Promotions Are at a 5-Year Low — What That Says About the Labor Market

Key Results

• Promotion rates have slowed after surging during the 2021-22 “Great Resignation”: The overall promotion rate was 10.3% in May 2025, down from a peak of 14.6% in May 2022. As a benchmark, during the relatively balanced labor market of 2019, promotion rates hovered around 12%-13%, at 10% promotion rates are now well below that. 
• Declines have been largest in the industries that had the highest promotion rates in 2022 – notably the technology sector. In general, the industries that had relatively high promotion rates in May 2022 saw the biggest slowdowns in promotion rates by May 2025.
• Promotion rates for workers aged 35 or older have been stable, while workers in their early 20s have seen the largest declines in promotion rates. It’s likely that younger workers benefited most from rapid promotions during the tight labor market of 2021-2022, and those workers are currently experiencing the largest normalization in promotion rates.  

Promotion rates have slowed sharply since peaking in May 2022

Annual promotion rates surged during the exceptionally tight post-pandemic labor market of 2021 and 2022 (the “Great Resignation”), but have since declined sharply. After peaking at 14.6% in May 2022, promotion rates economy-wide declined by 25% through May 2024 (10.7%). The slowdown has continued into 2025, with promotion rates touching a low of 10.1% in March 2025 before rebounding slightly to 10.3% in May 2025. As a reference point, the promotion rate in 2019 generally hovered between 12% and 13%.

The promotion rate has dropped across all major industries, but the decline has been largest in the technology industry

The promotion rate in the technology industry declined by 42% from 17.4% in May 2022 to 10.0% in May 2025. The Food and Beverage, Retail and Professional Services industries also saw large declines in promotion rates between May 2022 and May 2025. The Non-Profit, Healthcare & Social Assistance, and Agricultural sectors saw the smallest declines in promotion rates from May 2022 to May 2025.

In general, the industries that had relatively high promotion rates in May 2022 saw the biggest slowdowns in promotion rates by May 2025 – suggesting that during the tight job market of 2021 and 2022, some companies used promotions in addition to compensation increases as an incentive to retain employees. 

Promotions have declined most and are now below 2019 rates for younger workers

Promotion rates have slowed from the peak of the Great Resignation for all age groups, but they have slowed most for younger workers. For workers aged 35 or older, promotion rates are currently in line with 2019 rates, but they are below 2019 rates for workers under age 35. Among workers aged 25-34, about 14.5% of workers received a promotion in May 2025 compared to 16%-17% in 2019; among workers aged 20-24, 17% received a promotion in May 2025 compared to 22%-23% in 2019. 

It’s likely that younger workers benefited most from rapid promotions during the tight labor market of 2021-2022, and those workers are currently experiencing the largest normalization in promotion rates.  

Promotions among Individual Contributors have continued to slow even as promotions among People Managers have stabilized

From 2019 through 2023 promotion rates for Individual Contributor (IC) and People Manager employees followed similar trends, but they have begun to diverge recently. While the promotion rate for ICs has continued to decline since mid-2023 and is now about 20% below where it was in 2019, the promotion rate for People Managers has stabilized since the start of 2024 around 10% below where it was in 2019. As companies have cut back on the number of People Managers in recent years, it’s likely that there are fewer People Managers but that those who remain have large scope and responsibilities. 

(Note: Gusto data on People Manager versus Individual Contributor roles are current only through November 2024, due to reporting lags. The People Manager versus IC classification is based on responsibilities in their current role.)

Methodology

Promotions are identified in Gusto payroll records as instances when an employee experiences both a title change and a base compensation increase of 5% or more in a single month at the same employer.