The Effect of Increased Quitting On Industry

In the years since the Great Recession of 2008, Americans were happy to get a job and earn a paycheck. It would take unemployed Americans months to find work. Employed Americans would try to keep their jobs because when big layoffs happen, the last employees in are usually the first ones out. This has started to change.

A healthy economy, low unemployment and rising demand has led to a larger supply of jobs and workers are starting to quit their jobs in large numbers.

Most of these workers are quitting to go on to higher paying positions. This is a cycle that usually results in employers raising salaries and offering higher pay for talent. So while news of nearing full employment is great, news of people quitting their jobs is often a better signal of a better economy. Another advantage is more open positions for the unemployed.

Since mid 2009 when we started emerging again from the Great Recession, the number of people quitting has nearly doubled.

Even large corporations are feeling the change. Fortune 500 companies are struggling to keep up with the salary increases and perks from emerging startups and other large corporations poaching talent.

This follows a larger and less cyclical trend of the generation as well. The Millennial generation is much less likely to stay in one job for their career. With both of these trends now coming to a peak the tides seem to be turning to valuable employees holding all the bargaining chips.

The rate of quitting hit disproportionately on low-wage jobs like restaurant, hotel and retail industries. Turnover in restaurants and hotels, for example, reached 50% in 2014.

Retailers like WalMart, The Gap and T.j. Maxx all increased wages in an effort to reduce turnover.

Government jobs has successfully kept turnover low.

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