Hiring increased significantly in February 2021, according to data released April 6 from the Bureau of Labor Statistics. Seasonally-adjusted total hires jumped to 6.9 million in February, compared to 5.41 million in December 2020 and 5.47 million in January 2021. LaborIQ by ThinkWhy expects this boost in hiring to continue, as the economy bounces back from the pandemic. The surge in hiring picked up momentum with March’s gain of 916,000 jobs.
What Will Be the Impact on Future Hiring?
Since September 2020, the Quits rate – an indicator of people voluntarily leaving their current job, often for a new one – has remained at or below pre-pandemic levels. LaborIQ expects the number of quits to increase as people become more confident in the health of the economy, which will drive hiring for open positions. During the pandemic’s peak, many employees delayed leaving their current company due to uncertainty. However, the trajectory of the economic rebound will likely make more employees comfortable in deciding to change employers.
To protect against an increase in turnover rate, companies will need to focus on retention strategies, such as offering off-cycle merit increases, especially for occupations that maintained a low unemployment rate throughout the pandemic.
Currently, the U.S. has approximately 7.4 million job openings, which is the highest level of openings since 2019. One of the biggest challenges in reaching hiring potential is the number of people that have left the labor force. More than 3.8 million fewer people were in the labor force in March 2021 compared to before the pandemic. LaborIQ projects the U.S. will reach 73 million hires in 2021, which will be a combination of filling current job openings, refilling roles as people leave their current jobs and new jobs being added to the economy. Still, more people will need to rejoin the labor force for this hiring momentum to be sustained.
Revision Note: In its April 6 release, the Bureau of Labor Statistics increased January’s hires level from 5.3 million to 5.465 million.
LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.