The job market continued to slow down in June, according to the Bureau of Labor Statistics’ (BLS) most recent Job Openings and Labor Turnover Survey (JOLTS) report, released Tuesday. Job openings were unchanged between June and May, and total hires and separations fell slightly. Let’s dig in.
What the data says. Total hires and separations in June fell to 5.3 million and 5.1 million, respectively. That’s a slight decrease from the BLS’s revised estimate of 5.7 million hires and 5.4 million separations in May. Employers posted 8.2 million job openings in June, unchanged from the revised 8.2 million in May. Similarly, the share of workers quitting fell slightly from 3.3 million in June, from a downwardly revised 3.4 million in May.
In short, employers and workers are holding back on hiring and quitting, labor economists told HR Brew.
“[Firms would] rather stick to their internal workforce to the extent possible and there’s a little bit of that also, on the worker side—quit rates have come down quite a bit, since the height of the pandemic as well,” Benjamin Friedrich, a professor of strategy at Northwestern’s Kellogg School of Management, told HR Brew. “All of that, I think, is showing that both sides of the market, firms and workers, are very hesitant. They face a lot of uncertainty.”
Zoom out. HR leaders tend to think of turnover as a negative, but too little turnover can be just as bad for a company as too much. If employees don’t leave, colleagues may not have opportunities for advancement and may feel stuck, and this can potentially lead to low engagement and simmering resentment against the company.
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“There is a win-win for employers and employees when turnover is high enough that folks feel like they can move to a better position, and employers are not stuck with employees who feel like they’re in a dead end,” Daniel Zhao, lead economist at Glassdoor, told HR Brew.
HR leaders should look at their own turnover rate and the drivers behind it. For example, Zhao said, HR executives should ask: Are employees worried about job security or career growth options? How can the company find ways to motivate employees who are staying put and ensure they are engaged and productive?
In a low-turnover environment, finding talent may also require more outreach, as workers are less likely to be actively searching for jobs than they were during the Great Resignation.
“As an HR leader, you’re gonna have to be mindful of that type of uncertainty [and] anxiety, and think about: ‘What I can do to improve the experience of candidates?’” Friedrich said.
In the coming months, HR leaders should keep an eye on whether hiring rates tick up again, Zhao said, as disengaged employees may be more motivated to find a new role. They should also keep an eye on whether the Federal Reserve Bank cuts interest rates, because businesses might have more confidence to start hiring again.
“It does seem, in anecdotes from companies, that there is some pent-up demand for hiring, but a lot of companies are just sitting tight right now because they’re not sure exactly when the expansion will restart,” he said.
