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Technical Note
The data for the Job Openings and Labor Turnover Survey (JOLTS)
are collected and compiled monthly from a sample of business
establishments by the Bureau of Labor Statistics (BLS).
Collection
In a monthly survey of business establishments, data are
collected for total employment, job openings, hires, quits, layoffs
and discharges, and other separations. Data collection methods
include computer-assisted telephone interviewing, touchtone data
entry, fax, e-mail, and mail.
Coverage
The JOLTS program covers all private nonfarm establishments such
as factories, offices, and stores, as well as federal, state, and
local government entities in the 50 states and the District of
Columbia.
Concepts
Industry classification. The industry classifications in this
release are in accordance with the 2007 version of the North
American Industry Classification System (NAICS). In order to
ensure the highest possible quality of data, State Workforce
Agencies verify with employers and update, if necessary, the
industry code, location, and ownership classification of all
establishments on a 3-year cycle. Changes in establishment
characteristics resulting from the verification process are always
introduced into the JOLTS sampling frame with the data reported for
the first month of the year.
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. Establishments submit job openings information 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
regardless of whether a suitable candidate is found, 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. Hires are 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. Separations are the total number of terminations of
employment occurring at any time during the reference month, and
are reported by type of separation--quits, layoffs and discharges,
and other separations. Quits are voluntary separations by
employees (except for retirements, which are reported as other
separations). Layoffs and discharges are involuntary separations
initiated by the employer and include 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.
Other separations include retirements, transfers to other
locations, deaths, and separations due to disability. Separations
do 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, dividing the number by employment and
multiplying by 100.
Annual estimates. Annual estimates of rates and levels
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of hires, quits, layoffs and discharges, other separations, and total
separations are released with the January news release each year.
The JOLTS annual level estimates for hires, quits, layoffs and
discharges, other separations, and total separations are the sum of
the 12 published monthly levels. The annual rate estimates 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. Note that both the JOLTS and CES
annual levels are rounded to the nearest thousand before the annual
estimates are calculated. Consistent with BLS practices, annual
estimates are published only for not seasonally adjusted data.
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. Only jobs still open on the last day
of the month are counted. For the same reason job openings cannot
be cumulated throughout each month, annual figures for job openings
cannot be created by summing the monthly estimates. Hires and
separations are flow measures and are cumulated over the month with
a total reported for the month. Therefore, the annual figures can
be created by summing the monthly estimates.
Special Collection Procedures
An implied measure of employment change can be derived from the
JOLTS data by subtracting separations from hires for a given
month. Aggregating these monthly changes historically produced
employment levels that overstated employment change as measured by
CES at the total nonfarm level. Research into this problem showed
that a significant amount of the divergence between the CES
employment levels and the derived JOLTS employment levels was
traceable to the Employment Services industry and to the State
Government Education industry. In the former industry, businesses
have a difficult time reporting hires and separations of temporary
help workers. In the latter industry, employers have difficulty
reporting hires and separations of student workers. BLS now
devotes additional resources to the collection, editing, and review
of data for these industries. BLS analysts more closely examine
reported data that do not provide a consistent picture over time,
and re-contact the respondents as necessary. Analysts work with
the respondents to adjust their reporting practices as possible.
Units that cannot be reconciled but are clearly incorrect on a
consistent basis are not used, they are replaced by imputed values
using standard techniques.
Sample and estimation methodology
The JOLTS survey design is a random sample of 16,000 nonfarm
business establishments, including factories, offices, and stores,
as well as federal, state, and local governments in the 50 states
and the District of Columbia. The establishments are drawn from a
universe of over 9.1 million establishments compiled as part of the
operations of the Quarterly Census of Employment and Wages (QCEW),
program. This program includes all employers subject to state
Unemployment Insurance (UI) laws and federal agencies subject to
Unemployment Compensation for Federal Employees (UCFE).
The sampling frame is stratified by ownership, region, industry
sector, and size class. The JOLTS sample is constructed from
individual panels of sample units drawn on an annual basis. The
full annual sample consists of one certainty panel composed of only
large units selected with virtual certainty based on their size and
24 non-certainty panels. Each month a new non-certainty panel is
rolled into collection, and the oldest non-certainty panel is
rolled out. This means that at any given time the JOLTS sample is
constructed from panels from three different annual sampling
frames. The entire sample of old plus new panels is post-
stratified and re-weighted annually to represent the most recent
sampling frame. Additionally, the out-of-business establishments
are removed from the old panels. The annual sample is supplemented
with a quarterly sample of birth establishments (i.e., new
establishments) to better reflect the impact of younger
establishments in the JOLTS sample.
JOLTS total employment estimates are benchmarked monthly to the
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.
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. BLS has developed a model to
estimate birth/death activity for current months by examining the
birth/death activity from previous years on the QCEW and projecting
forward to the present using an econometric technique known as X-12
ARIMA modeling. The birth/death model also uses historical JOLTS
data to estimate the amount of “churn” (hires and separations) that
exists in establishments of various sizes. The model then combines
the estimated churn with the projected employment change to
estimate the number of hires and separations taking place in these
units that cannot be measured through sampling.
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The model-based estimate of total separations is distributed to
the three components – quits; layoffs and discharges; and other
separations - in proportion to their contribution to the sample-
based estimate of total separations. Additionally, job openings
for the modeled units are estimated by computing the ratio of
openings to hires in the collected data and applying that ratio to
the modeled hires. The estimates of job openings, hires, and
separations produced by the birth/death model are then added to the
sample-based estimates produced from the survey to arrive at the
estimates for openings, hires, and separations.
Seasonal adjustment
BLS seasonally adjusts several JOLTS series using the X-12-ARIMA
seasonal adjustment program. Seasonal adjustment is the process of
estimating and removing periodic fluctuations caused by events such
as weather, holidays, and the beginning and ending of the school
year. Seasonal adjustment makes it easier to observe fundamental
changes in the level of the series, particularly those associated
with general economic expansions and contractions. 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 the data for the current month.
Alignment procedure
JOLTS hires minus separations should be comparable to the CES net
employment change. 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.
The Monthly Alignment 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 trend and the CES net employment change is
calculated. Next, the JOLTS implied employment trend is adjusted to
equal the CES net employment change through a proportional
adjustment. This proportional adjustment procedure adjusts the two
components (hires, separations) proportionally to their
contribution to the total churn (hires plus separations). For
example, if hires are 40 percent of the churn for a given month,
they will receive 40 percent of the needed adjustment and
separations will receive 60 percent of the needed adjustment. 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. The Monthly Alignment procedure assures a close
match of the JOLTS implied employment trend with the CES trend. The
CES series is considered a highly accurate measure of net
employment change owing to its very large sample size and annual
benchmarking to universe counts of employment from the QCEW
program.
Using JOLTS data
The JOLTS data series on job openings, hires, and separations are
relatively new. The full sample is divided into panels, with one
panel enrolled each month. A full complement of panels for the
original data series based on the 1987 Standard Industrial
Classification (SIC) system was not completely enrolled in the
survey until January 2002. The supplemental panels of
establishments needed to create NAICS estimates were not completely
enrolled until May 2003. The data collected up until those points
are from less than a full sample. Therefore, estimates from
earlier months should be used with caution, as fewer sampled units
were reporting data at that time.
In March 2002, BLS procedures for collecting hires and
separations data were revised to address possible underreporting.
As a result, JOLTS hires and separations estimates for months prior
to March 2002 may not be comparable to estimates for March 2002 and
later.
The federal government reorganization that involved transferring
approximately 180,000 employees to the new Department of Homeland
Security is not reflected in the JOLTS hires and separations
estimates for the federal government. The Office of Personnel
Management's record shows these transfers were completed in March
2003. The inclusion of transfers in the JOLTS definitions of hires
and separations is intended to cover ongoing movements of workers
between establishments. The Department of Homeland Security
reorganization was a massive one-time event, and the inclusion of
these intergovernmental transfers would distort the federal
government time series.
JOLTS uses moving averages as seasonal filters in seasonal
adjustment. JOLTS seasonal adjustment includes both additive and
multiplicative seasonal adjustment models and REGARIMA (regression
with autocorrelated 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.
Reliability of the estimates
JOLTS estimates are subject to both sampling and nonsampling
error. When a sample rather than the entire population is
surveyed, 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
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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. Estimates of
sampling errors are available upon request.
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; TDD
message referral phone: 1-800-877-8339.
