A 0.9 percent quits rate is borrowed time
The June JOLTS report landed on 4 August and got read the way these usually get read. Job openings flat at 7.4 million. Quits flat at 3.2 million. Nothing to see.
Then there's table 4. Quits in finance and insurance fell to 0.9 percent.
Under 1 percent. That's the lowest quits rate of any private industry in the report. Retail was 3.0. Leisure and hospitality was 4.2. The all-industry number sat at 2.0 and hasn't moved in three months.
In June, fewer than 1 in 100 people working in finance and insurance voluntarily left their job.
0.9 percent, and falling
A year ago that line read 1.3. In March it was 1.4, then 1.1 in April, 1.2 in May, 0.9 in June.
If you run a bank, that lands in your numbers as a good year. Low regrettable attrition. The retention slide in the board deck looks great.
I'd hold off on taking credit for it.
What's actually holding them
Two weeks ago I wrote about ADP's July numbers, where job changers were getting 7 percent and job stayers 4.4. Financial activities led every sector on pay growth for the people who stayed put.
Put that next to a 0.9 percent quits rate and the picture gets clear. Your people are being paid well to sit still, the premium it takes to move them is wide, and most of them have run the math and decided this isn't their year.
The West went the other way
One more line worth sitting with. The quits rate in the West rose to 2.1 percent in June from 1.8 in May, a jump of 0.3 points and 96,000 people. Every other region was flat or down.
So finance froze while the labor market around it loosened.
I don't want to overread one month of regional data. But if both lines hold, the people sitting next to your bankers at the school pickup are changing jobs again while your bankers stay put. That gap tends to close.
What this data does not say
"Finance and insurance" is a big tent. Insurance carriers, securities, credit intermediation, all of it sits in that line. There's no way to pull California community banks out of it, and a commercial lender's decision looks nothing like a claims adjuster's.
This is June data, published 4 August, and marked preliminary. May got revised. July lands on 1 September and may say something different.
The West region runs from Alaska to Wyoming, 13 states. That's not a California read.
And a rate tells you nothing about who. 0.9 percent is an average across an entire payroll. It doesn't separate the producer with a portable book from the person who's been coasting for 3 years.
Wondering who would actually go?
When the quits rate normalizes, the people with options move first. I place production and credit talent across California community banks, and I can tell you who in your market is already listening.
Talk to JonWhat I'd do about it
Treat the quiet as a pause, and use it.
Name the 5 people you'd be genuinely hurt to lose. Then be honest about which of them are staying because they want to be there, and which are staying because leaving is expensive right now. Those are different people, and you can usually tell which is which if you ask properly.
Fix something for the second group while you still have room. Comp is the obvious lever and often the wrong one. In 25 years of doing this, the reasons I hear most are a credit process that takes 5 weeks to say no, a manager who won't back them in committee, and a seat with no visible next step.
A 0.9 percent quits rate is the best retention number your bank will see for a while. The market set it, and the market gets a vote on how long it lasts. When it normalizes, the people with options move first, and you already know who they are.
Which of your top 5 would still be here if moving got easy again?
Sources
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