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A Real-Time Look at The ‘Great Resignation’

Luke Pardue Economist, Gusto 

Each month the BLS releases data on the labor market turnover in their Job Openings and Labor Turnover Survey (JOLTS) report. Today, the BLS release covers employment trends—hiring, terminations, and job openings in September 2021—and of particular interest this month will be data on employee quits rates. In August, workers left their jobs at a record-high level of 2.9%, as the US economy entered a period experts have termed the “Great Resignation.” New platform data from Gusto, the people platform serving over 200,000+ small and medium-sized businesses, can offer insights into how these trends are evolving in real-time, through the end of October, and at a level of detail not available in public statistics – in particular, by age group and gender. 

Key Findings

  • Among workers at businesses on Gusto’s platform, quits edged down for the second month in a row after August’s series high of 5%. In September 2021, the quits rate stood at 4.4% and in October 2021 it fell to 3.6%.   
  • The gender gap in quits rate also narrowed since a record-wide gap in August as both the Delta variant has waned and as children 5-11 years-old begin receiving vaccinations. In August 2021, the quits rate among women was 1.1 percentage points higher than men, the widest gap on Gusto’s platform since this series started in January in 2020. This gap has narrowed to 1 percentage point in September 2021, and then 0.81 percentage points in October 2021.    
  • Quits have been highest over the summer and fall in the personal services sectors—such as Accommodations, Food & Beverage, Sports & Recreation, and Retail—as workers in these sectors rethink their job opportunities post-pandemic.    
  • The significant jump in quits in August 2021 was partly driven by a sharp increase in teenage workers leaving summer jobs as school began. The rise in quits over the course of 2021, however, has been driven by a modest but continual increase in resignations by “prime-age” workers 25-54 years old, increasing from 2.8% in December 2020 to 3.6% in August of 2021.    
  • After reaching a series high this summer, Gusto platform data suggests that the JOLTS quits rate will not climb further, but will remain at historically high levels of 2.8% in September 2021 and 2.6% in October 2021. 

Overall Trends

First, Figure 1 plots the percent of workers voluntarily terminated (the “quits rate”) among companies using Gusto’s platform, by month, from January 2020 through October 2021. Mirroring public data, Gusto’s quits rate reached a series high in August of 2021 of 5%. Since that point, the quits rate has fallen to 3.6% in October 2021—similar to rates seen in June and July. Though a dip from the record highs, these rates are still elevated compared to last year, when the quits rate was 3.1% in October 2020.  

Figure 1: Quits Rate: All Workers

Quits by Industry

Figure 2 presents quits rates broken down by industry. Workers are leaving their jobs at the highest rates in service-sector businesses. The highest quits rates in October were seen in Accommodations (10.3%), Food & Beverage (7.7%), and Facilities (6.8%). This trend may partly be attributed to seasonal patterns as these businesses shrink headcount after the summer months, but also reflect economy-wide shifts underway, as workers leave service-sector jobs in search of job opportunities with more flexibility and higher pay.  

Figure 2: Quits by Industry

Quits Across the Country

Figure 3 plots the quits rate in October 2021 across the US, and Figure 4 features states with the highest quits rates over the past three months – August to October 2021. These rates are highest in the midwestern US, where COVID cases have remained high—including Montana, Iowa, Idaho, Indiana, and Kentucky.  

Figure 3: Quits by State, October 2021

Figure 4: Quits Rate by State, Past 3 Months

Quits by Gender

While public data does not break down quits rates by gender, on Gusto’s platform we can track such series. In August 2021, the quits rate among men was 4.4%, while the quits rate among women was 5.5%: that is a 1.1 percentage point gap in the quits rate by gender, the widest gap on Gusto’s platform since this series started in January in 2020. This gap has, however, narrowed to 1 percentage point in September, and then 0.81 percentage points in October 2021.

Figure 5: Quits by Gender

Quits by Age Group

Similarly, there are important differences in levels and patterns of quits across age groups, which aggregate data can mask. Figure 6 plots quits rates on Gusto’s platform by four age groups: those 15-19 years-old, 20-24, and 25-54 (“prime-age” workers), as well as those 55 and older. Several interesting patterns emerge: first, labor turnover is consistently higher among younger workers, who are more likely to work in hourly positions that follow seasonal patterns. The quits rate for 15-19 year-olds rose in August 2021 to 17.1% as a large share of teenagers hired this summer left work as the school year started. This rate returned to more normal levels in October 2021 (9.5%).

Second, we have also seen over 2021 a continual rise in quits among “prime-age” workers 25-54 years-old—from 2.8% in December 2020 to 3.6% in August 2021, before dipping slightly to 3.2% in September 2021. As “prime-age” workers 25-54 make up 68% of employees on Gusto’s platform (matching the 64% of the US workforce nationally), the more modest increases in quits rates among these workers has driven the increase to a greater degree than the recent increases among teenagers.          

Figure 6: Quits by Age Group

Using Gusto Data to Predict JOLTS

Finally, Gusto’s real-time data on labor turnover offers insights into how much-awaited JOLTS releases may unfold. As a simple predictive exercise, we predict the JOLTS total nonfarm quits rate one month ahead using the last month’s JOLTS release and the latest Gusto quits rate. Figure 7 presents Gusto’s (non-seasonally-adjusted) quits rate in orange, the JOLTS main seasonally adjusted series in blue, and the past few months of predictions using this model. 

With the release of September’s JOLTS report, this forecasting exercise suggests a quits rate of 2.8%—a slight decline from the series-high 2.9% in August 2021, but still an historically elevated level of quits. Looking two-months ahead, this model suggests another slight fall to 2.7% in October. It is worth noting that such an exercise comes with considerable uncertainty: we can say with a 95% confidence level that the September quits rate will come in between 2.4 and 3.2%.         

Figure 7: Predicting JOLTS Quits Rate

Updated: November 19, 2021

Luke Pardue
Luke Pardue Luke Pardue is an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He received his Ph.D. from the University of Maryland, where he studied the effects of government programs on disadvantaged populations' housing and labor market outcomes. Luke currently lives in Washington, D.C.
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