However, giving predominance to seniority when bestowing promotions and 'perks' has many obvious potential disadvantages for an employer. If employers are mandated to favor seniority over other qualities, they may have to promote less qualified and talented workers, simply because that individual has served more years at the company. Seniority-first promotions can create a culture of complacency amongst employees, once the employees have 'done their time' at lower-lever positions. Promoting older and more established workers can also insulate management from new ideas, as these workers are less likely to bring in energy, enthusiasm, and new sources of knowledge from outside the...

And newer workers may find themselves in the frustrating position of being more capable and even more qualified than older, more senior workers, and see those seasoned, senior workers promoted instead. Thus this type of promotional practice can sometimes result in the loss of strong employees, rather than facilitate retention.
The degree to which seniority factors into promotion will depend on a balance between the nature of the workplace culture and the specifics of position: however, in all instances, some degree of competency must factor into the decision-making process: a purely seniority-based system will frustrate both employers and employees.