© Copyright 2006 by the Wyoming Department of Employment, Research & Planning
Vol. 43 No. 1
From 2000 to 2005, the 4-quarter moving average of continuous transactions in Wyoming’s labor market steadily increased. Keeping pace with this increase was a decline in statewide unemployment rates from 2003 to 2005. The data indicate that during the recent economic expansion, workers tended to maintain longer-term employment relationships with employers. Although continuous transactions are increasing and unemployment rates are decreasing in the aggregate, there is considerable variation in industry-level turnover statistics, due not only to economic conditions but also to the nature of the businesses which operate in the state.
Although people may view Wyoming’s current labor market situation as a steadily growing environment, aggregate analysis of the market tends to mask underlying currents of worker movement. When using the labor force concept, which uses persons employed as the unit of analysis, turnover may be overlooked during times of expansion. Closer study of the data reveals that while turnover may decrease during times of economic expansion, it still exists and tends to vary considerably by industry. This article examines Wyoming statewide turnover from first quarter 2000 (2000Q1) to first quarter 2005 (2005Q1) in an effort to describe trends not readily observed at the statewide aggregate employment level.
Methodology and Data Sets Used
The data set used was the Wyoming Wage Records database matched with the Quarterly Census of Employment and Wages database. We described turnover according to the definitions developed by Glover (2002). The analysis focused on four categories of worker interactions: hires, exits, both, and continuous employment. Both is defined as workers who were hired and then separated from employment (exited) within the same quarter. Continuous employment represents workers who were employed by the same employer for three contiguous quarters. Any employment which was not continuous is considered turnover (i.e., hires, exits, or both).
This type of analysis results in multiple interactions (hereafter referred to as transactions) between some employers and employees during the quarter.
For example, when Employee A is hired at Company A, one transaction occurs (1 hire). If Employee A had also been working continuously for Company B during the same quarter, two transactions would have occurred (1 hire + 1 continuous = 2 transactions). If Employee A left Company A within the same quarter he/she was hired but remained employed with Company B, the number of transactions would stay constant at two (1 both + 1 continuous = 2 transactions). If Employee A was hired at Company A, continued working for Company B, and left a third company (Company C) within the same quarter, the number of transactions would increase to three (1 hire + 1 continuous + 1 exit = 3 transactions). Therefore, because each person can have more than one transaction, the number of transactions does not equal the number of employees.
Statistics for the turnover variable were aggregated to the industry level and analyzed by quarter for 2000Q1 through 2005Q1. Three quarters of data are displayed in this article; however, the complete set of tables is available at http://doe.state.wy.us/LMI. Previous research (Leonard, 2005) shows that continuously employed private sector workers in Wyoming earn from 2 to 4 times more on average than workers who experience turnover. Additionally, continuously employed workers are more likely to qualify for benefits such as health insurance. If the proportion and number of continuously employed workers is increasing, wages as a whole should increase.
Figure 1 shows that during the last 5 years, the 4-quarter moving average of continuous labor market transactions has steadily increased with a more rapid increase occurring since 2003Q1. Findings from Gallagher (2002) suggest the increase is associated with the aging of Wyoming’s labor force as workers between age 35 and 54 have higher continuous employment rates than workers in other age groups. Keeping pace with the increase in continuous employment was a decline in statewide unemployment rates (Bureau of Labor Statistics, 2006) from 2003Q1 (5.3%) to 2005Q1 (4.1%). Not only does economic growth make layoffs less likely but results suggest workers tended to maintain longer-term relationships with their employers during the most recent economic expansion.
To further illustrate the underlying dynamics present in Wyoming’s labor market, three quarters of turnover data are presented as Table 1 (2000Q1), Table 2 (2004Q4), and Table 3 (2005Q1). Tables 1 and 3 represent the end points of the data series. Table 2 shows one example of the current economic expansion that gained considerable momentum after 2003. A comparison of Tables 1 and 3 shows not only that the total number of continuous transactions has increased but also that the proportion of continuous transactions has increased from 68.8% to 72.0%. Analyzing Tables 2 and 3 reveals that 14,106 fewer labor market transactions occurred in 2004Q4. The change reflects seasonal work patterns in industries such as Construction, Retail Trade, and Leisure & Hospitality. Tables 1 and 2 show the increase in the number of transactions by industry. The industry with the largest jump in total transactions from 2000Q1 to 2005Q1 was Mining (38.7%), followed by Health Services (18.8%) and Wholesale Trade (17.7%).
Table 3 also demonstrates widely varying industry turnover patterns as evidenced by the total number of hires and exits. Hires exceeded exits in most industries. However, exits exceeded hires in Manufacturing, Information, and Public Administration. Overall, 1 in 5 transactions in goods-producing industries was a hire during the quarter, compared with roughly 1 in 6 transactions in service-providing. Leisure & Hospitality was the industry with both the highest hire (27.7%) and exit (26.8%) rates. Public Administration had the lowest (7.7% and 8.1%, respectively).
Conclusion
The analysis of transactions between workers and their employers can reveal patterns which cannot be seen by comparing the number of persons employed to jobs worked. By studying transactions, we can identify where both hiring and exiting occurs at a unit of analysis as small as individual firms. The article on page 8, “Changing Demographics in Wyoming Health Care: Identifying Potential Problems,” demonstrates the power of this tool by examining individual industries within Health Services and turnover among registered nurses.
References
Bureau of Labor Statistics. (2006). Local Area Unemployment Statistics. Retrieved February 2, 2006, from http://www.bls.gov/lau/home.htm
Gallagher, T. (2002, April). The development of common measures of turnover in four states; Overview and applications. In Symposium on Labor Market Information Applications of Wage Records for Workforce Investment, St. Paul, MN.
Glover, T. (2002). Turnover analysis; Definitions, process, and
quantification. Retrieved February 6, 2006, from http://doe.state.wy.us/LMI/w_r_research/Turnover_Methodology.pdf
Leonard, D. (2005). Wyoming average quarterly wage by labor market transaction, industry, and residency status in T. Gallagher, M. Harris, M. Hiatt, D. Leonard, S. Saulcy, & K. R. Shinkle, Private sector employee access to health insurance and the potential Wyo-Care market (p. E11). Casper, WY: Wyoming Department of Employment, Research & Planning. Retrieved February 6, 2006, from http://doe.state.wy.us/LMI/HCCFinal/AppE.pdf
Table of Contents | Labor Market Information | Wyoming Job Network | Send Us Mail
These pages
designed by Julie Barnish.
Last modified on
by Krista R. Shinkle.