Do you know what the best day of the month is for workforce trends and labor market geeks is?
Of course you do - when the monthly JOLTS (Job Openings and Labor Turnover Survey) report is released by the Bureau of Labor Statistics!
That great day was yesterday, and in what has become a semi-regular feature on the blog over the years, I want to share just one chart from the latest JOLTS report, and as you DEMAND, offer some free (cheap!) comments on the data.
First the chart - this one showing the amount of 'Quits', (voluntary separations), vs. the level of 'Layoffs and Discharges' (non-voluntary turnover), for the US labor force.
Some quick takes from the 'Take this job and you know what with it!' vs. the 'Clean out your locker and scram' trends:
1. Consistent with the longer term and pre-recession trends, 'Quits' are now exceeding 'Layoffs' by about a 2/1 ratio. Back in 2006, you could expect 2 folks to quit for every 1 who you had to fire (or layoff). Halfway into the last recession, (and for some time after), Layoffs surpassed Quits, as no one in their right mind wanted to quit their job with the chances of finding another one being so dicey.
2. Obvs, the return to a more 'normal' and historical 2/1 Quits/Layoffs ratio puts much more pressure on HR, recruiters, business leaders - essentially anyone whose job depends on having the needed people in place, and not looking to leave for the next, better opportunity at the drop of a hat. The same drivers that are making the Quits rate climb, (perceived labor market leverage, lots of openings across the country, rising wages), also tend to depress the 'layoff/discharge' rates. Do you really want to can that marginal performer if you are not at all sure you can find a better replacement in a timely manner?
3. Finally, what might be the most valuable take away from looking at the overall labor market Quits/Discharges ratio is that it (should) force us to think about this ratio in our own organizations, and what we think might be the optimal or healthy ratio for us. We probably would rather exist in a world where there were not all that many quits and certainly not all that many firings or layoffs. But that ideal world rarely exists, and even if it did, would it be perfect?
Said differently, there probably should be some tension and some churn in our organizations. The system/culture/workplace should weed out some folks who will self-select out. There should be some really talented folks that end up having/choosing to leave to chase some bigger dreams and goals that you might not be able to offer them the opportunity. And there should be some folks that you force out. The key may not be the absolute numbers of any of these categories, but the way these groups compare. If you are being forced to forcibly remove more folks that leave on their own accord, then you have a problem I would imagine. And if no one ever decides to leave on their own, you have a problem as well, albeit a different one.
Ok, that's it from me. Enjoy the JOLTS report like I know you will!