Managerial promotion rates cool to their pre-pandemic level

July 07, 2024

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Headlines about the cooling labor market typically focus on job openings, hires, quits, and layoffs. The complicated question of career development—in particular the pace that people promote through the management ranks—gets less attention.

To address this question, we examined ADP data representing more than 50 million people working at more than 96,000 U.S. employers between January 2019 and February 2024.

How we measure the pace of managerial promotion

We measure managerial promotion from HR records that track changes in employers’ reporting structures, as well as from the presence of words such as “manager” in job titles.

Using this data, we divided the number of times people moved up at least one rank in management by the number of person-months people worked in the same period. To get the annual rate, we multiply that number by 12 months. Then we multiply the result by 100 to express the rate as a percentage.

The pace of promotion in 2023 matched the pace in 2019

In 2019, employers promoted 13 people for every 200 who worked the full year, a managerial promotion rate of 6.5 percent. In 2020, the pandemic slowed the pace of promotion to 5.5 percent, but the rate bounced back to 6.8 percent the following year. As the labor market heated up after the pandemic, the managerial promotion rate peaked at 7.3 percent in 2022.

The pace of promotion in 2023’s cooling labor market matched the pace in 2019: 6.5 percent.

The cooling continues in 2024

Promotions tend to pick up in January, a trend interrupted by the pandemic in 2020 and 2021. While the annual promotion rate peaked in 2023 at 6.5 percent, the January promotion rate peaked a year earlier, at an annualized rate of 9 percent. The January promotion rate fell to 8.1 percent in 2023 and fell again to 7.3 percent in 2024.

As with any other labor market indicator, we don’t know when the managerial promotion rate might stop cooling.

The takeaway

In 2023, managerial promotions cooled along with other labor market indicators. That trend continues this year. This means that workers today not only will find it more difficult to find a job than they did in 2022. They also might find it more difficult to advance at their current employer.

For employers, these findings suggest they be mindful of how workers’ managerial promotion expectations changed during the hot labor market of 2021 and 2022. When promotion opportunities fall from a peak to previous levels, it might be time to reset those expectations through transparent communication with employees about career development.