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Partnering with a more human resource

Bloomberg’s Data for Good Exchange: Using Big Data for the Public Interest

Ahu Yildirmaz, Ph.D. Vice President, ADP Research Institute

In America’s dynamic, complex labor market, a clear understanding of economic data is critical to providing policymakers and business leaders with actionable insights. This theme was central to the discussion at Bloomberg’s Data for Good Exchange, an annual conference highlighting the application of data science for public good. With widely-read reports sourced from the payroll data of more than 24 million American workers, ADP was uniquely positioned to discuss how we use our data for good.

We already know that big data is revolutionizing the corporate world. Here at ADP, big data allows us to provide better services to more customers, but in the public sphere and non-profit sectors, we’ve yet to fully realize the impact of big data. Sunday’s event featured a lively discussion among fellow researchers, academics, policymakers and NGOs about the role big data can play in better governance.

One area in which ADP data can help to fill in these gaps is understanding the dynamics behind wage growth. It is often said that wage growth has been the missing ingredient for full economic recovery. But until 2014, the country lacked a comprehensive, single report on economic indicators including wage growth, employment hours and turnover. That’s why the ADP Research Institute decided to analyze its payroll numbers to create the Workforce Vitality Report, a comprehensive, quarterly measure of U.S. workforce dynamics that looks at key labor market indicators, such as employment growth, job turnover, wage growth and hours worked. The Workforce Vitality Report provides an exceptional look at wage growth because it tracks the actual wages of individual workers over time. Unlike other data sets, ADP data allow for calculating wage growth of individual workers to avoid the muddiness created by various workplace dynamics as new workers are hired, older ones retire, and the mix of workers changes between full-time and part-time. Digging even deeper, we can pinpoint specific activity by looking at individual workers by region, industry, age, gender and full-time or part-time status. These cross-cuts allow us to observe how certain groups are performing in relation to one another across the labor market.

Our most recent Workforce Vitality Report showed that overall employment rose in the first quarter of 2016 – and wages are beginning to pick up momentum. Full-time job holders grew their wages by 4.6 percent in the first quarter, while full-time employees who switched jobs saw their wages jump 6 percent.

There is no organization in the country with the data necessary to deliver insights into the health of the labor market with the depth and accuracy that ADP has. And here at ADP, we understand our responsibility to use this data for good. Through releasing reports like our Workforce Vitality Report, ADP is providing policymakers, business leaders and U.S. citizens the data necessary to plan for the economic future. Findings like these play a critical role in economic policy discussions like those taking place at the Federal Reserve, which impact everyday Americans.

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