People are quitting their jobs at a record rate not seen since the start of the world wide web in the 1990s, or the internet bubble, a recent Labor Department report revealed. Confidence in the labor market is among the motivations for this now-common movement, analysts say.
The latest Job Openings and Labor Turnover Survey, for July, showed that the number of workers who voluntarily quit increased by 300,000 to 3.6 million.
That left the “quit rate” at 2.4 percent, the highest in just more than 17 years.
Job openings reached 6.9 million, with a rate of 4.4 percent. These openings increased in finance, insurance and manufacturing, and decreased in retail, education and the federal government.
While the number of job openings did not significantly change from the figures in the previous report, there are still more jobs available than there are unemployed individuals.
Why people quit
Economists often use the quit rate as a measure of the job market, and they believe numbers demonstrated in the JOLT report indicate that the economy is booming.
“When the economy is good, people quit when they feel confident they can find another job,” said Eric Hayes, research analyst with the Los Angeles County Economic Development Corp.
Many are in search of something more suitable, one factor being higher pay. A way out of poverty due to the high cost of living is among the motivations, Hayes added.
Age also comes into play when analyzing the quit rate, he said.
“Millennials (individuals born between 1981 and 1996) are much more likely to think of a career regarding ‘job hopping,’” Hayes said, “where you learn something, get the skills and jump to something else.”
Jeffrey Forrest, vice president of Economic Development at College of the Canyons, said job hopping is notably higher in manufacturing in the Santa Clarita Valley.
“One of the (contributing factors) to this is low starting salaries for manufacturing jobs,” he said. “But this is no longer alarming because employers realize this is normal. People are there for a year at most, get their experience and then switch to a higher-paying job.”
This trend is toward individuals looking to have multiple careers over their lifetime, rather than jobs, where skills are translated from one field to the other.
“As this has become more commonplace, it has also become more accepted as the new norm by younger workers,” said Holly Schroeder, president and CEO of the Santa Clarita Valley Economic Development Corp.
With more job openings in higher-paying jobs, said Tyler Laferriere, a research analyst with LAEDC, more people start to question, “Should I quit and take another opportunity?”
Workers who do not feel appreciated by their employers or do not see a future in the field also question whether to quit their jobs, which Forrest said is particularly true of younger generations.
Human resources professionals have found this trend cycles until about one’s fourth job, the one they settle in, Laferriere said.
What the quit rate might bring
With a rise in the quit rate, research analysts believe wage gains could accelerate as it may push employers to offer higher pay and benefits.
For those switching jobs, a high rate might mean more competition among workers. Laferriere suggests that those planning to leave a job should have a plan.
“Anyone quitting a job to find a better one or go to school or any other option should be prepared,” he said. “Have an idea of where to go next.”