Indiana’s Workforce: Resignations Up, New Hires Down

February 1, 2022

// PCRD

A new Research and Policy Insights (RPI) report released by the Purdue Center for Regional Development (PCRD) last week highlighted the changing nature of Indiana’s workforce over the May 2021 to October 2021 time period. The report, which I was honored to author, presented key trends on job openings, job hires, and job separations in the state. One shift that was especially concerning was the growing number of workers in the state who decided to quit their jobs over the six-month span of time. For those interested in reading the RPI report, it is available here.

The data showcased in the report were based on my analysis of monthly figures released by the Bureau of Labor Statistics (BLS) titled, State Job Openings and Labor Turnover. The newest state BLS report was released just days after my Research and Policy Insights article was released. Given the continued interest in the “Great Resignation” — or what others have described as the “Great Reshuffling”— this blog seeks to expand on the recent RPI article. It does so by analyzing Indiana’s State Job Openings and Labor Turnover data over a 23-month period, from January 2020 to November 2021. By so doing, greater degree of clarity can be achieved when it comes to understanding what factors may be contributing to the churning in Indiana’s nonfarm workforce. Let’s take a closer look at the results of the latest analysis.

Monthly Job Openings: Showing an Uptick in 2021

Figure 1 highlights the number of jobs that were open in Indiana on the last day of each of the 23 months captured in the chart. What is clear is that job openings experienced a significant downturn over the months of March and April 2020, the very time when the impacts of COVID-19 were beginning to be felt by businesses, industries, school systems, health care institutions, and other economic sectors. It took until March 2021 for monthly job openings to exceed the pre-pandemic number of 156,000 recorded in January of 2020. Since March of 2021, job openings have been on the upswing, hovering at or above the 230,000 level in six of the last seven months noted in Figure 1.

Job Hires: Getting Tougher

Unlike job openings, the number of people hired and added to the payroll in each of the 23 months proved to a bit more complicated. As Figure 2 reveals, job hires suffered a significant downturn during the early stages of the 2020 pandemic, with job hires slipping to 99,000 by April of that year. On the other hand, job hires in May 2020 increased to 245,000, likely the result of people who lost their jobs or who were laid off the earlier months of 2020 returning to work, the hiring of people whose employment might have been delayed during the early stages of the pandemic, or other factors, such as the expansion of jobs in businesses/industries whose products or services were in high demand as a result of COVID-19.

For much of the remaining months of 2020 and the early portion of 2021, job hires fell below the 140,000 mark. But by April 2021, job hires once again began to increase, continuing this trend through May 2021 (reaching 188,000 job hires). While hires remained strong in June 2021, they were slightly lower than the May figure and they’ve slowly slipped in each of the remaining months (i.e., July through November 2021). This may be indicative of the growing challenges that employers are facing when it comes to finding individuals to hire.

Job Separations: Staying Steady

“Job separations” is a sum of people who dropped from employers’ payrolls in a given month due to layoffs, discharges (such as firings or involuntary separations), voluntarily quitting their jobs, and other separations (such as retirements, transfers to other locations, employee disabilities, or deaths). Total separations taking place from January 2020 to November 2021 are shown by the blue line. The number of separations due to people quitting their jobs, or as a result of layoffs/discharges, are represented by the orange and green trend lines, respectively.

Without question, layoffs and discharges were the main factors behind the surge in total separations in March and April of 2020, signifying the major disruption that the pandemic posed to industries, businesses and other employers in the state during these early months of 2020. However, by May 2020, layoffs/discharges were less significant contributors to total separations. Rather, it was people quitting their jobs that served as the primary driver of job separations.

Worth noting is that the monthly number of workers quitting their jobs since August 2021 has consistently surpassed the 100,000 mark. In fact, the total amount of “quits” in November 2021 grew to 117,000, the highest figure recorded over the last 23 months (note: the November numbers are preliminary and will be updated as part of the December 2021 BLS report). All told, a total of 860,000 people quit their jobs in Indiana in 2020. The number of individuals quitting their jobs in 2021 is approaching 1.05 million, with December numbers still to be added to this figure (which will be available in mid-February). To date, the number of individuals quitting their job is 22 percent higher than in 2020. What is important to note, however, is not all of these individuals have left the state’s workforce. Rather, many have shifted to new jobs that may provide higher wages, better benefits and/or greater job flexibility. See the RPI report for a list of factors that may be prompting individuals to quit their jobs.

The Great Resignation/Reshuffling: Growing Percentage Quitting

As was reported in the recently released RPI article, an increasing number of people are quitting their jobs across the nation, a pattern that has come to be labeled the “Great Resignation” or “Great Reshuffling.” I wanted to examine the percent of job separations that were due to people voluntarily departing their jobs over a longer span of time (i.e., over a 23-month period) in Indiana. This could help determine if the proportion of employees quitting their jobs in 2021 is similar to, or at odds with, the pattern found in 2020. Here are some key observations from Figure 4:

  • The share of job separations tied to people quitting their jobs hovered in the 60-65% level in January and February of 2020 – percentages that were in close alignment with the percentages recorded in the months of September, October and November, 2020.
  • The impact of COVID-19 in March and April of 2020 was dramatic in terms of the volume of job separations that were due to layoffs or discharges. Some 257,000 workers in March and 301,000 in April loss their jobs due to layoffs or discharges, representing nearly 88 percent of all separations in March and over 85 percent of all separations in April.
  • For much of the remainder of 2020, the share of separations tied to “quits” varied from month to month, from a low of 51 percent in June 2020 to a high of 71 percent in December of that year.
  • Over the course of the first three months of 2021, the percentage of employees quitting their jobs was slowly declining, but increased in April (to 69.4 percent) and remained in the upper 60 to lower 70 percentage points range through the month of July.
  • Since August of 2021, the share of worker separations due to people resigning from their jobs has been on the rise – from about 3 of every 4 separations in August and September to approximately 4 of every 5 separations in October and November. In fact, the November quit percentage of 80.1 (of all job separations) was the highest number recorded over the 23 months (January 2020 to November 2021) captured in Figure 4.

A Double Whammy!

While it is difficult to predict how job openings, hires, and job separations will play out over the coming months, one thing is certain; employers are dealing with a double whammy. First, the number of new job hires is not keeping pace with the growing number of job openings. While job openings remain strong (as shown in Figure 1), job hires are on the decline (see Figure 2). Second, the gap in openings/hires is exacerbated by the growing number of people quitting their jobs (see Figures 3 and 4). While it is true that many who are leaving their current jobs will likely return to the workforce, not all will due to a number of factors (such as childcare/eldercare issues, burnout, COVID risks or mandates, or new business startups). As such, the major challenge that state, regional and local leaders will need to wrestle with is how to retain and expand the pipeline of people with the skills and experiences needed to fill critical jobs in the state.

Appendix

Table 1. Monthly Job Openings and Labor Turnover Numbers for Indiana (in 1000s): January 2020-November 2021 (seasonally adjusted)

Month/YearJob OpeningsHiresSeparationsNet Employment Gain or Loss (Hires minus Separations)
2020
January156145146-1
February15014912821
March114115339-224
April8999364-265
May12524585160
June1311749678
July14913712116
August1381359540
September150115124-9
October153109120-11
November15413312211
December1451241186
2021
January1501131085
February15413312112
March175121128-7
April212143147-4
May23218812167
June23217813741
July22716113823
August2301571489
September23015013317
October24614213210
November240144146-2
Written byBo Beaulieu

Dr. Bo Beaulieu is Professor Emeritus of Rural and Regional Development, Purdue Center for Regional Development and the Department of Agricultural Economics. Bo has played a... read more