The Characteristics of Job Turnover in Southwestern Oregon

The Characteristics of Job Turnover in Southwestern Oregon

by Kale Donnelly

February 28, 2018

In today’s tight labor market where qualified workers are hard to come by and more vacancies are becoming difficult to fill, hearing an employee say “I’m leaving” is far from music to an employer’s ears. The cost of recruitment and training a new employee can be high, and the institutional knowledge of an exiting employee can be extremely challenging to replace. So, which industries typically shoulder more of the burden when it comes to the “churn” in the labor market? What does turnover look like in terms of size and age of the firms in our area? Let’s take a look:

Turning Over a New Leaf

Change. It’s a word and concept that many of us have grown to expect, but can also find hard to accept when we’re presented with said change. With respect to changing employers or even career fields, a certain amount of job hopping is to be expected throughout one’s lifetime. If you look back on your first 10 jobs, how does that list look? I imagine that the first job is wildly different from the last. Personally, I transitioned from various positions in retail to landscaping, to shoveling driveways in the harsh Wyoming winters, delivering flowers (still in the harsh Wyoming winters), working in a call center, originating home loans, and then finally finding my niche as an analyst after studying economics in college. In fact, in the 11 years I’ve been in the workforce I’ve held 14 jobs. While I may be casting myself as a typical Millennial, my previous job-hopping behavior (which I like to happily refer to as “eclectic skills acquisition”) falls in line with the data on turnover rates by age.

Within Southwestern Oregon, the turnover rate for those aged 14 to 18 in 2015 was 28.5 percent – more than three times the annual rate of turnover for those ages 35 to 44. As we work our way up the age of working cohorts the trend line for turnover skews downward – maxing out at those aged 14 to 18 while bottoming out at a mere 6 percent for the group aged 55 to 64. The exception with the trend lies is those retiring at the age of 65 or above with a turnover rate of roughly 8 percent.

Small or Newer Firms Face More Difficulty Retaining Workers

As a firm’s age of operation and employment levels increase, their rates of turnover tend to decrease. Private firms with zero to 19 employees experienced a turnover rate hovering around 11 percent from 2010 to 2015, while firms with 250 to 499 or 500+ employees had markedly less turnover in the same timeframe – roughly 7 percent and 9 percent, respectively.

The age of the firm also comes in to play, as those who have just recently taken down their grand opening signs (zero to 1 years of operation) have more than twice the rate of turnover of firms whose operations have been running for more than 11 years. However, this isn’t entirely out of the ordinary since a decent share of startups find themselves unsuccessful in their first years of business, resulting in layoffs.

Competition for customers is always a factor, and larger, more established firms can typically operate on thinner margins for a longer period of time than the smaller and newer firms in the same area. A handful of turnovers in these smaller operations can throw a wrench into the plans of the business and have devastating effects for the employer.

As for turnover by industry, accommodation and food services experienced the highest rate of turnover for Southwestern Oregon’s industries in 2015, with an annual rate of nearly 14 percent. Coming in second was arts, entertainment, and recreation with a 12 percent turnover rate (combining both sectors yields the industry of leisure and hospitality). Manufacturing, on the other hand, reported the least amount of turnover at 5.6 percent. The demographic makeup of these industries can explain the difference – more than one out of five workers in the leisure and hospitality industry is under the age of 25, while only 7 percent of the manufacturing sector’s workforce is under 25 years of age. Additionally, many manufacturing companies face minimum age requirement laws for the vast majority of their positions.

Keep Your Job Candidates Close and Your Employees Closer

In the end, employers of all types experience an inescapable element of turnover throughout their ranks. Many different factors from training to benefits to company culture, and more can shape the ways in which a firm’s turnover behaves. In addition, nearly 75 percent of Southwestern Oregon’s reported vacancies through our 2017 Job Vacancy Survey were difficult to fill, so focused plans of recruitment, and especially retention, are critical in the tight labor market we are currently witnessing.