Considering a demotion? It could mean a fresh start

Whether you’re an employee looking for a change or an employer seeking a way to retain a solid but underperforming employee, a demotion may meet your needs. The decision, of course, should be treated delicately.

The staffing firm OfficeTeam recently performed a survey of some 300 HR managers and over 1,000 office employees aged 18 and older. According to the survey, 46% of HR professionals have witnessed a demotion, and about 14% percent of workers have been asked to step down into a lower-level role. Among those demoted, just over half quit their jobs.

According to the survey, the four main reasons for demotions include:

  • Performance issues – 39 percent
  • Failure to succeed after a promotion – 38 percent
  • Position eliminated or other organizational restructuring – 16 percent
  • Voluntary demotion – 6 percent

Employees can seek a voluntary demotion for a number of valid reasons, including life changes that require more time away from work, changes to the job, interest in a new department or area where a lower-level position gets a foot in the door, as a disability accommodation, and more. Having an open discussion with your manager and HR to find out what opportunities may be available is critical.

For employers, there can be various advantages to offering a demotion instead of letting an employee go. It can be difficult to find qualified employees, and the recruiting and training processes are time-consuming and expensive. Existing employees who are underperforming may still have substantial knowledge of how the company and its systems work, and they may just be “diamonds in the rough” who can shine in a job that better fits their skill set.

The key is honest, positive communication. HR or management should spell out exactly why the demotion is being offered and explain that the company sees it as an opportunity for the worker to develop the skills he or she needs to be successful in future roles.

Employer precautions

Whenever a demotion is offered, it is crucial for the employer to fully and accurately document the reasons for doing so. This limits the risk of a disgruntled employee from bringing a successful claim that the demotion was motivated by discriminatory or retaliatory reasons. Most equal employment opportunity and employment law statutes prohibit retaliation against employees who exercise their rights or make good faith discrimination claims.

In some cases, termination is more appropriate than demotion. For example, you may avoid trouble by terminating people who commit serious policy violations or who are accused of misconduct. Still, for the right employee, one step back can lead to a future opportunity to take two steps forward.


FindLaw Network

Serving Client Throughout