by Ben Horwitz, Communications Director, JobGiraffe
On the first Friday of every month we are all reminded of the most well known economic measurements: job creation, unemployment, wage growth, etc. These reports give us a glimpse into the well-being of the US Economy. Buried in these numbers is a wealth of information relevant to everyone, but especially valuable to individuals in the recruiting and staffing community. Today I’d like to introduce you to one of these figures: the “quits rate.” (The quits rate is measured in the monthly Job Openings and Labor Turnover Survey, or JOLTS Report)
The quits rate is defined by the Bureau of Labor Statistics as the “number of quits during the entire month as a percent of total employment.” In short, the quits rate measures how many workers voluntarily leave their job in a given time period. Typically, people leave their current position when they are fairly confident that they can find a new or better one. Therefore, a growing quits rate is often an indicator of a strengthening labor market with more choices for workers.
How has the quits rate changed in recent years? Well, it’s growing, which is consistent with a labor market that is slowly but surely gaining strength. At the end of 2015 the national quits rate stood at 2.1%. In 2013 and 2011 it was 1.7% and 1.5% respectively. In 2009, in the depths of the Great Recession, that number stood at a dismal 1.3%. In order to find a quits rate as robust as today’s one would have to back over a decade to 2004, well before the recession.
So why is this important to recruiting and staffing professionals? In short, if the quits rate is high, there are likely to be more highly placeable/employable job seekers on the market, because applicants with recent work experience are often the easiest to place. However, it also means that we must work harder to find candidates the right position, one that goes beyond meeting their most basic requirements, and offers them a chance to feel fulfilled, have opportunities for growth and love what they do. Because if we don’t, the data show that they will be less afraid to walk away from that position and find a new opportunity. Therefore, the high quits rate is something that every recruiting and staffing professional should be aware of, and take into account in their work.
*As a percentage of total separations – including “involuntary” separations (i.e. layoffs and firings) – the numbers are 60% for 2015, 59% for 2013, 49% for 2011 and 41% for 2009, which is consistent with the overall trend towards higher voluntary separation or “quits.”