Labor Turnover And Productivity

The Bureau of Labor Statistics reported 3.1 million jobs were open as of the beginning of July 2011 and noted the hires rate (3.1%) and separations rate (3.1%) changed little over the month of June -- a stable employment situation without much growth. Over the 12 months ending in June 2011, the BLS recorded non-seasonally adjusted data of 47.7 million hires and 46.7 million separations, yielding a net employment gain of 1.0 million. These figures included workers who may have been hired and separated more than once during the year. Nearly half of the hires and nearly half of the separations during these 12 months occurred in three industries: retail trade; professional and business services; and accommodation and food services. The large share of total hires and separations accounted for by these three industries reflects the size of the industries as well as their relatively high hires and separations rates.

The BLS also reported nonfarm business sector labor productivity decreased at a 0.3% annual rate during the second quarter of 2011, with output rising 1.8% and hours worked rising 2.0%. Although the economy continues to grows, albeit feebly, the unpredictability of that growth makes companies cautious about hiring new employees even as sales rise. The labor force may be as productive as it can get for the short term and may not be inclined to do more with less -- a Corporate Executive Board examination of 80 companies' exit surveys found that more than 75% of the 4300 workers surveyed said they would not recommend their company to other workers (See NumBytes 42: Angry Bees). Overall productivity rose 0.8% from the second quarter of 2010 to the second quarter of 2011 as output increased 2.5% while hours rose only 1.6%.