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Occupational advancement from within.

Most employers offer employees different ways to progress within their company or organizations. A promotion usually means a pay raise, sometimes accompanied by other benefits such as a better office or a company car. It may mean a change in job duties, greater authority and responsibility, and a chance to learn new skills. A move up to the career ladder also may change a person's occupation. The Bureau of Labor Statistics does not have statistics on all the ways employees advance in their jobs. Data are available, however, from the January 1987 Current Population Survey on workers who progressed within their employing organization by changing their occupation. This article examines the characteristics of these workers and the patterns of their occupational moves.

Occupational Mobility Rates

Of the 100.1 million persons who were working both in January 1986 and January 1987, almost 10 million had changed their occupation during this period. Almost 5.3 million of them voluntarily switched to a new occupation, citing better pay, advancement opportunities, or working conditions as their reasons for shifting; the remainder gave other reasons for having a new occupation, including the loss of previous job, a move to a different residence, and a switch from part-time to full-time work. Although 3.2 million of the workers who voluntarily changed occupations also changed their employer, this article focuses on the 2 million others who chose to change occupations within their employing organization (company, government agency, nonprofit concern). More than three-fourths of the latter reported higher earnings in their new jobs, which likely means they received promotions from their employers.

The occupational mobility rate measures the incidence of occupational change in a given period. Since 2 million of the 100.1 million persons employed both in January 1986 and January 1987 had voluntarily switched to a new occupation within their employing organizations, the mobility rate within an organization for the labor force was only 2 percent for the 12-month period. The rate varied, however, depending on worker characteristics, such as age, education, job tenure, occupation, and industry.

Voluntary occupational mobility rates within employing organizations were similar for men and women, but tended to diminish with age for both sexes, declining from 3.6 percent for persons 20-24 years old to 0.6 percent for those age 50 or over. Interestingly, persons ages 16 to 19 had a lower rate than those in their twenties, probably because many teenagers seek only temporary income and leave the employer before opportunities for promotions arise. The likelihood of workers switching occupations also declined as their years of tenure with the employer grew. For example, workers who had been with their employer 1 to 2 years had a mobility rate of 4.1 percent, compared to 1.2 percent for those who had been with their employer 10 years or more. It is not surprising that occupational advancement diminishes with age and tenure. Organizational hierarchies tend to be pyramidal, with more room at the bottom than at the top of a ladder; and, consequently, the probability of advancement is greater in an employee's early years with a firm.

The 2.1 percent voluntary occupational mobility rate for high school graduates was almost double the 1.2-percent rate for less educated workers, which suggests that a high school diploma was a minimum requirement for promotion in many firms. College educated workers had somewhat greater rates than high school graduates, and higher education was a factor in continued advancement through occupational change within employing organizations. Workers who had 4 years of college or more accounted for 23 percent of the job-changers with 1 to 2 years of employer tenure, 26 percent of those with 3 to 4 years, and 30 percent of those with 5 years or more, which probably means that college graduates were not reaching a plateau in their careers as early as their coworkers.

Opportunities for progressing within organizations by changing occupations generally are best in large companies, which tend to have more layers of occupations than small firms. This factor helps explain the relatively high, 2.8-percent rate of voluntary occupational mobility in manufacturing, an industry made up of larter-than-average firms. Although manufacturing accounts for only one-fifth of total employment, it accounts for almost one-half of all employment in companies that had 500 employees [TABULAR DATA OMITTED]



[TABULAR DATA OMITTED] or more. The construction industry in contrast, which had a 1.1-percent rate of voluntary occupational mobility, is characterized by relatively small companies.

The ovement of workers between occupations inside their employing organizations may be measured by exit and entry rates. The exit rate for an occupation is the percentage of its workers in January 1986 who had voluntarily gone to other occupations by January 1987; conversely, the entry rate is the percentage of an occupation's workers in January 1987 who had voluntarily transferred from other occupations since January 1986. Entry and exit data are presented in table 2. The table is based on data for all detailed occupations, although only the average for occupations in major group is given. For example, a typist promoted to secretary is counted as both an exit from and an entry to the administrative support occupational group. Nevertheless, differences between the rates indicate which occupational group's workers are most likely to voluntarily enter or leave within their firm.

Entry rates were greater than exit rates for occupations in three occupational groups: Executive, administrative, and managerial; technicians and related support; and precision production, craft, and repair. The 3.5-percent entry rate for the managerial group was more than double the 1.7-percent exit rate, indicating a relatively large net inflor of workers. Net inflows into the technician and craft groups were modest by comparison. Indeed, the gain in managerial jobs was more than 5 times the gain in the two other groups combined.

NOt surprisingly, earnings were very high for workers in managerial jobs and above average for technicians and craft workers. Occupations with relatively low earnings had a net loss of workers. This is the major reasons that the exit rate for service occupations was almost double the entry rate, the difference representing 112,000 workers who advanced to better jobs. Relatively low earnings also contributed to the net outflows in two other groups: Administrative support workers including clerical; and operators, fabricators, and laborers.

Earnings, however, do not always explain the differences in exit and entry rates. The professional specialty occupations had an exit rate slightly higher than their entry rate despite the relatively high salaries in these fields. In this case, the entry rate is lower than might be expected mainly because employers fill many job openings in these occupations by hiring recent college graduates rather than by promoting employees.

In each of the major groups, the data for some detailed occupations were atypical. For example, although administrative support occupations as a whole experienced a net outflow, workers were more liketly to advance into jobs as office suppervisors, computer operators, production coordinators, and insurance adjusters, examiners, and investigators than to advance from them. In the operator group, the same was true for motor vehicle operator supervisors, industrial truck and tractor equipment operators, and production inspectors, checkers, and examiners. Although there was no net change in sale occupations as a whole, the number of workers who advanced in their employing organization from cashier to a better job was more than three times the number who advanced to cashier from a lesser job.

Generally, occupations that had high entry rates had low exit rates and vice versa. However, some occupations were entered and left by roughly the same number of workers. These occupations included administrators and officials, public administration; underwriters and other financial officers; investigators and adjusters, except insurance; traffic, shipping, and receiving clerks; and supervisors, food preparation and service. Many of these occupations provide lower-to mid-level jobs that employees pass through on their advancement paths.

Those Who Stay, Those Who Switch

The characteristics of workers who stay with their employers differ somewhat from the characteristics of those who change employers. Differences include earnings, age, tenure with the employer, education, and occupation. Compared to workers who changed both occupation and employer, those who stayed with the same employer were more likely to earn higher wages in their new occupation. They also tended to be older, have more tenure with the employer, and be better educated. Workers staying with their firms were also more likely to enter occupations in such groups as executive, administrative, and managerial; professional specialty, or precision production, craft, and repair.

About 77 percent of the persons who voluntarily switched their occupation and stayed with their employer reported receiving higher pay, compared to 69 percent of the persons who changed both occupation and employer. Workers who reported lower pay in their new jobs represented only 6 percent of those who stayed with their employer, but almost 14 percent of those who made a dual change.

While age and tenure decrease the probability of a voluntary change in occupations overall, they increase the probability that it will occur inside rather than outside the firm. Only 17 percent of all workers ages 16 to 19 who advanced occupationally did so within their organizations, compared to 30 percent of those ages 20 to 24, and 41 percent of those ages 25 to 29. The pattern was similar when years of tenure in the worker's previous occupation were considered--the longer the tenure, the more likely the occupational change took place within the firm.

Education also increased the likelihood of occupational advancement occurring inside the employing organization. Almost one-half of all college graduates who advanced occupationally stayed with their employers, compared to less than two-fifths of the high school graduates, and only one-fourth of the workers who had fewer than 4 years of high school. Recent completion of education or training programs were linked to voluntary occupational shifts in some cases. Employer training programs had been completed since January 1986 by almost 16 percent of the workers who changed only their occupation, compared to 8 percent of those who changed their employer too.

Although persons who remained with their employers represented less than 39 percent of all workers who voluntarily changed occupations, they made up almost 55 percent of those who switched to executive, administrative and managerial occupations, the largest proportion of any occupational group. The proportion was even greater for some detailed occupations in the group, including marketing, advertising, and public relations managers (89 percent); wholesale and retail buyers (65 percent); and financial managers (63 percent). Many employers encourage employee loyalty and limit turnover by trying to fill managerial positions from their staff of experienced workers. Moreover, these positions frequently require training and knowledge specific to the firm, which few applicants from the outside posses. For similar reasons, a higher than average proportion of individuals who voluntarily switched to professional specialty occupations and precision production, craft, and repair occupations made these changes without leaving their employers. Among these two groups, the workers most likely to have reached their jobs through inside advancement were computer systems analysts and production supervisors.

Only 26 percent of the workers who switched to a job in a service occupation stayed with their employer. Although many service occupations require particular skills, relatively few require firm-specific knowledge and training, and thus jobs usually are filled from outside the employing organization. The same can be said for operators, fabricators, and laborers--only 30 percent of the workers who voluntarily switched to an occupation in this group did so without changing their employer. However, the proportion was relatively higher among production inspectors, checkers, and examiners (58 percent), and industrial truck and tractor equipment operators (52 percent).

The Impact of In-House Advancement

Employees who move up in their organizations by changing occupations fill job openings that otherwise might be offered to the unemployed or jobseekers from other firms. The impact of in-house advancement can be shown by comparing the number of workers who voluntary entered an occupation from within their organization to the total number of entrants to the occupation.

In addition to the almost 10 million workers who changed occupations between January 1986 ad January 1987, almost 9 million other persons who were not working in January 1986 found jobs, bringing the total number of occuptional entrants to almost 19 million for this 12-month period. Of the total entrants, 2 million or an average of only 11 percent, had voluntarily changed from other occupations in their organization. As table 3 shows, however, this average was greatly exceeded in many supervisory and managerial occupations. For example, 50 percent of all individuals who became supervisors of mechanics and repairers during January 1986-87 had moved up from other occupations inside their firm. Employees who advanced inside also represented almost one-half of the workers who entered jobs as production occupation supervisors, computer systems analysts and scientists, general office supervisors, and financial managers. In contrast, employees who advanced inside represented less than 5 percent of the workers who entered jobs as cashiers, nursing aides, and janitors.
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Author:Carey, Max
Publication:Occupational Outlook Quarterly
Date:Dec 22, 1991
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