More than two years ago, I wrote that the Great Resignation had become the big stay, with fewer workers leaving their jobs. Since then, staying put has become a mainstay of the labor market. In August, employee quits were down 14 percent from their pre-pandemic levels and 32 percent from their peak during the Great Resignation.
With the big stay sticking, let’s take a fresh look at private-sector turnover and pay.
Turnover is low
Turnover is measured by the number of people who leave an organization, either voluntarily through resignations or involuntarily due to firings and layoffs.
For the past two years, the August rate of turnover has held at 5.8 percent, the lowest level in the nine years ADP Research has been tracking this data.
Pay is a factor
One reason turnover has slowed is that workers are seeing less remunerative upside.
In our data, August turnover peaked in 2022, when there were big gains to be had from switching jobs. That month, pay growth for job-changers was 15.3 percent year-over-year, while the gain for job-stayers was a lower but still healthy 7.6 percent, according to ADP Pay Insights data. That’s a 7.7 percentage-point difference.
In the last two years, the pay premium has shrunk significantly, to 2.1 percentage points in August 2024 and 2.6 percentage points in August 2025. The pay premium for changing jobs has been less than 3 percentage points for 25 straight months, giving workers less motivation to quit.
Spotlight: Small employers
Employers with fewer than 50 people on payroll had a turnover rate of only 4.9 percent in August. Turnover at every other size of employer was higher, in a narrow range of 5.7 percent and 6.1 percent.
According to our analysis of the latest Quarterly Census of Employment and Wages, which provides a near-complete count of U.S. employment, small businesses employ a lot of people. Combined, employers with fewer than 50 people account for nearly 44 percent of U.S. employment. Very large businesses, those with more than 1,000 people on payroll, employ only 12 percent of the nation’s workforce.
My take
Turnover interpretations depend on the context of current labor market conditions. When the economy and labor markets are strong, high turnover could mean that workers are leaving their jobs for more profitable opportunities. When these conditions are weak, high turnover could be a sign that employers are letting people go at faster rates.
By the same token, low turnover could signal a healthy labor market that is in balance, or it could portend a stagnant market in which there are few rewards for switching jobs.
In August, the labor market was characterized by its low-hire, low-fire equilibrium. The ADP National Employment Report for September showed further signs of a slowdown in hiring momentum.
Over the coming months, I’ll be watching closely to see if the low turnover we saw in August edges up or down for the right reasons (improved labor-market conditions) or the wrong ones (more labor-market weakening).
The week ahead
Government data is in limbo during this holiday-shortened week due to the ongoing federal shutdown. We’re not likely to get this week’s releases on September retail sales and producer prices. Our last read on initial jobless claims, a proxy for layoffs, was for the week ending Sept. 20. At that time, layoffs were holding near historical lows. As housing continues to be challenged by low inventory and high prices, the latest data we have is from August, which showed a 6 percent year-over-year decline in new residential construction starts.
