PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The High “Quits Rate” and Small Business

By at 13 November, 2021, 9:27 am

by Raymond J. Keating –

The latest “Job Openings and Labor Turnover” report from the U.S. Bureau of Labor Statistics (BLS) served up an interesting trend that warrants attention.

While job openings and hires on the last day of September showed little change from the previous month, the quits level and rate reached series highs. As noted in the BLS data, about 4.4 million workers quit their jobs in September 2021.

As SBE Council has explained before, quits are widely considered to be an indicator of confidence among workers in terms of the labor market, or where the labor market is headed. So, a high quits rate (which reached a record high 3% in September) reflects the reality or confidence that another job has been secured or is available.

As noted in the following two charts, again, the quits level and rate have hit all-time highs in a data set that goes back to the end of 2000.

Source: Federal Reserve Bank of St. Louis, FRED

Source: Federal Reserve Bank of St. Louis, FRED

Combine these quits facts with hot inflation and millions of people still not back in the labor force, and the challenges for businesses – especially small enterprises – in terms of being able to attract, meet the compensation demands of, and keep quality employees become more and more difficult.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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