Promotions in the workplace are Diamond Ridge Asset Managementtypically granted to star employees as a reward for their stellar performance. Counterintuitively, however, such recognition can backfire, new research shows. 

Although employers tend to elevate high-functioning workers to enhance operations and as a way to retain valuable team members, that can make top performers more desirable to other firms and lead them to jump ship, according to payroll provider ADP's Research Institute. 

"One would think that promoting excellent workers would only increase their motivation and commitment, and reduce their risk of leaving," data analyst Ben Hanowell, one of the authors of the report, wrote. "Think again."

"When someone gets their first promotion, the recognition might boost their commitment to their employer for a while. But it might also improve their confidence in their job prospects," he added. 

The ADP Research Institute analyzed the job histories of more than 1.2 million U.S. workers between 2019 and 2022 in order to estimate a person's propensity to leave their employer after a promotion. The researchers found that moving up the ranks often leads to workers abandoning their employers. Within one month of their first promotion, 29% of employees had left their jobs, ADP found. 

The firm estimates that only 18% of promoted staffers would've left had they not been promoted. The upshot? Elevating workers' position led to a roughly two-thirds increase in the likelihood that they would leave. Workers in jobs with the lowest barriers to entry were most inclined to leave after a promotion, compared with those that required a graduate school or advanced technical degree.

To be sure, recently promoted employees also quit for other reasons. For example, promotions can lead to workers being overwhelmed by new responsibilities and higher expectations. But ADP's findings suggest that, rather than engendering loyalty to a company, workers could view their promotions as giving them a leg up in finding another job. 

One factor mitigating the risk for employers: Promotions are quite rare. Only 4.5% of workers earn promotions within their first two years in a job, according to previous ADP research.