2020 was a very good year for the managerial and administrative class

The latest occupational data suggests that bureaucracy's footprint in the US economy has never been greater.

One useful indicator of the prevalence of bureaucracy is the number of employed managers and support staff (e.g. HR, Finance, Compliance).  In a bureaucracy, it's the managers who get to make key decisions and coordinate activities, while support function administrators run processes (e.g. performance management, budgeting), set policies, and enforce standards.

In Humanocracy, we show that the ranks of management and administrators in the U.S. have inexorably increased over time, outpacing employment growth in all other occupations.  The persistence of this trend would have surprised renowned thinkers like Peter Drucker, who back in 1988 predicted that within two decades the average organization would have slashed the number of management layers by half and shrunk the number of managers by two-thirds:

The Coming of the New Organization
The typical large business 20 years hence will have fewer than half the levels of management of its counterpart today, and no more than a third the managers. In its structure, and in its management problems and concerns, it will bear little resemblance to the typical manufacturing company, circa 195…

I was curious to see what effect the pandemic had on this trend, so I updated the time series with 2020 data (courtesy of the Bureau of Labor Statistics and their Current Population Survey).  Here's the revised chart:

Employment in managerial and administrative functions  is currently at September 2019 levels.   Employment for all other occupations is now at February 2014 levels.  And if we back out professional occupations (e.g., engineers, teachers, doctors) from the  "all other occupations" bucket, employment levels are below January 2010 levels.  (That's not a typo.  Below January 2010 employment levels, in December 2020).  

Another way to think about this is in terms of the ratio of managers and administrators to all other employees.  In 1983, there was a manager or administrator per 7.4 employees.   It ended 2020 at 4.5, lower than it ever was prior to 2020.

Now, there are good reasons to expect that the relative growth in occupations outside of management and support functions will rebound in the coming months as the pandemic subsides (we're seeing some of this among professionals, though some doubt that all frontline work will come back given that COVID accelerated investments in automation).  But judging by the current occupational mix, bureaucracy's footprint in the US economy has never been greater.  And if you’re familiar with our arguments about the debilitating effects of bureaucratic organizations, you will know why we don't consider this to be a particularly good sign-for employees, organizations, and the overall economy.

A technical note: there are limitations in the Current Population Survey (CPS) data used in the charts above. For instance, there may be "grade inflation" in  management employment estimates because that information is self-reported, first-line supervisors are not counted as managers, and not all the jobs in the "support staff" occupations are corporate admin (while others, like corporate lawyers, are counted in the "professional" categories).  We handle and adjust for these issues in the estimates that appear in the book (if you want to dig into the methological details of it all, please consult Appendix B).  That said, the general trend remains the same even after making the adjustments.