Look who got promoted! (No, it’s not mom or dad)

As Gen Z ages into management, it’s outpacing Baby Boomers

In four short years, Gen Z —people born between 1997 and 2012 — grew its footprint in the workforce at a rapid pace. Its share of total time worked has more than doubled since 2019. Its members now account for more than a third of all hires and 16.8 percent of the total workforce, according to ADP payroll and HR data analyzed by the ADP Research Institute.

As members of this generation make their mark, employers are studying their preferences and working styles, trying to anticipate what opportunities and challenges they might bring.

But how time flies.

The oldest members of Gen Z turn 27 this year. That means employers need to think beyond this generation’s entry into the workforce and consider how Gen Z will manage the workforce of the future.

Gen Z workers are moving into management— fast

Compared to their share of the total workforce, Gen Z’s share of management is growing even faster, from less than 1 percent of total manager months worked in 2019 to 3 percent in 2023.

Three factors drive Gen Z’s rapid ascendance.

1. Employers promoted Gen Z workers into management 1.2 times faster in 2023 than in 2019. For the past three years, employers promoted Gen Z into management as often as Baby Boomers (born between 1946 and 1964).
2. Not only are Gen Z workers moving into management, more of them are staying there. Employers promoted Gen Z managers into higher positions 1.8 times as often in 2023 as they did in 2019.
3. Gen Z’s share of workers hired directly into management roles with direct reports has more than doubled since 2019.

Despite the rapid growth of Gen Z managerial promotions and hiring, Gen Z workers accounted for only 13.9 percent of managerial hires in 2023 and made up only 3 percent of the managerial workforce. The vast majority of Gen Z hires in 2023—nearly 98 percent—weren’t managers.

And Gen Z’s largest share of the workforce is among non-managers, where they accounted for 19.5 percent of all months worked in 2023, up from 9.1 percent in 2019.

Gen Z catches up to Baby boomers

When a worker moves up the managerial ranks from one month to the next, we call that a managerial promotion. In each period, we measure how often employers promote workers (the managerial promotion rate) by dividing the number of managerial promotions by the total number of months that workers were both employed and subject to a potential promotion.

Millennials (born 1981 to 1996) and Gen X workers (born 1965 to 1980) are at an age when they’re entering or in mid-career, so it’s no surprise that they’re promoted into management more often than their younger Gen Z peers.

As Gen Z workers ascend, however, their advancement catches up to another group: Baby Boomers. The rate of promotion into management among Baby Boomers has fallen by 30 percent since 2019. For Gen Z workers, it’s grown by 20 percent.

The growth of Gen Z’s rate of promotion into management is also faster than for all other generations. They’re the only generation that employers promoted into management more often in 2023 than 2019.

Although employers promote Gen Z into management as often as they do Baby Boomers, the story is different for promotions among workers who already manage people. Baby Boomer managers who have direct reports are promoted far more often than their Gen Z counterparts.

Still, for Gen Z managers with direct reports, the growth in promotion rates has outpaced that of older generations. And that growth has remained steady for Gen Z managers even as it has decelerated for other generations.

One reason Baby Boomer managers get promoted more often than Gen Z is that they tend to hold jobs with stricter requirements than Gen Z.

In our May 2023 issue of Today at Work, we show that the chance of winning a managerial promotion within two years is higher in jobs with strict education, experience, and training requirements.¹As measured by Occupation Information Network (O*NET) Job Zone.

For example, 34.1 percent of Baby Boomer managers with direct reports hold jobs that require extensive preparation – meaning a graduate degree or equivalent training and experience – compared to only 7.3 percent of Gen Z managers.

In contrast, 34.7 percent of Gen Z managers with direct reports hold jobs that require only some preparation, meaning vocational school or equivalent training and experience. Only 7.9 percent of Baby Boomer managers hold such jobs.

Another reason Gen Z managers with direct reports get promoted less often than Baby Boomers is that nearly half of them work in two industries with comparatively low career development opportunity: Leisure and hospitality, and trade, transportation, and utilities.

Less than a quarter of Baby Boomer managers with direct reports work in those two industries.

Rapidly rising recruitment of Gen Z managers contributes to their ascendance

One way to grow Gen Z as a share of the managerial workforce is to promote current Gen Z workers into management. Another is to hire Gen Z workers directly into management roles. If Gen Z makes up a larger share of new managerial recruits than they do of current managers, their numbers in management will grow.

That’s exactly what happened during the last five years.

In 2023, Gen Z made up 13.9 percent of workers hired directly into managerial roles with direct reports – that’s 4.6 times their 3 percent share of all such managers (including new hires) that year.

The effects of a cooling job market

Although Gen Z’s share of the managerial workforce and managerial hires rose steadily into 2023, the share of Gen Z who are hired as managers flattened.

More members of Gen Z were hired as managers with direct reports in 2021 than during the peak pandemic year of 2020. Yet that cohort grew by only one-tenth of a percentage point in 2022. By 2023, 1 percent of all Gen Z hires were managers with direct reports, roughly the same as the previous year.

The flattening trend coincides with a cooling of the labor market in 2023 that left Gen Z workers (and everyone else) with fewer job opportunities than they had during the Great Resignation of 2021.

Gen Z, meet the boss: Gen Z

In December 2023, 1.8 percent of U.S. workers²For whom we knew the birth year of both manager and direct report. reported to managers who were members of Gen Z. Among workers who are part of Gen Z, the share reporting to Gen Z managers is more than three times larger.

Still, only 5.8 percent of Gen Z workers have Gen Z managers.

The takeaway for workers and their employers

Gen Z’s share of the workforce grew rapidly in the past four years. That’s especially true for management as Gen Z workers accumulated skills, credentials, experience, and connections.

Here’s what it means for employers:

• Prepare for a demographic shift in management. Employers should consider the implications of Gen Z’s ascendance for compensation strategy, employee relations, team dynamics, and public policy. Gen Z workers make up a minority of managers, but they already account for more than 1 in 10 managerial hires.
• Don’t overreact. Although Gen Z workers are a growing presence in management, they still make up a minority share. If training programs, recruiting strategy, and employee relations are too closely tailored to Gen Z preferences, they might overlook other workers. Heavy-handed catering to Gen Z—especially when based on mistaken perceptions—might alienate members of the very generation you’re trying to welcome.
• Be mindful of how different generations perceive one another. Judging from our promotion rate findings, it wouldn’t be surprising if someone from the Baby Boomer generation felt resentful watching younger coworkers from Gen Z get promoted into management as often as they do. On the other hand, a manager from Gen Z might feel resentful watching their Millennial, Gen X, and Baby Boomer coworkers moving up the ranks faster than they do. But it also wouldn’t be surprising if other people in these situations felt no resentment at all. Intergenerational conflict is as old as time. But so is intergenerational cooperation. Build a company culture that fosters more cooperation than conflict.

What these trends mean for workers:

• Prepare for the demographic shift in management, too. As your career progresses, no matter when you were born, more and more of the managers you encounter will be from Gen Z.
• Younger members of Gen Z should modify expectations in a cooling labor market. Born after 1996 and applying for a managerial role? Reach for the stars! But the flattening trend in the share of Gen Z who are managers suggests that it might be more difficult to land that position now than it was.

Methodology

The ADP Research Institute examined the speed at which Gen Z workers entered management ranks over the past four years. We look at the factors driving that growth and consider what the trend means for workers and their employers.

To shed light on how quickly Gen Z moves into management and why, we turned to ADP payroll and HR data representing 865 million months of work done by 49 million people at more than 95,000 employers in the United States between January 2019 and December 2023.

We sorted workers by generation according to their birth year.³We use Pew Research Center definitions of generations. For each month someone worked, we know their managerial level⁴We measure managerial level from the direct reporting structure of an employer along with managerial terms in the job title. and job requirements⁵We measure job requirements by mapping the job titles entered by company personnel to Occupational Information Network Standard Occupation Classification (ONET-SOC) codes, and then mapping ONET-SOC codes to their O*NET Job Zone, which is an ordinal measure of the amount of education, related experience, and on-the-job training required to do the job. along with the industry⁶Specifically, we match employers to their North American Industry Classification System (NAICS) Industry Supersector. of their employer. Using this data, we count the number of months worked by a generation at a particular managerial level in an industry, and the number of workers who get promoted into higher managerial levels from one month to the next. We know whether workers are manager with direct reports, or if they are managers without direct reports but with managerial terms in their job title.