UCL School of Management Associate Professor Anthony Klotz recently co-authored an article published in Harvard Business Review assessing the ways in which organisations can retain efficient and capable workers during prosperous labour times. For Anthony and co-authors Chase Thiel, Jay Hardy, Carter Gibson and Andrew Barsa, that answer is simple: promote them.
While the co-authors acknowledge the uniqueness of the COVID-19 pandemic and its impact on workforces and the job market, they also argue that the latter operates similarly to that of a pendulum, swinging from periods of firm-friendly to job seeker-friendly markets. After ‘The Great Resignation’, a term Anthony himself coined in 2021 to describe the large volume of employees leaving their roles, the job market saw a shift in power dynamics, which saw favourable conditions once again shift in favour of employees.
In the article, the co-authors draw on data from over 11,000 managers from 2018 to 2023 to explore whether promoting employees during employer-friendly labour markets reduces the chances of these employees leaving once the market once again shifts in their favour. Initially focusing on pre-pandemic data, the co-authors generally found that promoted managers were slightly less likely to leave than those hired externally during this period.
However, data collected after April 2021 shows that, as job opportunities abounded, internally promoted managers were more than 47% less likely to quit than their externally hired counterparts. The article also cites research indicating that employees who have been promoted are more attached to their roles and are therefore less likely to leave than workers of a similar level who have been hired into that role. In other words, research supports the widely-accepted theory that promotion encourages loyalty from workers.
