Worker Retention

Workers quit their jobs at record levels in August. Since January 2021, 30 million workers have quit their jobs.

Quits rate by industry

Dec 2000 - Aug 2021

Source: Bureau of Labor Statistics Notes: The quits rate is the number of quits during the entire month as a percent of total employment. Quits include employees who left voluntarily with the exception of retirements or transfers to other locations. Data is seasonally adjusted. Aug 2021 data is preliminary.

During 2021, more than 3 million employees have quit their jobs each month. August reached an all-time high of 4.3 million quits. The quits rate is highest in accommodation and food services (part of Leisure and hospitality) and retail trade (part of Trade, transportation & utilities) where wages are low and churn has historically been high.¹

The pandemic caused workers to rethink their options, with some upskilling to transition to higher-paying occupations. Generally speaking, workers are demanding higher wages and better working conditions.^2,3,4 The most challenging issue for employers is the overall drop in labor force participation since the pandemic (63.4% in Jan 2020 to 61.6% in Sept 2021). The ratio of people seeking employment per job opening fell to 0.8 in August 2021 — suggesting a labor market as tight as in January 2020.^5,6 This tight labor market is partly due to workers retiring early in larger numbers.^7,8 In addition, nearly 1.2 million parents reported being unable to look for a job due to disruption in childcare as recently as September 2021. Increasing the availability of quality, affordable childcare will be key to boosting the supply of workers (Child Care Disruptions).

Over the medium and long term, training and apprenticeships for increasingly digitized jobs will be essential as labor demand shifts away from high-contact, low-wage service jobs. Worker shortages have been particularly severe in some industries where substantial training is required, including health care and professional business services.

1. “Table 4. Quits levels and rates by industry and region, seasonally adjusted.” U.S. Bureau of Labor Statistics. October, 2021. https://www.bls.gov/news.release/jolts.t04.htm

2. “The truth behind America’s labor shortage is we’re not ready to rethink work”. Kaplan, Winck. Insider. May, 2021. https://www.businessinsider.com/labor-shortage-unemployment-benefits-america-reopening-rethink-work-employment-wages-2021-5

3. “ Many people don’t want to work unless it’s from home”. Molla. Vox. June, 2021. https://www.vox.com/recode/22543409/remote-work-from-home-jobs-supply-demand-hiring-platforms

4. “Customers Are Back at Restaurants and Bars, but Workers Have Moved On”. Haddon, Chen, and Weber. The Wall Street Journal. July, 2021. https://www.wsj.com/articles/customers-are-back-at-restaurants-and-bars-but-workers-have-moved-on-11626168601

5. “Economic Indicators: JOLTS”. Gould. Economic Policy Institute. October, 2021. https://www.epi.org/indicators/jolts/

6. “Civilian labor force participation rate”. U.S. Bureau of Labor Statistics.

   https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm

7. “For Some People, Working From Home Sped Up Their Decision to Retire”. Sullivan. The New York Times. July, 2021.

   https://www.nytimes.com/2021/07/09/your-money/pandemic-working-from-home-retire.html

8. “They Didn’t Expect to Retire Early. The Pandemic Changed Their Plans”. Schwartz, Marcos. The New York Times. July,

   2021. https://www.nytimes.com/2021/07/02/business/economy/retire-early-pandemic-social-security.html