Overpromotions and pay hikes: Research warns against premature career progression

A new report has warned employees against being blinded by shiny pay rises and work promotions as companies scramble to retain staff.

Employees are being warned against pushing for promotions and pay rises, as a new report reveals they may lose out in the long run.

A Royal Melbourne Institute of Technology (RMIT) study has found that almost half of Australian managers surveyed felt they needed to overpromote and overcompensate new hires in the past year.

Forty per cent of them said they had hired candidates who didn’t have the skills or experience necessary for new roles - something one expert believes is likely to negatively impact those employees in the near future.

“A tight job market means many companies are more open to fast-tracking careers or hiring professionals with fewer years of experience,” RMIT Online interim chief executive Claire Hopkins said.

“This is not necessarily a problem and can positively contribute to finding and promoting great talent.

New research suggests almost half of managers felt they needed to overpromote and overpay new staff. Picture: Supplied

“However, businesses must complement this with support and training to ensure new employees have what is needed to succeed.”

The report also found that one in three managers who moved to a new company in the past year were concerned they didn’t have the right skills.

Almost 40 per cent are actively looking for another position after just months in the new job.

Legalite founder and managing principal Marianne Marchesi said it was a tough candidate market in the legal profession.

“This is the toughest I’ve seen it in the six years of my business,” she said.

Marianne Marchesi said the legal profession was experiencing a tough job market. Picture: Supplied

Ms Marchesi said the “great resignation” and burnout has led to a significant shortage in mid-to-senior-level lawyers.

“So it flipped in favour of the employees where they were able to demand a lot more in terms of pay and promotions,” she said.

“I’ve also noticed some of the larger law firms are essentially throwing money at their staff to keep them there, like tens of thousands of dollars.”

While the thrill of being able to move ahead quickly in their career is something most would jump at, Ms Marchesi said she suspected many would struggle with the premature advancement.

“So either they feel like they are in the same position that they were before or the firm wants their pound of flesh so to speak,” she said.

That could mean longer billable hours or extra responsibility that they were not prepared or upskilled for.

Ms Marchesi has warned that burnout and eventual resignations could result. Picture: Supplied

Ms Marchesi said it could lead to more burnout among staff and the firm eventually losing those employees altogether.

“Companies must ensure they are actively putting strategies together to prioritise their employer value proposition,” Ms Hopkins said.

This could be through remuneration or providing on-the-job or formal training opportunities to help staff realise their potential.

Most dissatisfied workers don’t feel valued by their employers, and half of those believe they aren’t receiving adequate compensation for their role or level of responsibility, according to the RMIT research.

Ms Marchesi said it was not just about the Band-Aid fix of how are we going to keep these workers now, it’s about keeping them into the future.

She recommends employers upskill their staff not just in technical skills but in areas like business development and leadership to ensure they are ready for promotions when they open up.

Originally published as Overpromotions and pay hikes: Research warns against premature career progression