Looking Under the Hood of Jobs Data: Job Openings and Hires by Firm Size

Let’s not bury the lead. Newly released experimental information from the U.S. Bureau of Labor Statistics shows that firms employing 500 workers or more consistently have more job openings and more hires than smaller firms. During the most recent recession, these larger firms cut job openings at a faster pace than did smaller firms. Following the recession, job openings grew more rapidly in larger firms.

Editor’s note: Data for this chart are available in the table below.

OK, those are the highlights. But maybe you want to know more. Or maybe you have a comment or question. Read on.

Monthly headlines from BLS show the change in the number of jobs and information about the labor force, such as the unemployment rate. For example, employers added 228,000 jobs in November 2017, and the national unemployment rate stood at 4.1 percent. But behind those top-side numbers, there’s a lot going on in the job world. BLS provides much of that detail, including unemployment rates by demographic groups, jobs created by new versus expanding firms, and employment by occupation.

Today we take a look at some experimental information recently released from the Job Openings and Labor Turnover Survey. The survey provides monthly information on the number and rate of job openings at the end of the month, as well as job turnover (hires and separations) during the month. For example, at the end of October 2017, employers had 6.0 million job openings. There were 5.6 million workers hired and 5.2 million workers separated during October. And of those separations, quits outnumbered layoffs and discharges by a ratio of 2 to 1 (3.2 million quits, 1.6 million layoffs and discharges).

The Job Openings and Labor Turnover Survey began in 2000. It provides nearly two decades of data that span business cycles, including the moderate recession in the early 2000s and the deep recession in the late 2000s. These monthly reports highlight differences by industry. For example, over the past several years, job openings have outpaced hires in the health care and social assistance, suggesting a continual need for skilled labor. In contrast, hires outpaced job openings in the construction industry, indicating a steady availability of labor.

What effect does firm size have on job openings and labor turnover? To unpack this question, BLS staff developed newly available experimental measures by firm size. A firm is defined as a related set of job sites. A firm may be a single location, such as Joe’s Plumbing Supply. Or a firm may have many different sites across industries and geography, including manufacturing, transportation and warehousing, and multiple retail locations. To develop these firm-level estimates, BLS staff identified entities with multiple locations and used the combined employment to slot firms into size categories. The new information is available for 3 groups: small (1–49 workers), medium (50–499 workers), and large (500 workers or more).

Some highlights from the data:

• Large firms have twice as many job openings as do small and medium-sized firms.
• Large firms also have the highest job opening rate, which is the ratio of job openings to the sum of employment plus job openings.
• The number of hires by firm size is similar to the pattern of job openings; hires in large firms are nearly twice that of small and medium-sized firms.
• The rate of hires, which compares the number of hires to employment, is about the same across firm size classes, especially in the past few years.

Editor’s note: Data for this chart are available in the table below.

We want to hear from you. BLS develops experimental measures like these to provide greater understanding of the job market. As we continue to work on these and other measures, we seek your input. Send your questions and comments about the usefulness of these data to the Job Openings and Labor Turnover Survey staff.