In the business community, turnover is typically regarded as an eight-letter-word. That is… two four-letter-words in rapid succession. High turnover rates generally increase costs, slow productivity, and hurt a company’s bottom-line. But from a broader economic standpoint, increasing turnover can be a sign of economic health.
Contrary to what one might think, there was considerably less turnover during the recession then prior to it. This is because the majority of turnover is not driven by layoffs but rather by workers voluntarily changing their jobs, which is more likely to happen in good economic times, when more opportunities exist. In times of economic hardship, opportunities are fewer, so individuals are less likely to give up their jobs for new ones and the turnover rate falls.
During the recession in Utah, the average quarterly turnover rate fell from 12% in 2007 to about 9% in 2009. Since that time, Utah’s quarterly turnover rate has crept its way back up to about 10% but is still below pre-recession levels. This is not necessarily good or bad. There are many factors that play into changing levels of turnover, such as industry shifts and demographic trends, so economists do not look for a particular turnover rate that will signify recovery. What we do try to understand are the regional characteristics that influence turnover rates such as industry composition, and the age distribution of the workforce.
The “County Turnover” tab in the visualization above allows you to see how the turnover rates of Utah’s counties have changed since the recession. Use the map at the top left to select the county or counties (ctrl + select for multiples) that you are interested in and the visualization will automatically update. Hover over points of interest in the charts to see additional detail.
Industry Composition and Turnover
As you might expect, different industries naturally have different turnover rates. Restaurants, for instance, tend to have higher employee churn than manufacturing plants. This is simply due to the nature of the jobs in these industries - some jobs tend to be interim work done by individuals in pursuit of other career goals, while others tend to be longer-term career choices.
In Utah (and nationally), the industries that tend to have the highest turnover rates are Administrative/Support/Waste Management, Accommodation/Food Services, and Arts/Entertainment/Recreation, so it stands to reason that regional economies more dependent on these industries are likely to have higher turnover rates and visa versa.
Select the “Industry/Age and Turnover” tab in the visualization above to explore which industries compose the largest share of your county’s employment and how that plays into your county’s turnover rate over time.
Workforce Age Distribution and Turnover
Similarly, the age distribution of the workforce can play a major role in turnover rates. As you might expect, younger workers tend to change jobs more often. As workers move up in age they tend to settle into a career and change jobs less frequently until retirement age when average turnover rates tend to increase somewhat again.
On average in Utah, the share of the workforce between 25 and 64 years old has increased since the recession, while the share between 14 and 24 has fallen. This means that after the recession we would expect turnover rates to settle at a lower overall level, even after the economy has fully recovered.
Use the bottom half of the “Industry/Age and Turnover” tab to see how age distribution affects your county’s turnover rates.