*The charts in this article are sourced by the U.S. Census Bureau’s Quarterly Workforce Indicators*
Compared to three decades ago, employee turnover rates among Idaho private companies have declined in 11 of the 19 industry sectors, according to the U.S. Census Bureau’s Quarterly Workforce Indicators. This decline is a sign of added job stability created by Idaho’s expanding industries.
Figure 1.
Generally, employee turnover rates are defined as the percentage of a company’s or industry’s annual workforce changes. The change occurs when there is a new hire or a separation, where the separation can be caused by three occurrences: a quit, a discharge or a death.
Most new hires are driven by replacements created by a separation, not growth in a company or industry. It is a net calculation of hires and separations, in relation to the level of employment.
In short, turnover rates can be a warning to a company or industry that there is a potential issue disrupting its efforts to retain skilled and trained workers.
To make the information readily available to the public, the U.S. Census Bureau developed Quarterly Workforce Indicators (QWI). This provides data to decision-makers regarding the characteristics of industry workers, including the turnover rates. It yields more granular detail than other statistical programs that source to administrative records, drilling down to county levels, 4-digit NAICS codes and demographics, dating to 1990 and current through third quarter 2023. It also includes average employment and wages in easy-to-follow steps. Learn more about QWI 101.
Why do turnover rates matter
The process of filling a job can consume a great deal of time, which in turn costs an employer money, redirecting efforts from its business purposes. This is particularly true when filling the same position repeatedly — the process is time-consuming and laborious.
Lowering turnover rates can improve a firm’s profit margin, while just as importantly, it can enrich its image among customers and job seekers.
Turnover rates during the COVID-19 pandemic
The most current full year of employee turnover data is from 2022, allowing a comparison with pre-pandemic data from 2019. Comparing this shorter time span, all but one industry experienced higher turnover.
During the pandemic, the nation experienced a higher incidence of quit rates and retirements than the norm, coining the term the Great Resignation. The disruption of the pandemic created an awareness of remote work, as well as the importance of benefits such as health insurance. It caused tenured workers to ponder life with early retirements ensuing.
The one industry with a slight downturn in turnover rate was arts, entertainment and recreation — an industry innately based on hiring part-time or temporary workers. In 2022, its turnover rate was the highest among the 19 industries and declined to 19.9% from its pre-pandemic rate of 21.8%, with about one out of every five workers separating annually.
Company size
Idaho’s largest industries, by size, generally employ a solid share of part-time workers, examples include retail and accommodation and food services. Other industries with smaller employment may intentionally incorporate part-time or temporary workers due to seasonality. Examples of industries with seasonal workforce demand include agriculture along with arts, entertainment and recreation. Rankings of industries with the highest employment and the highest turnover rates are shown in Figures 2 and 3.
Other large industries carrying a more even distribution of high paying, higher-skilled jobs, as well as entry level or lower-skilled jobs include health care and social assistance, educational services and manufacturing. Lower skilled jobs are loosely defined as those positions needing minimal preparation, education or training.
It is expected that these entry level, or seasonal jobs in larger industries would experience higher turnover as employees strive for more pay and career advancement. Retail trade and accommodation and food services are the two industries ranked in both tables showing high levels of employment and structurally high turnover rates.
Figure 2. Highest employment share – Idaho
Figure 3. Highest turnover industries, 2022 – Idaho
Turnover rates by educational attainment
Idaho’s workforce with bachelor’s or advanced degrees carried lower turnover rates compared to other educational categories, shown in Figure 4. All categories of educational attainment appear to follow similar trend lines, although at different levels of turnover rates. The upward slope shown during the pandemic was a trend for all educational categories due to increased separations and a quick recovery.
The bachelor’s degree or advanced degree was the only category to continue growing from 2021 to 2022. This could possibly be because of the continual employer competition for those with higher degrees, as Idaho’s share of population with a bachelor’s, professional or graduate degree is 19.8% compared to the nation’s post-secondary attainment at 23.5%.
The convergence of high school or equivalent and higher degrees is in stark contrast to the 25 years leading up to the pandemic. It is unclear whether the convergence will continue or former trends with greater gaps between the educational categories will resume.
Figure 4.
Contiguous states turnover by educational attainment
The ability to compare other states’ turnover rates can be beneficial for job seekers and businesses. QWI Explorer and its average employment data provide information on where workers in a specific industry can be located for recruitment by a company. The employee turnover rate indicates whether other states are successful in retaining workers. It can also identify if an issue exists across all states or industries. An example of this is retirement among tenured workers.
For job seekers considering a move to a surrounding state, Idaho tied with several of its neighbors for low employee turnover rates in the lower educational attainment categories, while some college and associate degrees and bachelor’s and advanced degrees ranked No. 2 and No. 4.
Utah had the lowest turnover rate for some college or associate degrees at 9.1% and bachelor’s and advanced degrees at 8.6%.
Wyoming carried the highest turnover rates in most educational categories for 2022, with its less than high school or equivalent rate particularly high at 12.5%. The tourism sector is important to Wyoming as 96% of Yellowstone National Park lies within its borders, and part-time and seasonal jobs are in high demand.
The states with continued upward trends in turnover rates include Montana, Nevada, Oregon and Washington.
Figure 5. Turnover rates by educational attainment
Other than the less than high school degree carrying the greatest turnover rates across all states, each state slightly differed — likely tied to their varied industries.
- Montana and Wyoming have a strong oil and gas industry, hence the higher less than high school turnover rate as the industry is price sensitive and volatile. It attracts workers with strength and stamina — typically younger workers —to jobs that do not need require a post-secondary education. It is an industry that halts production when supply is high and prices are low, leading to periodic layoffs.
- Utah has the lowest turnover in the bachelor’s or advanced degrees category, attributable to its strong family and religious ties that can create community and less mobility or move-to-work mentality. The state has diversified its industry mix and tops lists for job growth, opportunity and population growth. This echoes across the border into southern Idaho. Utah’s employee turnover rate is trending downward across all educational categories.
- Wyoming has the flattest slope of turnover rates for those categories with a high school degree through post-secondary education, consistently hovering under 12% turnover for the past 20 years.
- Nevada’s turnover rates among educational categories are not as varied as other states, with less distance between educational categories. The state’s largest employment industry is accommodation and food services, double the employment of retail trade, a distant second. The gaming industry dominates the state and retail is a beneficiary, both of which do not require much preparation or education.
Figure 6.
Figure 7.
Figure 8.
Figure 9.
Figure 10.
Figure 11.
Note: Several states did not initiate collaboration with the U.S. Census QWI program immediately, including Nevada, Utah and Wyoming.
Turnover by age
Idaho’s 2022 age turnover data makes sense with the youngest age categories bearing the higher employee turnover rates to the tune of one quit for every four jobs annually. After 21 years of age, each category experiences a decline in turnover rates, until the 65-99 age category when it increases 10% as retirements kick in.
These higher rates can be tied to part-time and seasonal jobs, of which most of the workers are students or those making career decisions. There is decreased turnover with each increasing age category until retirement age, when there is that previously mentioned uptick.
There are intangibles to be gained by hiring young workers, distinct from turnover rates, including fresh ideas, more energy, less burnout and hunger to advance. The oldest workers will carry great institutional knowledge and be a quick study when it comes to understanding the mechanics of an organization and how different departments work together. This is gained with time, maturity and familiarity but may not have a long career horizon.
Figure 12.
Comparing the impact of age on different industries by researching a state’s turnover rate is an effective method of vetting industries when searching for a new career or a mid-career change.
Turnover by gender
Figure 13.
Idaho’s turnover rates among males and females followed the type of downturn when certain industries and corresponding genders were hit harder economically.
During the 2008-2010 Great Recession, the male-dominated construction and finance industries were hit more severely. During that time, the bars depicting the two genders’ turnover rates were the closest to matching. Historically, the female turnover rate was higher. The rationale regarding who stays home with young children and the elderly versus which parent works outside the home typically comes down to the level of paycheck. It frequently does not pencil out to pay for daycare when wages are lower but there are exceptions for health care benefits, etc.
In the aggregate, women earn less than men. If finances are tight, it is usually the female that works a part-time or temporary job or quits to cover needs at home as women’s wages are an estimated 82% of men’s wage across all ages and the nation. [1]
The closure of schools and various nonessential business in the early part of the COVID-19 pandemic led to women’s turnover rates pulling ahead of men’s rates by an even greater percentage. This led to some of the highest differences between gender turnover rates in recent years. The pandemic’s brief recession was termed a ‘she-cession.’ [2]
Going forward
If training is intensive, excessive turnover can be a death toll for a business. The ‘time is money’ refrain clearly works against a company with high turnover. The intended business activity can take less precedence when efforts must also be directed toward vetting and interviewing, onboarding and training new staff.
In the last 20 years, there has been less intensive training on the job. Employers have been able to hire those already tenured and if they came with a portfolio of business development, all the better.
Generally, Idaho’s workforce appears to be more loyal by exhibiting lower rates of job-hopping than most of its surrounding states. That said, the turnover rates have increased since the pandemic in most industries and that can aggressively tap into a company’s profit margin.
Taking proactive steps to increase retention will show up in a greater bottom line.
Note: The QWI Explorer is a U.S. Census Bureau online tool developed for ease of access for grant writers, companies and small business to make comparisons. It utilizes data from government administrative records such as unemployment insurance reports, social security reports and individual tax returns. It also uses data from the U.S. Census Bureau and the American Community Survey for its demographics and educational attainment reports found on QWI Explorers.
Sources:
[1] – (Aragao, C., 2022, “Gender pay gap in U.S. hasn’t changed much in two decades”, Pew Research)
[2] – (Mason, C. Nicole, 2020. “The She-Cession: How the Pandemic Forced Women from the Workplace and How Employers Can Response”).
Jan.Roeser@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 696-2172
This Idaho Department of Labor project is funded by the U.S. Department of Labor for SFY24 as part of a Workforce Information grant (48%) and state/nonfederal funds (52%) totaling $704,259.
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