US Labor Market Cools as Workers Stop Job-Hopping
The US labor market is showing signs of stabilization as the rate of voluntary job quitting approaches pre-pandemic levels and employers implement better retention strategies.
Job Volatility Declines as More Americans Stick to Their Positions
The rate at which American workers voluntarily resign has been declining, indicating a cooling labor market, as per data from the US Labor Department. The quitting rate dropped from 3% in April 2022 to 2.5% in May 2023, a level slightly higher than the pre-pandemic figure. Meanwhile, hiring remains robust, with an average of 314,000 jobs added per month up until May. However, uncertainty in the broader economy has made some employees, like Julius Maupins, less inclined to job-hop. The slowdown in voluntary resignations could be seen as reflecting easing demand for workers and possibly a decrease in employee confidence in finding better opportunities.
Increased Benefits Promote Retention and Job Satisfaction
In response to higher resignation rates during the pandemic, companies like Veritiv have boosted employee benefits to improve retention. Offering perks like more vacation days, additional parental leave, profit-sharing bonuses, and even trialing a four-day workweek, these strategies seem to be effective in reducing turnover rates. The labor market appears to be moderating, with individuals who have seen substantial pay raises, like pilot Jason Crane, expressing intent to remain in their current roles. However, some sectors like food service still experience high quit rates, prompting initiatives to restructure training programs to mitigate staff departures.
Source: The Wall Street Journal