The ADP Workforce Vitality Report: A Must-Read

The ADP Workforce Vitality Report: A Must-Read

This article was updated on August 6, 2018.

The ADP Workforce Vitality Report (WVR) is a uniquely detailed, multidimensional and insight-rich quarterly analysis of the overall vitality of the U.S. labor market. The WVR provides an in-depth look at how the job market is doing nationally, as well as regionally, at the state-level, by industry and by demographic.

The findings illuminate emerging workforce trends around employment growth, wage growth, job turnover and hours worked. The key indicators and refined components help business leaders identify areas of growth and weakness in the U.S. labor market, and utilize that information for improved, data-driven decision-making about their own organization's HR needs.

Why It's a Must Read

While other studies provide data on broad employment trends, the report offers more: a dynamic look at quarterly changes in wages and hours worked, age and gender demographics, tenure, turnover rate, and pay level. It also analyzes eight industries across four regions as well as small, midsized and large businesses. Through deep analysis and benchmarking, the report provides business leaders with actionable insights on workforce strategy. No existing report offers as much detail or as many relevant indicators on the state of the U.S. workforce.

The WVR is issued by ADP in collaboration with Moody's Analytics. It's based on ADP's large, anonymous and aggregated payroll data set of 24 million employees; that accounts for one in five of all U.S. private-sector employees.

The Report answers important questions about the state of the U.S. workforce, such as:

  • How is the workforce thriving as a whole?
  • Which industries are doing well?
  • Where are the jobs?
  • What are the trends in wages and hours?
  • What roles do age and gender play?

Multiple Dimensions

The Workforce Vitality Index (WVI, a subset of the WVR) tracks data for four types of workers: (1) Job Holders, who were hired prior to the current quarter; (2) Job Switchers, who were hired by one firm in this quarter, but worked for a different firm in the previous quarter; (3) Entrants, who were just hired and not employed in the previous quarter; and (4) Leavers, who left a firm either voluntarily or involuntarily and are now out of the workforce. The WVI model has the following components: turnover rate, change in nominal hourly wage for job switchers, change in nominal hourly wage for job holders, change in quarterly hours worked for job holders and total employment growth.

How the Indicators Might Be Used

Here's one small hypothetical example of the type of insight the WVR can offer:

Company M is a California-based manufacturer with 1,200 employees. Looking at the data t, Company M can see the average wage and wage growth for workers in organizations of comparable size in manufacturing in similar locations. The company can also see the average employee turnover rate, and compare that with its own. Let's assume Company M has been struggling with a higher than average turnover rate as compared to its peers. Now Company M has identified a problem and can begin analyzing for causes..

The WVR wage data could reveal that Company M pays its associates well in comparison to the peer group. This is a clear indicator that Company M's turnover issue is related to something other than wages. The data tells them that there is something else happening at the company that is causing their employees to leave, so they can begin to look at other possible issues and work to improve areas where they may be weak compared to the competition.

This is just an example of the type of insights that can be gleaned from the multidimensional data provided.