ADP Research Institute Releases 2019 State of the Workforce Report: Pay, Promotions and Retention, Providing Unprecedented View of the Organization of U.S. Firms
The report uncovers key insights pertaining to business leaders and the HR community at large. It was designed to help employers gain a better understanding of the hierarchical structure of organizations, pay levels, how pay and promotions are connected and how employers retain workers throughout their organizations. Based on payroll from more than 13 million employees, the research provides details about how firm hierarchy, promotions, turnover and span of control is vital to understanding relevant labor market trends.
"Employees are a firm's greatest asset, and the data presented in the State of the Workforce report provides an opportunity for firms everywhere to improve organizational design, better serve their employees, and grow their business," said Dr. Ahu Yildirmaz, co-head of the
Many of the key findings from the inaugural study focus on promotional activities, a topic of great importance to younger employees focused on career opportunities. Overall, employers promote 8.9 percent of their employees annually and those employees received an average wage increase of 17.4 percent. Interestingly, however, promotions within a team are associated with higher turnover among other team members. Dr. Yildirmaz noted that, "While promotional opportunity may be perceived as a net positive, it can also have negative impact for team members who have been passed over." On the flipside, the probability for promotion exceeds 20 percent for employees as they reach higher levels of management within the organization. Firms are more likely to promote internal employees for management positions, and the percentage of internal hires increase for higher levels in the organization.
"A void has existed in the market for human resources data, therefore employers often need to undertake complex organizational restructuring projects with limited insight," said
Additional key findings include:
Women are promoted earlier than men, but face glass ceiling at fourth level of management
- The average number of years to first manager promotion for women is 6.6 years and 7.3 years for men.
- As women move up management levels, there is a steep decline at the 3rd level of management; this decline becomes more pronounced at each level of advancement.
Average wage is
- Managers are paid an average of
$47per hour, while non-managers earn $25.
- Women earn
$25an hour, 79 percent of the $32for males. The ratio of women pay to men reaches as high as 82 percent at the fourth level of management, but drops to 77 percent at the top levels of the firm.
Average number of direct reports per manager is 6.9
- Employees who have managers with more direct reports are more likely to leave the firm. For example, direct reports' turnover for mangers with 4-6 direct reports is 2.3 percent; direct reports' turnover for managers with greater than 15 direct reports is 3.5 percent.
- Leisure/Hospitality (11.4 direct reports) and Education/Healthcare (8.5 direct reports) have highest number of direct reports.
Firms are more likely to promote internally to management (17.2 percent) than make a new hire for management (15.6percent)
- At the highest level of management, 21.5 percent are internal promotions while just 12.5 percent are new hire.
To see detailed State of the Workforce data, including data broken down by industry, gender, and age, visit https://www.adp.com/resources/articles-and-insights/adp-research-institute/research-topics/state-of-workforce-report.aspx.
ADP Research Institute State of the Workforce Report provides comprehensive high quality, data-driven organizational benchmarks derived from ADP's aggregated and anonymous de-identified HR and payroll data. This report helps employers gain a better understanding of the hierarchical structure of organizations, pay levels, how pay and promotions are connected and how employers retain workers throughout their organizations. Providing details about firm hierarchy, promotions, turnover and span of control is vital to understanding relevant market trends, which is the focus of this report.
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Joanna DiNizio, ADP, LLC, Joanna.DiNizio@adp.com, 973-974-5178