Workers who get passed over for a promotion while their teammember advanced are more apt to quit than workers in other teamswhere no promotion occurred, according to The ADP ResearchInstitute's 2019 State of the Workforce Report: Pay, Promotionsand Retention.
|The inaugural benchmarking report for pay and promotion practices among employers with 50 ormore workers found that teams where a promotion occurred experiencea turnover rate of 13.3 percent, while teams without a promotionhave 12.3 percent turnover.
|Related: 3 employee turnover myths
|“Employers should consider the effect of promoting individualteam members and the retention strategy for key team players,” theauthors write.
|Overall, firms promote 8.9 percent of employees, while new hiresmake up a much larger portion of positions being filled, at 30.2percent. However, for management positions, firms promote moreinternally than they hire externally — 17.2 percent of managers arepromoted, while 15.6 percent are new hires. For the C-Suite andother top positions, 21.5 percent are internally promoted and only12.5 percent are new hires.
|“Employers can compare their rate of internal promotion againstnational and industry benchmarks to determine the health of careerdevelopment programs, learning and development and the cost oflosing high potential front-line workers,” the authorswrite. “In addition, externally hired managers are more likely toincrease total compensation costs.”
|The report also found that employee turnover variessignificantly with demographic factors. Not surprisingly, monthlyturnover rates for older employees are relatively lower compared toworkers in younger age groups: the overall turnover rate for those65 and older is 2.2 percent, while turnover successively increasesacross younger age groups to 8 percent for those age 25 years orless.
|What may be surprising is that turnover rates are very similaracross genders, with males leaving their jobs at a rate of 3percent per month and females at 3.5 percent per month overall.
|“Employers can compare employee turnover against national andindustry benchmarks split out by age and gender to pinpointorganizational issues,” the authors write.
|Another key finding: on average is takes 6.6 years for women tobe promoted to their first management promotion, while on averageit take 7.3 years for men. However, as women move up managementlevels, there is a steep decline at the third level of management,with women hitting the proverbial “glass ceiling” at the fourthlevel.
|“While less than half of one percent of all American workersreach the three highest management tiers, the under-representationof women is problematic because these elite positions have anoutsized influence on corporate policy and culture,” the authorswrite.
|“The average wages of job holders in these fourth-levelmanagement positions is also 40 to 50 percent higher,” they write.“Considering that these leadership positions typically requirecandidates with substantial job tenure and mentoring, short-termfixes will be challenging.”
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