Transcript
Mark:
Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer. My guest today is Ben Hanowell, director of People Analytics Research at the ADP Research Institute. They’ve just launched a report series called Today at Work and its kickoff edition takes a look at the dynamics and impacts of promotions. There’s a lot you may have never thought of about that, and it’s part of a broader look at the connection between motivation, commitment, and productivity. We’ll do a deep dive on this edition of PeopleTech.
Ben, welcome. It’s really great to meet you. I’m looking forward to talking with you. Thank you for being here.
Ben:
Yeah, thanks for having me.
Mark:
Now, I was reading some of the material that you folks are publishing today, and can you just give me the title again of what it is, the documents?
Ben:
Sure. What we’re talking about today is the Today at Work Report. It’s a quarterly report that we have two editions so far from the past two quarters, and the next one’s coming out in September. I guess your listeners will already be able to read it when this podcast is released, but what this newest issue is called is The Hidden Truth About Promotions. But before I get to that, let’s just talk a little bit about what the Today at Work Report is. Is that all right?
Mark:
Yeah, yeah.
Ben:
Sure. Yeah. So the motivation behind the Today at Work Report is to harness insights from two rich data sources that are rich in different ways. And the first one is a monthly survey, a monthly worker sentiment survey that our people and performance team designed. My colleagues, Dr. Mary Hayes, Francis Chuney, and Jared Northrop also analyzes the data that comes out of that survey. What we do is we interview over 2,500 workers every single month asking the same questions. And we’ve done this for almost a year now, collected responses from a total of about 52,000 participants. And we ask them questions to try and gauge their engagement in the workplace, the degree to which they feel motivated to bring their best to work. We ask them questions to try and measure their resilience in the workplace, basically whether or not they feel prepared to meet the challenges of the workplace and think that their managers and company leadership are ready to do so. And also their sense of connection with the workplace, whether they feel seen, heard, included in the workplace.
And this is based on over a decade of research that is based on, I think something like over, almost 500,000 responses from people in 29 countries. So it’s informed by a long history of research. So we have the survey data there, and then the other source of rich data that the Today At Work Report is based on is of course ADP’s payroll and HR data, which represents, for any given month, about 25 million workers in the United States. And it actually, it stretches, it gets bigger than that because when you think that that data is stretched across, say seven years, what we really are talking about is 2 billion months of collective work by people in the United States at tens of thousands of employers.
These are two very rich data sets, and we want to bring them together to help business leaders, policy makers, HR practitioners and members of the workforce make informed decisions about the workplace, whether it’s workforce management, if you’re on the demand side of the labor market or your place in the workplace, what you’re going to do, where are you going to work if you’re a member of the workforce on the supply side.
Mark:
One of the things that the report talked about was that promotions are a good thing. And when I was reading that, I thought, well, yes, everyone I think would say that, but there’s more to it than that. There’s more to the idea of promotions of that. Could you talk about that?
Ben:
Sure. Promotions are a good thing, and when we think about promotions, we have to think about who are they good for. There are different parties involved. We’ve got the employer and we have the person who just awarded a promotion to someone. We have the person who just was awarded the promotion. And we also have the people that, if we’re talking about managerial promotion, we’re talking about the people who report up to that person.
So promotions are a good thing, but good for whom and when and for what reason? So what we do in this report is what we try to do is we try to uncover some of the trade-offs that employers experience when they promote somebody through the company’s ranks. And when we do that, we try to keep in mind what’s going on in the heads of the people who just received their first promotion. And I guess the best way to explain this is to tell you a story about myself and then we can get into the data.
So when we were thinking about what to write in this report, what to cover in this report, I was talking with Neela Richardson, the head of ADP Research Institute and ADP’s Chief Economist. And we were talking about the other component of this report, the Employee Motivation and Commitment index. And we were talking about this, what makes people feel motivated and committed to their employer. And part of it is the idea that you’ll be recognized for excellent work. And one way to recognize people for excellent work is to promote them through the management ranks, if an opportunity comes up.
But the thing is, my last job before I came to ADP, I had recently gotten a promotion and I used that promotion as leverage in negotiations to get another job. And here I am. And so while a promotion, it can be a signal to a worker that they can build a career at their current employer, it is also a signal that they might be at their most marketable at that moment and that they may have opportunities elsewhere. And that’s what we were thinking about when we did this research in Today at Work, The Hidden Truth of Promotions is we were thinking about this trade-off from the employer’s perspective. So we measured the impact of promotion on the risk that somebody will leave the company. And so if you’d like, we can get into those findings.
Mark:
Well, I saw that more than a quarter of the people who received their first promotion leave the company within a month. Now, at first, it seemed counterintuitive to me, though what you just said makes it a little clearer. But could you expand on that? What did you guys decide is going on there?
Ben:
Yeah, so let’s expand on that number there. Over a quarter of people who receive their first promotion leave their employer within a month. What’s really important here is thinking about the chances somebody leaves their employer given that they got their first promotion, and then compare that to what we think their chance of leaving their employer would’ve been if they hadn’t gotten that promotion. So let’s talk about that.
So what we found is that within a month, among those who were promoted, 29% had left their employer. And we estimate that among those same people, if they had not been promoted instead, only about 18% would’ve left their employer within the first month. So their risk of leaving their employer is 1.6 times higher since they got the promotion than it would’ve been if they didn’t get the promotion instead. But how long does this affect linger and does it maybe go away after some time?
And so let’s fast-forward four months to the five-month mark. By that time, we see that those who receive that first promotion about 62% have left their employer within five months, compared to about 59% if they had not been promoted. That’s only a 7% difference. And then let’s fast-forward one more month to the six-month mark. By that time, what we see is that the difference between the promoted and not promoted scenarios has kind of gone away. So among those who got promoted, we see that by the six-month mark, 63% have left their employer compared to if they had not been promoted, about 64%, a little bit higher actually now would’ve left their employer. And then the trend actually reverses. So past the six-month mark out to the nine-month time horizon, we see that those who had not been promoted were a little bit more likely to leave their employer than if they had been promoted.
So what does this mean? We take these two facts together, the fact that within the first six months, if you get your promotion, you’re more likely to leave your employer, but in the next three months after that, you’re actually slightly less likely to have left your employer. Well, taken together, what all of this means is that an employer loses only about 14 days of work per first promotion over a nine-month period.
And when you think about this in the scheme of things, unless you’re a very small company or unless you are promoting everybody at the company, which is impossible, this isn’t really that big of a trade-off. It isn’t big enough for us to say, oh, we got to stop promoting people. Promotions are still good, but what it means is that employers should think about this increased risk that people have of leaving the company after they get their promotion, and they should think about it in the following ways.
So first, why are people a little bit more likely to leave or actually a lot of bit more likely to leave their employer after they get their first promotion? Maybe it’s because career development doesn’t end when somebody gets their promotion, that’s when it should begin. Somebody’s taking on more responsibility, so they need some support from their employer in doing so, and then on the other… So we need to provide some incentive and some support for workers once they get promoted, and that may mitigate this trade-off that we found.
Mark:
I want to shift gears a little bit.
Ben:
Yeah, sure.
Mark:
You mentioned the Employee Motivation and Commitment Index, and I’m just finding that really fascinating for some reason. So what is it about, what’s its purpose and how does it get there?
Ben:
Sure. So there were two goals with the Employee Motivation and Commitment Index. And what I should say from the outset is that my colleague, Dr. Mary Hayes did most of the work on this, and she did such great work here, but I’ll speak to it as much as I can. So one of the major motivations behind the EMC Index is to measure workers’ allegiance and loyalty to their employer because they feel like they’ll be recognized for excellent work. They are confident in their company’s company’s future. They trust their team leader and the company’s leadership, they feel motivated to come and bring their best to work, excited to work every day, and they feel like they’re represented in the company’s leadership. And also they feel like their company promotes people based on the work they do rather than what they look like. And then when they share their opinion, they feel heard.
We wanted to create one measure of all of these concepts. And so that was the driving motivation behind the EMC Index. And the second motivation really is that we already had these three other measures, which I spoke of before, an engagement metric. How motivated do you feel to bring your best at work? A resilience metric, how prepared do you feel you and your employer are to meet the meet challenges at work? And a connection metric, which measures how connected, how seen and heard you feel in the workplace? And we wanted to combine all of those into one measure that again, measures employer’s allegiance to their employer. And so that’s what we did, and that’s what the second part of this edition of Today at Work focuses on.
Mark:
Looking through the index, the industry numbers were interesting. Healthcare and education were two of the lower scoring areas in terms of motivation and commitment, and we’re always talking about healthcare workers as heroes, teachers as heroes. So that’s surprising me. What do you think is going on there?
Ben:
Well, remember, what we’re measuring here is motivation and commitment to an employer, not to a profession. And so I imagine the teachers are very motivated and committed to educate people. I imagine that healthcare providers and social workers and all the other professions that are captured by the healthcare industry, that they’re very motivated and committed to what they do. But the question is, are they motivated and committed within the workplace based on what the conditions of those of that workplace are, and also how they’re compensated for what they do?
The healthcare professions are very stressful. If you think about people who work in nursing homes or social workers, mental healthcare workers, these people are experiencing large amounts of stress every day, and many of them are compensated at fairly low levels given that degree of stress. So that might be what’s going on here. Same thing with education. A lot of educators, they work extra hours outside of the classroom because they’re so dedicated to educating people. And it may be sometimes hard, for especially educators who are working in an expensive city to be able to afford to live there, for example. So that might make it harder for one to feel motivated and committed to a particular employer in the workplace, even if you are super motivated and committed to the profession that you’ve chosen.
Mark:
All right, so if I’m an executive, but I’m not a particularly numbers driven executive, I’m not a numbers guy, how can I get the most value out of the EMC?
Ben:
Yeah, that’s a good question. So I think one of the main findings that came out of this study that anybody, including managers who aren’t particularly data-driven, can take away is that people’s motivation and commitment in the workplace is a state of being that can change based on workplace conditions. That can change based on the attributes of somebody’s manager or the type of work that they’re doing. It’s not a trait that you either have or don’t have. You’re not either motivated and committed and you are motivated and committed forevermore, or you’re not. The EMC Index is measuring a state, not a trait. And I think that if managers can take that home with them, they can realize that they have the capacity to increase the motivation and commitment that their workers have to them in such a way that might improve retention and also productivity.
More generally though, in the Today at Work Report, there are a lot of qualitative insights that emerge. We’ve just talked about how it varies by industry, but we also look at how EMC Index varies by how it’s related to intent to leave, how it’s related to productivity, how it varies by gender and these qualitative insights. I think that managers, even managers who aren’t driven by numbers, I would like to see these managers see how these qualitative insights jive with their personal experience and then use that to guide their strategies and tactics for workforce management.
Mark:
Ben, thank you so much. It was great to meet you. I appreciate your being here, and I hope we’ll talk again.
Ben:
Well, thanks for having me. It’s been a good conversation, and I’ll see you next time.
Mark:
My guest today has been Ben Hanowell, director of People Analytics Research at the ADP Research Institute. And this has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of Recruiting Daily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcast.com. And to keep up with HR technology, visit the HCM technology report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.
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