and workers see more opportunity out there, they'll be less loyal [to their current employers] because they can see what can happen, unfortunately, when the economy turns down."

Not only is employees' job security threatened, he says, but so are the pay and benefits they've become accustomed to. Further, a perceived lack of opportunity for career advancement and promotion can be demoralizing.