> So too bad, had a better offer to advance elsewhere and their interest in me was clear.

"Their interest in me was clear."

Exactly this.

Enlightened and effective leadership would pair a "not this time" response with a series of career development meetings, resulting in a tailored path for advancement; not as detailed as "this job, then that job, then that," but informed enough to show the candidate that they were heard and valued.

An additional bone in the form of a small raise and or training would also be effective.

And of course the plan needs to be reviewed periodically and sincerely, for adjustments and progress on the part of both parties.