The most recent data from the Bureau of Labor Statistics Job Openings (BLS) report and Labor Turnover Survey (JOLTS) report showed that the United States is still in the midst of an unprecedentedly tight labor market, with both the job-quitting rate and the number of job openings across the economy at near-record levels. In February 2022, the U.S. emerged from the latest wave of the COVID-19 pandemic with business owners resuming more normal levels of operations and workers returning to the labor force at a rapid pace.
Platform data from Gusto, the payroll and HR platform serving over 200,000 small and medium-sized businesses, offers insights into how both business owners and workers navigated this latest difficulty in real-time, through the end of February, and at a level of detail not available in public statistics – in particular, by age group, gender, and geography.
- The Great Resignation May Be Leveling Off: Among workers on Gusto’s platform, quits are approaching levels seen before The Great Resignation, after coming down from August’s series high of 5%. The quit rate stood at 3.5% in December, jumped to 3.7% in January, before falling to 3.1% in February. This latest quit rate is similar to the figures seen in prior Februaries (3.1% in 2020 and 2.8% in 2021), suggesting that the recent surge in quits may be leveling off.
- As Schools Re-Open, the Gender Gap in Quits Narrowed: The gender gap in quits widened in January, as women leave work at consistently higher rates: in January 2022, 4.12% of women quit their job, compared to 3.38% of men – a gender gap of 0.74 percentage points. In February, this gap narrowed to 0.68 percentage points, as schools reopened and as reduced caregiving responsibilities forced fewer women out of the labor force.
- Personal Services Hit Hardest: During The Great Resignation, quits have been highest in the personal services sectors—such as Accommodations, Food & Beverage, Sports & Recreation, and Retail—as workers in these sectors search for new opportunities amid a continuing epidemic. In February, quits were at their highest rates in Facilities (6.0%), Food & Beverage (5.7%), and Accommodations (5.5%). On the other hand, exactly the three industries with the highest quit rates over the past six months also saw the largest hiring rates: Accommodations (9.7%), Facilities (8.6%), Food & Beverage (7.5%), suggesting that workers are largely switching jobs within the same industry they worked in previously for a position with higher pay or better conditions.
- Quits Highest in Middle America, Lowest on Coasts: In February 2022, workers were quitting their jobs at the highest rates in Montana (5.1%), Alabama (4.7%), and North Dakota (4.3%); states with the lowest quit rates include Maine (2.2%), Connecticut (2.2%), and Rhode Island (2.1%).
- More Tenured Workers Join In on The Great Resignation: Before the recent surge in quits, in February 2020, the average length of time at which an employee held a position before quitting was four months. By February 2022, that average length of employee tenure had nearly doubled to seven months, driven by more tenured workers in Professional Services firms. While this surge in quits began with workers in Personal Services sectors, older and more experienced workers in Professional Services sectors are now finding their moment in this labor market.
Overall Trends in Quits
First, Figure 1 plots the percent of workers voluntarily terminated (the “quit rate”) among companies using Gusto’s platform, by month, from January 2020 through February 2022. Mirroring public data, Gusto’s quits rate reached a series high in August of 2021 of 5%. Since that point, the quit rate has fallen to 3.4% in November 2021, before rising to 3.5% in December 2021, 3.7% in January 2022, then falling to 3.1% in February 2022. This drop in February brought the quit rate more in line to figures seen in previous Februaries: in February 2020, the quit rate stood at 3.1%, and it stood at 2.8% in February 2021.
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 quit rates in January were seen in Facilities (6.0%), Food & Beverage (5.7%), and Accommodations (5.5%). This is the sixth straight month these three sectors have experienced the highest quit rates, which reflects an economy-wide shift underway, as workers leave their current service-sector jobs in search of job opportunities with more flexibility and higher pay.
Figure 2: Quits by Industry
One important question that follows this surge in quits is whether these workers are leaving work altogether, finding jobs in the same industry, or taking this time to switch occupations and industries altogether. While no data can fully answer this question, one data point suggests that, at the moment, The Great Resignation is driven by workers leveraging this tight labor market to find new jobs in the same industries.
Figure 3 plots the hiring rate over the past four months across industries, which shows that exactly the three industries with the highest quit rates over the past six months also saw the largest hiring rates: Accommodations (9.7%), Facilities (8.6%), Food & Beverage (7.5%). This data suggests that, rather than an outflow of workers from Personal Services sectors to Professional Services jobs or out of work altogether, we are seeing a great amount of churn in the labor market, where workers are job-switching within industries.
Figure 3: Hires by Industry
Quits Across the Country
Figure 4 plots a map of the quit rate in February 2022 across the US, and Figure 5 features states with the highest quit rates over the past four months – November 2021 to February 2022. These rates were highest in February in Montana (5.1%), Alabama (4.7%), and North Dakota (4.3%). The lowest quit rates were seen in Maine (2.2%), Connecticut (2.2%), and Rhode Island (2.1%). A full list of quit rates for all states is presented in this appendix of this post.
Figure 4: Quits by State, February 2022
Figure 5: Quits Rate by State, Past 4 Months: Top 20
Quits by Gender
While public data does not break down quits rates by gender, on Gusto’s platform we can track such a series. As displayed in Figure 6, 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 2020.
While this gap has narrowed since then, in January 2022 it expanded for the first time since August, reaching 0.73 percentage points (with a quit rate of 4.09% for women and 3.36% for men). As we explored in a last month’s report, this widening of the gender gap in quits was due in large part to school closures and other child care disruptions many households faced in January amid the Omicron wave. As this wave ebbed and child care disruptions lessened, the gender gap in quits narrowed once again in February – to 0.68 percentage points: 3.43% for women and 2.7% for men.
Figure 6: Quit Rates 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 7 plots quit 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. The decline in quits that has occurred since August across all age groups resumed in February 2022, after quits ticked up in January. The largest decline can be seen among 15-19 year-olds, with the quit rate for that group falling from 8.1% to 6.2% from January to February, likely due in large part to seasonal work dropping off.
Figure 7: Quit Rate by Age Group
Figure 8 breaks down the quit rate within prime-age workers into four detailed age bins: 25-34 years old, 35-44 years old, 45-54 years old, and 55 and older. There is a strong relationship between worker’s age and the rate at which they quit their jobs: 25-34 year-olds have the highest quit rate by a significant margin, with a quit rate of 3.5% in February 2022. Workers 35-44 have the next highest quit rate, at 2.3%. Workers 45-54 and those 55 and older have similar, and lower, quit rates, which stood at 2% in February 2022. The recent surge in quits, and the subsequent decline is most evident among the youngest group of prime-age workers, 25-34, which rose to 4.9% in August 2021, before falling to 3.5% in February 2022. Older age groups, on the other hand, exhibited much more muted increases, if any, with February 2022 rates mirroring those in the past.
Figure 8: Quit Rate by Detailed Age Group
Changing Tenure of Workers Quitting
Finally, in this report we explore one aspect of The Great Resignation that it is not possible to look at using publicly available data: the length of time an employee has worked in their position before quitting. A few questions we aim to address with platform data: Has The Great Resignation been driven by recent hires or more experienced workers, and how has this aspect of this trend evolved recently?
Figure 9 plots, for each month, the average and median length of time an employee quitting in that month has worked in that position (tenure). Just before COVID-19 pandemic started, in February 2020, a worker quitting their job in that month had worked in that position for an average of four months. By February 2022 that average length of time has risen to seven months. This change signals that, as The Great Resignation has continued, more experienced workers are joining the ranks of those leveraging this tight labor market to look for new opportunities.
Figure 9: Average and Median Tenure of Workers Quitting
In Figure 10 and Figure 11, we dive in to examine this trend both by industry group and by age group to investigate where these more experienced workers are coming from. Figure 11 plots the average tenure of workers quitting by both industry group and whether these employees were paid hourly or were salaried, and Figure 12 plots this average tenure of workers quitting by age group.
Two clear trends emerge about which workers are driving this increase in experienced workers leaving their jobs. First, as shown in Figure 11, the average tenure has increased most rapidly among salaried workers, particularly in Professional Services sectors, where the average tenure of a worker quitting has increased from 6 months at the beginning of 2020 to 11 months in February 2022. Second, as displayed in Figure 12, older workers (55+) have also seen the most significant increases in average tenure – but more experienced workers across all age groups are joining in on The Great Resignation. Taken together, these trends signal one important way in which The Great Resignation has transformed over the past several months: while the surge in quits among workers in Personal Services sectors, older and more experienced workers in Professional Services sectors are now finding their moment in this labor market.