If you have a job today, chances are you’ll be able to keep it as long as you want.
In the wake of the epidemic, a record number of people have paid close attention to the “great resignation” of leaving their jobs. According to the latest available data from the United States, more than four million workers lost their jobs each month from July to October. Department of Labor. The number of employees voluntarily leaving the door has never risen above this mark before.
But the thing that is not getting much attention is that the other end of the spectrum: dismissal and pruning has basically stopped.
“Employers are hanging on to workers for a better life,” said Julia Polak, chief economist at Ziprecruiter.
Only 1.36 million people lost their jobs in October, up from 1.35 million in May, when that reading record was low.
Recent figures show that 227,000 fewer were fired and laid off than in the pre-epidemic of September 2016. And this is about 30% less than the average number of prunings and dismissals, excluding pruning spikes in March and April. At the beginning of the epidemic of 2020.
With new weekly unemployment claims hitting a 52-year low, it is highly likely that November and December endings and layoff readings will set further new records, Polak said.
The math is simple: there are more job opportunities than just looking for a job. Employers understand how difficult it is to fill a job and are willing to hang on to employees they might otherwise leave in the past.
Labor Department data shows that there are 0.67 job seekers per job – or three job opportunities for every two people. This is the worst ratio for employers since the Department of Labor began tracking job openings in 2000.
The lowest ratio on record was 0.81 job seekers per opening, which occurred in September and October 2019, when the unemployment rate stood at a 50-year low. It works for about four job seekers for every five openings – not good for those who want to fill the job, but not as bad as the current imbalance.
Typically, the average ratio is more than two job seekers per opening, which means a boss can fire an employee at normal times and be sure to quickly find a suitable replacement, and not at a higher cost.
Not today. According to Polak, hiring a new employee to replace a laid-off worker in the current labor market could mean higher pay.
“Companies hate to make any cuts. They’re hanging on to each of them, “said Andy Challenger, senior vice president of Challenger, Gray and Christmas, the hiring agency that tracks layoff announcements.
This includes people who may be late regularly or who are making mistakes in their work, he added.
“If they let someone go, the alternative is no one is working,” he said. “It will affect their sales, their growth.”
There are exceptions, of course. Even in the current environment, more than one million workers are losing their jobs every month. The most recent profile example is the recent mortgage company Better.com, whose CEO laid off 900 employees in a zoom call that lasted less than three minutes, prompting widespread criticism, multiple apologies and a leave of absence from the company.
But the current level of layoffs and layoffs reflects the fact that 1% of workers have lost their jobs since May, a record low rate. “It’s as low as it can go,” Challenger said.
Polak says many employers now seek to improve the work and productivity of employees who were once laid off, setting up “performance improvement plans” for those employees.
“In the past, if you were put in one of these plans, it was often a way to create a lawsuit for dismissal,” Polak said. Employees. “
Such a change could ultimately be good for employees, employers and the economy.
“I don’t think that means we will have a workforce of Malingers and lesser performers,” Polak said. “More investment in training is a good thing. I think it’s a huge positive for employees. It means they have a second chance. It means they have the opportunity to grow and learn and improve.”
Both Challenger and Polak said the labor deficit reflects the fact that there are 2.4 million fewer people in the U.S. workforce, either in jobs or in search of work, than it was two years ago.
Many people who left the workforce during the epidemic have not yet returned, perhaps due to health concerns or the need for childcare. And some, such as those who retired early during the epidemic, may never return.
“Right now the economy is trying to move the whole bore forward with a huge hole in the labor market,” Challenger said.
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