Job Openings and Labor Turnover Technical Note

Technical Note


This news release presents statistics from the Job Openings and Labor
Turnover Survey (JOLTS). The Bureau of Labor Statistics (BLS) collects
and compiles JOLTS data monthly from a sample of nonfarm
establishments. A more detailed discussion of JOLTS concepts and
methodology is available online at www.bls.gov/opub/hom/pdf/homch18.pdf.

Coverage and collection

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. Data are collected for total employment, job
openings, hires, quits, layoffs and discharges, other separations, and
total separations.

Concepts

Industry classification.  The industry classifications in this release
are in accordance with the 2012 version of the North American Industry
Classification System (NAICS).

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 vacations or other paid leave. Proprietors or
partners of unincorporated businesses, unpaid family workers, or
persons on leave without pay or on strike 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 information is collected for the last
business day of the reference month. A job opening requires that: 1) a
specific position exists and there is work available for that
position, 2) work could start within 30 days whether or not the
employer found a suitable candidate, and 3) the employer is actively
recruiting from outside the establishment to fill the position.
Included are full-time, part-time, permanent, short-term, and seasonal
openings. Active recruiting means that the establishment is taking
steps to fill a position by advertising in newspapers or on the
Internet, posting help-wanted signs, accepting applications, or using
other similar methods.

Jobs to be filled only by internal transfers, promotions, demotions,
or recall from layoffs are excluded. Also excluded are jobs with start
dates more than 30 days in the future, jobs for which employees have
been hired but have not yet reported for work, and jobs 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.  The hires level is the total number of additions to the
payroll occurring at any time during the reference month, including
both new and rehired employees, full-time and part-time, permanent,
short-term and seasonal employees, employees recalled to the location
after a layoff lasting more than 7 days, on-call or intermittent
employees who returned to work after having been formally separated,
and transfers from other locations. The hires count does not include
transfers or promotions within the reporting site, employees returning
from strike, employees of temporary help agencies or 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.  The separations level is the total number of employment
terminations occurring at any time during the reference month, and is
reported by type of separation—quits, layoffs and discharges, and
other separations. (Some respondents are only able to report total
separations.) The quits count includes voluntary separations by
employees (except for retirements, which are reported as other
separations). The layoffs and discharges count is comprised of
involuntary separations initiated by the employer and includes layoffs
with no intent to rehire; formal layoffs 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. The other separations count includes retirements, transfers
to other locations, deaths, and separations due to disability. The
separations count does not include transfers within the same location
or employees on strike. 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.

Annual estimates.  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.

Sample and estimation methodology

The JOLTS survey design is a stratified random sample of 16,000
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 9.1
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.

JOLTS total employment estimates are benchmarked, or ratio adjusted,
monthly to the strike-adjusted employment estimates of the CES survey.
A ratio of CES to JOLTS employment is used to adjust the levels for
all other JOLTS data elements.

JOLTS business birth/death model

As with any sample survey, the JOLTS sample can only be as current as
its sampling frame. The time lag from the birth of an establishment
until its appearance on the sampling frame is approximately one year.
In addition, many of these new units may fail within the first year.
Since these universe units cannot be reflected on the sampling frame
immediately, the JOLTS sample cannot capture job openings, hires, and
separations from these units during their early existence. To
compensate for the inability to capture data from these
establishments, BLS has developed a birth/death model that uses 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 openings, hires, and separations.

Seasonal adjustment

BLS uses X-12 ARIMA to seasonally adjust several JOLTS series
utilizing moving averages as seasonal filters. 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.

Alignment procedure

The JOLTS measures 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 nonsampling 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.

This method applies the CES employment trends to the seasonally
adjusted JOLTS implied employment trend (hires minus separations)
forcing them to be approximately the same, while preserving the
seasonality of the JOLTS data. First, the two series are seasonally
adjusted and the difference between the JOLTS implied employment
change and the CES net employment change is calculated. Next, the
JOLTS implied employment change is adjusted to equal the CES net
employment change through a proportional adjustment. This procedure
adjusts the two components (hires, separations) proportionally to
their contribution to the total churn (hires plus separations). The
adjusted hires and separations are converted back to not seasonally
adjusted data by reversing the application of the original seasonal
factors. After the Monthly Alignment Method has been used to adjust
the level estimates, rate estimates are computed from the adjusted
levels.

Reliability of the estimates

JOLTS estimates are subject to both sampling and nonsampling error.
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 exact difference, or sampling
error, varies depending on the particular sample selected, and 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.

Table of Contents

Last Modified Date: December 09, 2014