Employers can highlight promotions when vying for new talent, but they should also be wary about the impact on the broader workforce.

New research from WorldatWork reveals that the percentage of employees receiving a promotion on an annual basis has increased from 7 percent in 2010 to 9.3 percent in 2016, indicating that organizations are feeling more comfortable with increasing pay levels.

"Promotions have gone up, and that’s a good indicator of where the economic recovery is heading," according to Kerry Chou, senior practice leader at WorldatWork. Even though the increase may seem small, it means millions of workers are getting an increase in pay, and this may be one reason that we see median incomes starting to rise, he said.

As companies promote employees they’re building talent, and it can be a very effective tool to attract people to that company, Mary Ann Sardone, practice leader for North America Workforce Rewards practice at Mercer, told Bloomberg BNA. "Promotions are a signal that companies are actively pursuing that as part of their value proposition," Sardone said.

According to the WorldatWork research, however, companies are not taking advantage of the marketing potential of using promotional opportunities as a recruitment tool, Chou said. "The results in this survey show that a full 64% of organizations do not market promotional opportunities as a key benefit when recruiting for new talent," he said.

Even internally, communications on promotions could improve, Chou said. The last several studies conducted by WorldatWork found that organizations don’t market promotion opportunities or use them to engage employees, and "this is an area where organizations could do better," he said.

Employees often are told about promotions if they inquire, but there doesn’t seem to be much of a trend in terms of organizations proactively letting their employees know about their promotional guidelines, Chou said.

There’s also a potential downside, however, since touting employee promotions could have a negative effect on overall morale, Chou said. "We have to keep in mind that 9 percent of employees promoted mean that 91 percent are not getting promoted," he said.

Organizations should be balanced in their communications, Chou advised, because every employee thinks they deserve the biggest pay increase, and "you can shoot yourself in the foot" if the organization creates a too-competitive atmosphere that lowers employee morale.

Sardone suggested that employers strategically advertise internal promotions by "celebrating careers" within an organization. This tactic "really illustrates" the possibilities an individual can have at that organization, which will inspire other employees instead of making them resentful, she said.

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