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 October 2021—and of particular interest recently has been data on employee quit rates. In September, workers left their jobs at a record-high level of 3%, as the US economy continues 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, offers insights into how these trends are evolving in real-time, through the end of November, and at a level of detail not available in public statistics – in particular, by age group, gender, and geography.
- Quits to Remain at Record Levels: Among workers at businesses on Gusto’s platform, quits edged down for the third month in a row after August’s series high of 5%. The quit rate stood at 3.6% in October 2021, and at 3.4% in November. While below the summer highs, these numbers are still above last year’s rate of 2.7% in November 2020 – suggesting the JOLTS numbers are likely to stay at or above their record levels in the months to come.
- Quits Still Driven by Women: The gender gap in quits rate continues, as women leave work at consistently higher rates: in November 2021, 3.73% of women quit their jobs, compared to 3.1% of men – a gender gap of 0.63 percentage points.
- Personal Services Hit Hardest: 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 search for other opportunities amid a continuing epidemic.
- Quits Highest in Midwest, Lowest in Northeast: In November, workers were quitting their jobs at the highest rate in states in the upper Midwest – including Idaho (5.3%), Montana (4.7%), and Iowa (5.9%). The lowest quits rates were seen in the Northeast, including in Vermont (2.31%), New Hampshire, and Massachusetts (both 2.67%).
- Quit Rates Correlate to Vaccination Rates: Concerns over health are driving service-sector quits–state-level COVID case rates and adult vaccination rates are powerful predictors of quits rates in the personal services sector, suggesting workers in these customer-facing jobs are continuing to put their health at the forefront of their career decisions. On average, states in the 75th percentile of vaccination rates (63%) are experiencing service-sector quit rates that are 0.5 percentage points lower than states in the 25th percentile (52%) of vaccination rates.
- Average Bonus Size Triples: To counter these departures, small businesses have been offering financial incentives at a rate not seen in a recent November: on Gusto’s platform, 14% of all paychecks included a bonus, compared to 11% in November 2020 – and the average size of that bonus has more than tripled, from an average of $552.06 in November 2020 to $1,674.78 in November 2021.
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 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 November were seen in Accommodations (7.7%), Food & Beverage (7.0%), and Facilities (7.1%). This is the third straight month these sectors have experienced the highest quit rates, which reflects an economy-wide shift 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 quit rate in November 2021 across the US, and Figure 4 features states with the highest quit rates over the past three months – September to November 2021. These rates are highest in the upper midwestern US, where COVID cases have remained high—including Idaho, North Dakota, Nebraska, and Iowa. Data for all available states is presented in this appendix of this post.
Figure 3: Quits by State, November 2021
Figure 4: Quits Rate by State, Past 3 Months
Correlating Quits and Public Health
We can use this geographic variation to investigate what is driving these record-high quit rates in service-sector jobs. Figures 5 and 6 plot state-level quit rates in the personal services sector against two such measures of public health: a state’s 7-day average COVID-19 case level (cases per 100,000 people) and the percentage of each state’s adult population fully vaccinated – both statistics come from the New York Times Coronavirus in the U.S. dashboard as of November 30. Figure 5 shows a strong relationship between a state’s COVID case level in November and that state’s service-sector quit rate in November. Moving from a state in the 25th percentile of cases (16 cases per 100,00) to a state in the 75th percentile of cases (44 per 100,000) is associated with an increase in quits of 0.25 percentage points. Michigan, for instance, has experienced rapid case growth recently, now at 148 cases per 100,000 and likewise has one of the highest service-sector quits rates, at 4%. On the other hand, Washington has experienced relatively low cases recently (57 per 100,000) and also has one of the lowest quits rates, at 3.6%. One notable outlier in this relationship is New Hampshire, which had quite high case levels in November, but also among the lowest quit rates, which may be because New Hampshire has among the highest vaccination rates – a relationship we explore next.
Indeed, Figure 6 shows a similarly strong relationship between a state’s adult vaccination rate as of the end of November and that state’s November quit rate. Each additional percent of adults vaccinated in a state is associated with a decline of 0.04 percentage points in the state’s quit rate in personal services sectors. On average, states in the 75th percentile of vaccination rates (63%) are experiencing service-sector quit rates that are 0.5 percentage points lower than states in the 25th percentile (52%).
Figure 5: Quits Rate by State and COVID-19 Case Levels, November 2021
Figure 6: Quits Rate by State and Percent of Adults Fully Vaccinated, November 2021
Taken together, these data points show areas that have seen the highest COVID cases recently and some of the highest quit rates in service-sector jobs. Gusto research has previously found a tight link between the economic recovery this summer and the public health recovery – and the situation is playing out no differently during this Great Resignation. As the pandemic continues, workers in front-line, customer-facing positions are putting their physical health at the forefront of their employment decisions, and we likely will not see robust growth in these sectors until public health measures improve.
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 narrowed since then, but stood at a 0.81 percentage point gap in October and 0.64 percentage point gap in November.
Figure 7: 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 8 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. 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 November (9.6%).
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 quit rates among these workers has driven the increase to a greater degree than the recent increases among teenagers.
Figure 8: Quits by Age Group
In order retain talent, we have seen small businesses resort increasingly to offering financial incentives to employees through the use of bonuses – both the prevalence and size of bonuses increased in the spring, amid worker shortages as businesses begin to expand, and they are increasing once again as businesses try to stem the flow of workers to other jobs. On Gusto’s platform, 14% of all paychecks included a bonus, compared to 11% in November 2020 – and, as shown in Figure 9, the average size of that bonus has more than tripled, from an average of $552.06 in November 2020 to $1,674.78 in November 2021.