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Labor Turnover and Retention

The Monster Online Labor Turnover Data Series

As a complement to the BLS turnover data, which is typically published with a time lag of one to two months, Monster tracks the relative number of online job postings aimed at finding replacement workers for pre-existing, but recently vacated positions vs. those aimed at filling newly created positions. The Monster Online Labor Turnover Ratio is thus defined as the share of total online help-wanted ads posted as a result of workforce churn rather than business expansion.

Similar to the Monster Employment Index, the online labor turnover ratio may serve as a leading job market indicator since sourcing activity typically precedes actual hiring by several months. Increases in the labor turnover ratio are historically correlated with upticks in the total separations (turnover) rate as published by the BLS. Of course, a rising labor turnover ratio may also indicate that a smaller share of the online recruitment activity seen on Monster is aimed at growing the business and expanding the workforce. This data should therefore be interpreted in the context of overall online recruiting trends.

Results

The online labor turnover ratio dipped further in the fourth quarter of 2007 and is down convincingly year over year. These findings are in line with recent data from the BLS, showing a downward tendency in workforce churn. In particular, the West noted significantly less activity related to staff replacement compared to the year-earlier quarter.

Among the occupations, Community and Social Services boasted the highest labor turnover ratio, followed by the typically Healthcare Practitioners/Technical and the high-churn Food Preparation and Serving category. Farming, Fishing, and Forestry was at the bottom.

Correlation

When plotting Monster Online Labor Turnover data against the Total Separations data from the BLS, Monster trends generally preceed BLS trends by 1 month. Indeed, new and replacement job posting activity among Monster customers provides an indication of future churn levels in the US labor market.