Panelists Extrapolate Insights from ADP Workforce Report



The goal? Help HR to make actionable decisions regarding human capital management

By Aliah D. Wright Oct 10, 2014
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Women are still earning less money than men, the construction industry is under pressure to find talent, and the grass truly is greener on the other side, as people typically see at least a 5 percent increase in income when they switch jobs.

These are among the many critical insights contained within the new ADP Workforce Vitality Index released Oct. 8, 2014, by the ADP Research Institute, and examined during a panel discussion on how data and analytics will shape the workplace of the future. CNN’s senior political analyst David Gergen moderated the panel during the second day of Human Resource Executive magazine’s 17th Annual HR Technology Conference and Exposition.

“We created an index, which measures the total real wages in the U.S. private workforce,” said Ahu Yildirmaz, Ph.D., vice president and head of the ADP Research Institute. ADP pays one in six U.S. workers, or 24 million people in the U.S. It also administers health care benefits to more than 15 million U.S. employees and their dependents, she said.

“Our job is to turn this data into actionable insight,” she said. The goal would be to help HR make decisions about how it manages human capital and runs its businesses in different industries.

The formula for the index is calculated as hours worked x wages x number of jobs.

Researchers looked at Millennials, Baby Boomers, employees who remain in their current jobs vs. those who switched jobs (leaving one company for another), hours worked, wages, and turnover rates. They also analyzed jobs by region, industries, firm sizes, tenure, and full- and part-time workers. Researchers looked at the following industries: construction, manufacturing, education/health care, professional services, finance, trade/transportation and leisure/hospitality.

“We are seeing a tremendous amount of [change] in the labor market,” said Steven G. Cochrane, managing director of Moody’s Analytics, which helped develop the report.

For one, the pay gap between men and women is widening. Another important insight is that people usually see a boost in pay if they quit their job and move to another company.

The data reveals that the South is leading in job creation, which Cochrane said is aided by several factors including increasing population.

“The population growth in the South is growing—so demand is up for goods and services and housing … and that creates the economic vitality,” Cochrane said. “But if you look at each individual region, the South is ahead of the West because [of] the structure of the industries driving the Southern economy.”

Added Yildirmaz: “The highest growth we’re seeing is coming from trade and transportation. Those have high turnover rates and lower wages, but they create a lot of jobs.” She also noted that in the financial industry, banks are “really cautious about bringing in new employees.”

So what is HR to make of this new information?

“HR people can think of this [like] a chess game,” said John W. Boudreau, Ph.D., professor and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations. “HR leaders are beginning to look at folks and say, ‘Rather than wait for the perfect engineer or truck driver, how do I [retrain people for new roles]?’ ” Boudreau added that the hiring process can change because of the analysis of big data.

ADP releases the index quarterly.

Aliah D. Wright is an online editor and manager for SHRM. Follow her live tweets during conference sessions @1SHRMScribe.

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