Department of Labor October Trends magazine looks at worker turnover

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Above: “Job Application” by amtec_photos is licensed under CC BY-SA 2.0.

By DAN ROBINSON/Department of Labor

Labor shortage raises retention stakes

The mismatch between the numbers of job seekers and open positions has made retaining good employees both more important and harder in recent years.

Recruiting people takes more time and energy, and employees have the leverage to
ask for more, knowing that if their current employer doesn’t offer what they want, a new one probably will.

To help identify what makes people likely to stick with a certain type of work, although not necessarily for the same
employer, we estimated annual turnover percentages for select Alaska occupations in 2022 and ranked them from high to low, as shown on the next page.

(See the sidebar on page 7 for methods.)

Wages clearly matter — the higher an occupation’s wage, the lower its turnover tends to be — but they’re not the only thing that matters.

Some occupations have higher-than-expected turnover given their relatively high wages, and some have less turnover than we’d expect with their lower wages.

Another twist is that while some workers leave a job because they want to do something different, some want to keep doing the same thing but for someone else.

The chart doesn’t capture those movements, but we’ll talk more about them below.

National surveys and reports confirm that wages are also a big part of deciding whether to stay with an employer, but so are factors like a healthy work culture, opportunities for growth, and a clear and compelling sense of purpose.

Job openings near all-time highs

Job openings, as measured by the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, reached their highest levels ever measured for both the U.S. and Alaska in the years after COVID-19 hit.

In the early 2000s, job openings for the country ranged from 3 million to 5 million, and for Alaska, they hovered between 10,000 and 15,000. (To count an opening, an employer must be recruiting externally for work that a suitable candidate could begin doing right away.)

Job openings have since more than doubled for the U.S., reaching 11.4 million in mid-2022 before coming back down slightly.

Alaska job openings followed a similar path, hitting 40,000 in the summer of 2022 before falling marginally but remaining far above historical levels.

Source: U.S. Bureau of Labor Statistics, Job Openings and Turnover Survey

The graph above shows that job opening rates for the U.S. and Alaska stayed roughly parallel over the last two decades, with Alaska’s rates consistently running one to two percentage points higher.

The pandemic isn’t the only reason

In the U.S. as well as Alaska (and nearly all states), job openings had started to rise well before the pandemic.

Demographics had already begun to create labor shortages because the large baby boom generation had started aging out of their prime working years in the early 2010s as fewer people aged into their working years to replace them.

Demographers had long seen that coming, and labor economists had anticipated it would create a workforce challenge.

The pandemic accelerated the imbalance by prompting many older workers to retire earlier than they otherwise would have. Because the increase in job openings was at first driven by normal retirements and then exacerbated
by pandemic-driven early retirements, it’s almost certain to persist as these powerful demographic forces continue to play out.

Turnover patterns and outliers

Looking in detail at the turnover data by occupation (pg. 5) shows that occupations with high turnover typically had low hourly wages, with a few exceptions highlighted in orange.

Occupations highlighted in green were also outliers; they had lower turnover than one would expect if wages were the only thing that mattered.

The highest annual turnover rate in 2022 was 84 percent for fast-food cooks.

That means if 100 were necessary to staff the state’s fast food restaurants, 84 left the occupation over the year and needed to be replaced.

The lowest turnover was 8 percent for architects.

Physically demanding jobs tended to have higher turnover

Four of the occupations highlighted for high turnover despite their high wages required physically difficult work.

For example, drywall and ceiling tile installers handle and move materials, climb, lift, balance, and stoop.

Similar physical requirements characterize the jobs of highway maintenance workers; radio, cellular, and tower equipment installers and repairers; and carpenters.

When the work is outside, as it is for several of those occupations, it can mean harsh weather on top of the physically demanding tasks, especially in Alaska.

Child care is especially relevant

One occupation of special interest in recent years is child care workers.

Alaska and the nation have a widely acknowledged acute shortage of child care workers and facilities.

That makes it harder for parents of young children to work, which exacerbates the worker shortage.

At 51 percent, child care turnover is well above average.

The average hourly wage of $15.93 was about half the overall average of $31.79.

Those numbers are bleak, but the data at least hints at the appeal of taking care of children.

Nine out of the 12 occupations with higher turnover than child care workers pay more.

In other words, those other workers make more money — nearly twice as much in a few cases — but still have higher turnover rates than child care workers.

Read the full Department of Labor article here.