Technical Note Special technical note: This technical note describes the procedures regularly used on a monthly basis to develop estimates from JOLTS survey responses. Due to the COVID-19 pandemic, some of the procedures described in this technical note have been modified. The modifications are briefly described in the box note in the news release and are described in more detail at www.bls.gov/covid19/effects-of-covid-19-pandemic-on-job-openings-and-labor-turnover-data.htm. This news release presents statistics from the Job Openings and Labor Turnover Survey (JOLTS). The JOLTS program provides information on labor demand and turnover. Additional information about the JOLTS program can be found at www.bls.gov/jlt/. Estimates are published for job openings, hires, quits, layoffs and discharges, other separations, and total separations. The JOLTS program covers all private nonfarm establishments, as well as federal, state, and local government entities in the 50 states and the District of Columbia. Industries are classified in accordance with the North American Industry Classification System. Definitions Employment. Employment includes persons on the payroll who worked or received pay for the pay period that includes the 12th day of the reference month. Full-time, part-time, permanent, short-term, seasonal, salaried, and hourly employees are included, as are employees on paid vacation or other paid leave. Proprietors or partners of unincorporated businesses, unpaid family workers, or employees on strike for the entire pay period, and employees on leave without pay for the entire pay period are not counted as employed. Employees of temporary help agencies, employee leasing companies, outside contractors, and consultants are counted by their employer of record, not by the establishment where they are working. Job Openings. Job openings include all positions that are open on the last business day of the reference month. A job is open only if it meets all three of these conditions: * A specific position exists and there is work available for that position. The position can be full-time or part- time, and it can be permanent, short-term, or seasonal. * The job could start within 30 days, whether or not the employer can find a suitable candidate during that time. * The employer is actively recruiting workers from outside the establishment to fill the position. Active recruiting means that the establishment is taking steps to fill a position. It may include advertising in newspapers, on television, or on the radio; posting Internet notices, posting “help wanted” signs, networking or making “word-of-mouth” announcements; accepting applications; interviewing candidates; contacting employment agencies; or soliciting employees at job fairs, state or local employment offices, or similar sources. Excluded are positions open only to internal transfers, promotions or demotions, or recall from layoffs. Also excluded are openings for positions with start dates more than 30 days in the future, positions for which employees have been hired but the employees have not yet reported for work, and positions to be filled by employees of temporary help agencies, employee leasing companies, outside contractors, or consultants. The job openings rate is computed by dividing the number of job openings by the sum of employment and job openings and multiplying that quotient by 100. Hires. Hires include all additions to the payroll during the entire reference month, including newly hired and rehired employees; full-time and part-time employees; permanent, short-term, and seasonal employees; employees who were recalled to a job at the location following a layoff (formal suspension from pay status) lasting more than 7 days; on-call or intermittent employees who returned to work after having been formally separated; workers who were hired and separated during the month, and transfers from other locations. Excluded are transfers or promotions within the reporting location, employees returning from strike, employees of temporary help agencies, employee leasing companies, outside contractors, or consultants. The hires rate is computed by dividing the number of hires by employment and multiplying that quotient by 100. Separations. Separations include all separations from the payroll during the entire reference month and is reported by type of separation: quits, layoffs and discharges, and other separations. Quits include employees who left voluntarily with the exception of retirements or transfers to other locations. Layoffs and discharges includes involuntary separations initiated by the employer including layoffs with no intent to rehire; layoffs (formal suspensions from pay status) lasting or expected to last more than 7 days; discharges resulting from mergers, downsizing, or closings; firings or other discharges for cause; terminations of permanent or short-term employees; and terminations of seasonal employees (whether or not they are expected to return the next season). Other separations include retirements, transfers to other locations, separations due to employee disability; and deaths. Excluded from separations are transfers within the same location; employees on strike; employees of temporary help agencies, employee leasing companies, outside contractors, or consultants. The separations rate is computed by dividing the number of separations by employment and multiplying that quotient by 100. The quits, layoffs and discharges, and other separations rates are computed similarly. Estimation Method The JOLTS survey design is a stratified random sample of 20,700 nonfarm business and government establishments. The sample is stratified by ownership, region, industry sector, and establishment size class. The establishments are drawn from a universe of over 9.4 million establishments compiled by the Quarterly Census of Employment and Wages (QCEW) program which includes all employers subject to state unemployment insurance laws and federal agencies subject to the Unemployment Compensation for Federal Employees program. Employment estimates are benchmarked, or ratio adjusted, monthly to the strike-adjusted employment estimates of the Current Employment Statistics (CES) survey. A ratio of CES to JOLTS employment is used to adjust the levels for all other JOLTS data elements. Birth/death model. The time lag from the start up, or birth, of an establishment until its appearance on the sampling frame is approximately one year. Also within the first year, new businesses may go out of business, referred to as a death. Because not all births and deaths of establishments can be reflected on the sampling frame immediately, the JOLTS sample cannot capture job openings, hires, and separations from them during their early existence. BLS has developed a birth/death model that uses establishment birth and death activity from previous years. The estimates of job openings, hires, and separations produced by the birth/death model are added to the sample-based estimates produced from the survey to arrive at the estimates for job openings, hires, and separations. Alignment. The JOLTS figure for hires minus separations can be used to derive a measure of net employment change. This change should be comparable to the net employment change from the much larger CES survey. However, definitional differences as well as sampling and non- sampling errors between the two surveys historically caused JOLTS to diverge from CES over time. To limit the divergence, and improve the quality of the JOLTS hires and separations series, BLS implemented the monthly alignment method. There are four steps to this method: seasonally adjust, align, back out the seasonal adjustment factors, and re-seasonally adjust. Seasonal adjustment. BLS uses X-13 ARIMA for seasonal adjustment. A concurrent seasonal adjustment methodology is used in which new seasonal adjustment factors are calculated each month, using all relevant data, up to and including current month data. JOLTS seasonal adjustment includes both additive and multiplicative models and REGARIMA (regression with auto-correlated errors) modeling to improve the seasonal adjustment factors at the beginning and end of the series and to detect and adjust for outliers in the series. The seasonally adjusted CES employment trends are applied to the seasonally adjusted JOLTS implied employment trends (hires minus separations) forcing them to be approximately the same, while preserving the seasonality of the JOLTS data. Annual estimates. The JOLTS estimates are revised annually to reflect annual updates to the CES employment estimates and the JOLTS seasonal adjustment factors. The JOLTS employment levels (not published) are ratio- adjusted to the CES employment levels, and the resulting ratios are applied to all JOLTS data elements. The seasonally adjusted data are recalculated for the most recent 5 years in order to reflect updated seasonal adjustment factors. These annual updates result in revisions to both the seasonally adjusted and not seasonally adjusted JOLTS data series, for the period since the last benchmark was established. Annual levels for hires, quits, layoffs and discharges, other separations, and total separations are the sum of the 12 published monthly levels. Annual rates are computed by dividing the annual level by the Current Employment Statistics (CES) annual average employment level, and multiplying that quotient by 100. This figure will be approximately equal to the sum of the 12 monthly rates. Consistent with BLS practice, annual estimates are published only for not seasonally adjusted data and are released with the January news release each year. Annual estimates are not calculated for job openings because job openings are a stock, or point-in-time, measurement for the last business day of each month. Reliability of the estimates JOLTS estimates are subject to both sampling and nonsampling error. Nonsampling error occurs when a sample is surveyed rather than the entire population. There is a chance that the sample estimates may differ from the true population values they represent. The difference, or sampling error, varies depending on the particular sample selected. This variability is measured by the standard error of the estimate. BLS analysis is generally conducted at the 90-percent level of confidence. That means that there is a 90-percent chance, or level of confidence, that an estimate based on a sample will differ by no more than 1.6 standard errors from the true population value because of sampling error. Sampling error estimates are available at www.bls.gov/jlt/jolts_median_standard_errors.htm. The JOLTS estimates also are affected by nonsampling error. Nonsampling error can occur for many reasons including: the failure to include a segment of the population; the inability to obtain data from all units in the sample; the inability or unwillingness of respondents to provide data on a timely basis; mistakes made by respondents; errors made in the collection or processing of the data; and errors from the employment benchmark data used in estimation. Other information Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.