Q1 Labor Stats Show Low Quit Rate in Finance

Are we in the ‘YOLO Economy’, an era where post-pandemic workers quit their jobs on a whim for a new adventure after a brush with lockdowns and death?

Sort of. 

Quarterly data from the US Bureau of Labor statistics, the labor economics research wing of the Department of Labor, shows a fairly stable labor market with people not yet rushing to leave their jobs for the allure of a startup.

However, it also shows that a combination of remote work and a lively startup industry mean those that want to leave their job are confident they will find their next gig with ease. 

Quit rate insight

In March, the number of layoffs and discharges hit 1.5 million, a record low compared to the previous 12 months. At the same time, the rate of people voluntarily leaving their job was stable at 3.5 million departing workers, or 2.4% of the workforce. 

Out of all the industries listed, the finance and insurance industry had one of the lowest levels of quits with a rate of 1, or 1% of the workforce voluntarily departing their jobs in March. This is down (so less workers leaving) from earlier this year when 1.6% of all finance workers left their job in January. 

The quit rate for Finance hit a recent high of 2% in August of last year, well into the depths of the pandemic, as historically this month is one of job transition with Augusts of 2019 and 2018 also hitting respective yearly highs. 

In the professional services sector, quits hit a semi-recent high in September of 2020 at a rate of 3.4, or 3.4% of the workforce before dropping off significantly for the rest of the year. The sector has seen a slight increase between February and March, nudging up the rate from 2.5 to 2.8. Prior to this it had seen a historical high in August 2017 at a rate of 3.7.

Work flexibility

“The increase in quits more recently can be a function of the return-to-work concept. As people are being asked to return to work, there’s a certain segment of the population that’s going to say: ‘hey, I like working from home’. So you’re seeing a bit of a pop there as well,” said Phil Noftsinger, an Executive Vice President at payroll and accounting firm CBIZ. Noftsinger runs the CBIZ Small Business Employment Index (SBEI) tracker at the firm, which aggregates payroll and hiring trends into reports and insights. 

“Financial services is less risk averse and you’re going to see a lower quits rate anyway. These jobs tend to have a higher level of work flexibility anyway. With lots of CPA firms, where you are often at a client site, in-office work was never as big of a requirement,” he continued. 

At the same time, people are spending a lot of time on job resource site Linkedin. During Microsoft’s (Linkedin’s parent) recent earnings CEO Satya Nadella revealed that year-on-year conversations increased by 43%, content share was up 29%. Hours on LinkedIn increased by 80% as people looked for new opportunities.

“We once again saw record engagement, as LinkedIn’s 756 million members use the network to connect, learn, create content, and find jobs,” Nadella said during the company’s earnings call.

Data is “no surprise”

Despite the doom-and-gloom some might have regarding Covid-19 and the broader economy, the quit rate is still much higher than it was a decade ago. 

In March 2011 the overall quit rate was at 1.5, and since then data is trending upward. The rate in March 2021 was 2.4. Even when Covid-19 was at its worse in April 2020, the rate was at 1.6 and still higher than a decade prior. 

“There was very little job movement because it was such an elongated recovery and the shock was so immediate with the 2009 crisis. So I’m not surprised with the data,” Noftsinger said. 

Julian Sawyer, CEO of Bitstamp, added that hiring has “fundamentally changed” because of Covid-19. In particular, the acceptance of work-from-home by many companies has created a very dynamic and mobile labor force that no longer looks for jobs in one geographic location. 

Unique dynamics

Noftsinger agrees, and said that there are a number of “unique dynamics” at play here that weren’t present in prior recessions and recoveries. 

“It’s a very interesting time in the labor market. People have gone through this work from the home stage and it has created a new picture of work-life balance for them,” he continued. “I’m not surprised to see that people are more mobile, and feel they have more control over their employment situation in this recovery instead of the prior one.”

But does all of this mean that blockchain companies are scooping talent from incumbents? Not yet. 

“There’s something to be said about the unique nature of work that a startup, especially a firm in blockchain, can offer that a traditional firm can’t,” Noftsinger said. But he also pointed out that the volume of moves is so small that it’s not yet registering with Bureau of Labor Statistics level data. 

Some big names might be “going crypto” but it seems not everyone is.