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As Businesses Seek to Ramp Up Hiring, More Workers Are Quitting

  • Workers quitting at an accelerated pace, further straining businesses that are facing difficulties in filling job openings
  • Leisure and hospitality, retail, and business and professional services are most likely to see departures
  • Different motivations at play, including workers deciding during the COVID-19 pandemic to make a career shift

Summary by Dirk Langeveld

As many businesses struggle to fill job openings, some are feeling additional pressure to maintain workforces as more workers quit.

Labor Department data from April shows that nearly 4 million people quit their job during the month, about double the number in April 2020. The “quits rate,” or share of employees voluntarily initiating their departure from a company, swung from a seven-year low of 1.8 percent at the height of the pandemic to a record high of 2.7 percent.

The quits rate is generally viewed as a measure of economic stability, as people are more likely to leave their job to pursue better opportunities if economic conditions are healthy. The COVID-19 pandemic has also created unique circumstances, with surveys showing that a significant share of people are considering whether to leave their job. Factors influencing the decision include reflecting on their current job and career aspirations during prolonged isolation, pursuing new jobs based on training or education completed during the pandemic, a desire to start a business of their own, or the pursuit of more flexibility and better work-life balance.

The Bureau of Labor Statistics’ Job Openings and Labor Turnover Summary for April finds that workers are quitting at the lowest rate in government and finance jobs, and at higher rates in leisure and hospitality, retail trade, and business and professional services. Workers were quitting in the greatest numbers in retail trade (up 106,000), professional and business services (up 94,000), and transportation, warehousing, and utilities (up 49,000).

The quits rate in the leisure and hospitality sector was 5.3 percent, including a 5.6 percent quits rate in accommodation and food service. The increased departure from this industry comes as it has been leading new job creation in recent jobs reports, and as restaurants try to fill a record 1.34 million openings.

Restaurant and retail workers have sometimes been spurred to leave their job due to low wages and frustrating customer interactions, including the necessity to enforce mask mandates during the pandemic. Businesses that have been struggling to find candidates have been responding by offering higher wages, sign-on bonuses, and other perks.

Businesses posted a record 9.3 million job openings in April, but hiring has been proceeding slowly as workers quit or retire early. Other factors have also been blamed for dissuading people from seeking a job, including child care needs, supplemental unemployment benefits, a lack of necessary skills, and continued fears of COVID-19.

Layoffs have been on the decline as companies try to retain the workers they have. Economists have also suggested that the higher churn rate can have long-term benefits as workers align with jobs that are more suitable for their skills and interests.

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