Common sense says it would be crazy to turn down a pay raise, but it’s important to understand your worth before taking on a new title and responsibilities. Getting a promotion can be incredibly rewarding, if it aligns with your career priorities, furthers your financial goals, and doesn’t lead to burnout.
Here’s how to break down that shiny new promotion package with a level head.
Does a job promotion align with your goals?
The first step is to measure the promotion against where you want to go in your career in the future. Of course, compensation is important, but the new job duties you’re being offered matter, too.
“Ideally, a person receiving a promotion can articulate their long-term career goals” says Carlota Zimmerman, a career coach based in New York City. “Consider, for example, the people at the top of your industry you admire: what career choices did they make?”
Instead of focusing on the money, Zimmerman suggests thinking about whether you want to stay at the same company surrounded by the same people, or if you’d prefer to branch out, try something new, and develop fresh competencies elsewhere.
How to financially evaluate a promotion
There are two important considerations when assessing whether the raise you’re receiving with your promotion is adequate.
First, use the Know Your Worth tool to see how your new salary compares to similar positions. If you’re not being offered a fair rate, negotiate the terms of your promotion.
Second, determine how your raise affects your weekly budget. Ask yourself questions like:
- How much would the raise increase your paycheck?
- Would a raise bump you into a higher tax bracket?
- Is the compensation increase only salary, or does it extend to stocks and bonuses?
- Would a promotion require you to relocate to a more expensive city or state?
- If there is additional workload, would the compensation increase be offset by increased costs like childcare, commuting, or meal services?
- Are there non-monetary benefits associated with the promotion?
If you work for a company with an in-house HR department, they’ll probably be able to show you exactly how much more money you’ll receive in each paycheck moving forward.
Weigh the importance of a title in a career promotion
Your performance, skill set, and dedication are usually more significant when determining your job duties and opportunities than whether you’re “manager” or "senior manager." But, if you know you want to be a vice president, you need the right titles on your journey to that goal.
“Title matters if you have a desire to climb the corporate ladder,” says Bianca Jackson, a career coach. “The usual path of someone progressing to the C-Level is manager to director to vice president to chief. Without that title progression, it may signal either you’re not ready to be promoted or you don’t have the potential to hiring managers who value linear progression of responsibility.”
On the other hand, if you’re gaining knowledge and experience to start your own business, your title is not as important.
The mental health question
In most cases, money cannot correct a problem with work-life balance. If you’ve been unhappy with the company or your job, a raise is only a temporary fix.
Sometimes a company will offer a promotion, raise, or bonus to keep an overworked employee from leaving, but commenters in the Glassdoor Community warn that the burnout always comes back. An engineer in the Glassdoor Community observed that raises attached to an increased workload are a “recipe for disaster.”
Accepting a promotion without a title or salary change
Not all raises come with title changes, and not all title changes come with raises.
“No title change because the company is restructuring is understandable. No pay increase because the company is having financial problems is understandable. But then, as an employee, you do want to make sure you are being recognized and honored in some way,” says Gina Marotta, a career and business coach. This could come in the form of company stock, a shorter work week, or having less desirable duties taken off your plate. In this situation, “fairness and a sense of balance are key,” she adds.
Is your promotion worth it?
Accepting a promotion is not the only way to advance your career. You can also switch companies.
Glassdoor Community members note that job-hopping every three years is relatively normal, and a great way to get bigger salary increases than the 1-3% increase you might receive when staying at the same company for many years.
Whether you stay or go, take time to consider the terms of a promotion before accepting it. Don’t be afraid to counter-offer, or, if you’re already looking outside your company, to use the promotion offer as a negotiating chip.