Labor turnover lulls in May, as employers hit reset button on hiring plans

The labor market is experiencing some déjà vu.

Total labor turnover in May was largely unchanged compared to April, the latest job openings and labor turnover survey (JOLTS) data from the Bureau of Labor Statistics reported. This year, job openings remain elevated, though hires, quits, and layoffs while firings were once again unchanged at lower levels. But that’s not the only familiarity in the latest data: Employers have reported little change in job turnover in May now since 2024, suggesting that late spring may emerge as the cyclical period when employers reset their hiring plans for the rest of the year, one expert tells HR Brew.

Diving into the data. Employers reported 7.6 million total job openings in May, relatively unchanged from April, remaining at their highest-recorded levels in two years. Wholesale trade reported the largest spike in openings, up by 71,000 month over month, followed by accommodation and food services, and real estate and rental and leasing.

On the other hand, healthcare and social assistance, which for the past several years singularly led job growth in the US, saw a decline of 115,000 in job openings. The decline in demand in this sector could be a sign that healthcare no longer dominates the labor market, economists noted.

“It is possible that the demand for healthcare workers has run its course,” Theresa Sheehan, chief economist at Econoday, wrote on LinkedIn.

However, the elevated job openings in April failed to materialize into increased hiring. Total hires fell by 45,000 month over month, to 5.17 million in May. Government hiring saw a 32,000 increase in hires, including 11,000 specifically in the federal government. Accommodation and food services also saw a spike of 26,000 hires in May.

Most other sectors, however, saw minimal increases in hires or even declines in total hires. Transportation, warehousing, and utilities reported the largest contraction in hiring, declining by 40,000 in May, followed by construction, and wholesale trade.

Total quits were also relatively unchanged, at 3.1 million in May, though declined by more than 200,000 year over year. Layoffs and discharges, meanwhile, had risen by 41,000 month over month to 1.7 million, though Nicole Bachaud, a labor economist at ZipRecruiter, said the uptick was “not enough to make waves.”

While economists noted that the increase in job openings is a positive sign, the fact that labor turnover, and specifically hires, stagnated again is discouraging for workers and job seekers who feel shut out by employers.

“Openings can be taken as employers’ betting on the future—we’d like to think they’re opening roles in hopes of filling them. But until we see that translate into increased hiring rates, those open roles are merely plans. Having more jobs to apply to is only helpful if your chances of getting hired increase,” Elizabeth Renter, senior economist at NerdWallet, said in an emailed statement to HR Brew.

Zoom out. Since 2024, the JOLTS data has recorded little to no changes in labor turnover data between April and May, and that slowing labor turnover in late spring could point to an emerging trend in regards to hiring planning, Isaac Hagen, SVP of verticals and sales excellence at ManpowerGroup, told HR Brew.

Historically, businesses set and executed their hiring plans for a full year. But as economic uncertainty has forced businesses to become risk-averse and intentional in their hiring strategy, this lull in May suggests they’re reevaluating their budgets and organizational needs, and adjusting their talent management plans for the rest of the year to account for those changes, Hagen said.

Reevaluating and readjusting your organization’s hiring plan is a good thing, according to Hagen, as it gives employers agility as they navigate the labor market.

“The market is changing so quickly, skills are changing so quickly. I do think a much more agile approach to talent planning, workforce planning is a better approach, but I think a lot of what we’re seeing, especially over the last year, has to do a lot more risk aversion,” he said. “I would make sure you’re balancing the making sure it’s a strategic motion, not just a risk motion.”