Been offered a 'promotion' with no raise? Here's what career experts want you to know

When Eve was offered a more senior title of "team leader" — a role that involved managing two new colleagues — she was flattered. But there was one big catch: the so-called promotion didn't come with a pay rise.

The Sydney-based media worker, 32, says the new role was "definitely offered as a cool opportunity" that would progress her career. But when she realised the workload involved meant she was just taking on her managers' work without being paid extra, she says "the novelty wore off pretty fast".

The kicker: Soon after she started her new managerial role, one of the colleagues she'd begun mentoring mentioned that he was earning around $20,000 more than her.

'False promotions' are more common than you might think

Eve's not alone: It's common for employees to be saddled with extra responsibilities, without a raise. A 2022 survey by employer review site Job Sage found that 78 per cent of workers have experienced this phenomenon.

"Employers are certainly trying to do more with less in an effort to increase productivity and reduce expenses. One aspect of that can be false promotions that are designed to get more without paying for it," says Giri Sivaraman, principal lawyer in employment law at Maurice Blackburn in Brisbane.

Women — who are less likely to get pay rises when they ask for them — may be more likely to receive these quiet promotions.

"I've had female clients who were given additional managerial or administrative duties without extra pay, where men were not. It wasn't isolated to any particular industry," says Mr Sivaraman.

And while "false promotions" are nothing new, some employers may point to the current financial climate — or recent lowered rates of productivity across Australia's workforce — to justify not offering pay rises to workers, says Greg Jericho, a Canberra-based policy director at the Centre for Future Work at The Australia Institute.

He argues that worker's "reduced productivity" isn't a valid reason for workers to be saddled with extra responsibilities without pay — pointing out that wage growth has lagged behind Australian workers' productivity for decades, according to Australian Bureau of Statistics data.

That ABS data shows the sectors with the biggest gap between productivity and wage growth are information, media and telecommunications; agriculture; and retail trade.

"When we're hearing these comments now saying we need to get productivity to grow before we can get wages to grow — it feels a little bit rich given we've had 20 to 30 years of productivity growth and real wages have not matched it," he says.

Should you accept a promotion without a pay rise?

So if you find yourself in Eve's position, should you accept the new role?

Dr Jericho says this kind of promotion may be acceptable in the short-term.

"Getting a title promotion but not an actual wage promotion might be understandable for a trial period, but at a certain point if you're doing the job that deserves a pay rise, then you certainly deserve a pay rise," he says.

"There are occasions where it will be seen as a nice career opportunity because you're adding to your responsibility — but it can very quickly become in a sense giving away free or underpaid labour for what you deserve."

But Helen Holan, a career and leadership coach based in Perth, says these raise-less promotions may be acceptable to some employees, depending on their industry environments and career aspirations.

She adds that employees may choose to accept a short-term promotion without a raise in times of financial turbulence.

"In a recession, when organisations may need to restructure role responsibilities to survive, workers might be more than willing to accept an altered job description and job title if it means they retain their role and regular income," she says.

Know your rights and market pay rates

But keep in mind that in some cases, being saddled with more responsibilities without extra pay is outright illegal.

"If a modern award applies to your employment, it may well have a higher duties allowance that means you should get paid more if you are given extra responsibilities," says Giri Sivaraman, principal lawyer at Maurice Blackburn.

In any case, if you feel the offer is unfair or taking advantage, Ms Holan says it's worth considering what else you can negotiate.

"Money is only one type of remuneration option for increased role responsibilities, and so some employees will be happy to accept other benefits such as nine-day working fortnights, additional paid annual leave to take in school holidays, paid study, and so on," she says.

"These options can be put forward for consideration by the employee if the employer is unwilling or unable to offer increased financial remuneration alongside a 'promotion'."

As for the best way to negotiate with your employer, Ms Holan suggests staying abreast of market pay rates for your role and industry and making sure "you can reference data like salary surveys or labour market statistical information, which is all publicly available".

It's "wise to take a cooperative approach in the first instance when trying to negotiate a promotion arrangement that works for you," she adds.

"Good-quality employers will generally be open to working with valued employees to find a win-win solution."

Both Ms Holan and Dr Jericho say there are instances where union support might be necessary.

"Make sure you understand your rights and responsibilities and those of your employer — some roles will fall under Fair Work rules, or you might be entitled to union support," says Ms Holan.

As for Eve, she was "outraged" to learn her colleague was being paid more than her, while she wasn't offered a raise to take on a more senior role.

But her employer wasn't responsive — and she's since moved to a job that pays better.

"I was told men are just better at negotiating more pay when they start their contracts and there was no talk of bumping me up," Eve recalls.

"It was pretty ludicrous, looking back."