While recession fears may be looming in the minds of some, new data from the Bureau of Labor Statistics shows that the economy and job market may actually be strengthening. 



The quits rate—or the percentage of all employees who quit during a given month—rose to 2.4% in July, according to the BLS’s Jobs Openings and Labor Turnover report, released Tuesday. That translates to 3.6 million people who voluntarily left their jobs in July.



This is the highest the quits rate has been since April 2001, just five months after the Labor Department began tracking it. According to Nick Bunker, an economist at the Indeed Hiring Lab, the quits rate tends to be a reflection of the state of the economy. 



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“The level of the quits rate really is a sign of how strong the labor market is,” he says. “If you look at the quits rate over time, it really drops quite a bit when the labor market gets weak. During the recession it was quite low, and now it’s picked up.”



The monthly jobs report, released last week, revealed that the economy gained 130,000 jobs in August, which is 20,000 less than expected, and just a few weeks earlier, the BLS issued a correction stating that it had overestimated by 501,000 how many jobs had been added to the market in 2018 and the first quarter of 2019. Yet despite all that, employees still seem to have confidence in the job market.Today In: Leadership



The quits level, according to the BLS, increased in the private sector by 127,000 for July but was little changed in government. Healthcare and social assistance saw an uptick in departures to the tune of 54,000 workers, while the federal government saw a rise of 3,000.



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The July quits rate in construction was 2.4%, while the number in trade, professional and business services, and leisure and hospitality were 2.6%, 3.1% and 4.8%, respectively. Bunker of Indeed says that the industries that tend to see the highest rate of departuresare those where pay is relatively low, such as leisure and hospitality. An unknown is whether employees are quitting these jobs to go to a new industry or whether they’re leaving for another job in the same industry. Either could be the case, says Bunker.



In a recently published article on the industries seeing the most worker departures, Bunker attributes the uptick to two factors—the strong labor market and faster wage growth in the industries concerned: “A stronger labor market means employers must fill more openings from the ranks of the already employed, who have to quit their jobs, instead of hiring jobless workers. Similarly, faster wage growth in an industry signals workers that opportunities abound and they might get higher pay by taking a new job.”



Even so, recession fears still dominate headlines. According to Bunker, the data shows that when a recession hits, employers pull back on hiring and workers don’t have the opportunity to find new jobs. Thus, workers feel less confident and are less likely to quit. 



READ MORE | <a href="https://www.forbesafrica.com/economy/2019/04/08/south-africas-informal-sector-why-people-get-stuck-in-precarious-jobs/">South Africa’s Informal Sector: Why People Get Stuck In Precarious Jobs</a>



“As the labor market gets stronger, there’s more opportunities for workers who already have jobs. So they quit to go to new jobs or they quit in the hopes of getting new jobs again,” Bunker says. He also notes that recession fears may have little to do with the job market, instead stemming from what is happening in the financial markets, international relations or Washington, D.C.



So what does the BLS report say about the job market? “Taking this report as a whole, it’s indicating that the labor market is still quite strong, but then we lost momentum,” Bunker says. While workers are quitting their jobs, he says that employers are pulling back on the pace at which they’re adding jobs. “While things are quite good right now and workers are taking advantage of that,” he notes, “those opportunities moving forward might be fewer and fewer if the trend keeps up.”



-Samantha Todd; Forbes

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Why The High Number Of Employees Quitting Reveals A Strong Job Market

South Africa has a jobs crisis. In the fourth quarter of 2018, 6.14 million people were out of work, an unemployment&nbsp;<a href="http://www.statssa.gov.za/publications/P0211/P02114thQuarter2018.pdf">rate of 27.1%</a>, which is one of the highest rates in the world, along with sub-Saharan African countries like&nbsp;<a href="https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?view=chart">Lesotho, Mozambique and Namibia</a>.



South Africa’s labour market has another important distinction. Only about three million people who are working – about 18% of all employed (<a href="http://www.statssa.gov.za/publications/P0211/P02114thQuarter2018.pdf">16.53 million</a>) – are in the informal sector. That’s much lower than other developing countries. For example in India and Ethiopia, up to 50% of those with jobs are employed in the informal sector. The figure is as high as 90% in Ghana and Mali.



There are two schools of thought around the role and value of a country’s informal sector. Some argue that it’s an important alternative to the limited opportunities available in the formal sector; a survivalist strategy that allows those without much formal education to work and earn money. In addition, others argue, the informal sector is also an important space for entrepreneurs.



But there are some who disagree, arguing that employment in the informal sector tends to be poorly paid and precarious. A mere 20% of informal sector employees are hired permanently, compared to 70% of those in the formal sector.



Little is known about how many people transition between the two sectors, a phenomenon called “churning”. Addressing this knowledge gap is important for a number of reasons. These include the fact that informal workers may be spending some time in the formal sector, getting valuable skills and work experience to boost their chances at formal employment, with the hope that they eventually settle permanently in the formal sector, which would be good news.



Conversely, knowing whether there’s a high rate of transition from the formal to the informal sector would be cause for concern because it would suggest high rates of retrenchment and fewer formal job opportunities.



<h4 class="wp-block-heading">The data</h4>



We set out to understand “churning” between South Africa’s formal and informal sectors. To do this we analysed data from the country’s National Income Dynamics Study – a study that was conducted four times between 2008 and 2015 by the Southern Africa Labour and Development Research Unit based at the University of Cape Town’s School of Economics.



We found there was a lot of movement between the informal and formal sectors during these years. But there were very few instances of people making successful, lasting transitions from informal to formal sector employment.



This emphasises South Africa’s skills mismatch. The formal sector requires skills that those in the informal sector simply don’t have. More education and support is necessary to bridge this gap.



Our data were drawn from the National Income Dynamics Survey, which is the first national household panel study in South Africa. It examines the living standards of individuals and households over time.



By analysing data from the four waves of the study we were able to make some key findings about churning, and about the informal sector more broadly. These included:



<ul><li>Only 8% of those surveyed were inactive (7%) or unemployed (1%) in all four waves – that is, throughout the seven-year period. About 54% were employed in one to three waves, meaning they worked transitorily but not continuously;</li><li>only 3% worked in the informal sector in all four waves;</li><li>only 12% always worked in the formal sector during the seven years under review; and,</li><li>8% of individuals worked throughout the seven years under review but transitioned between the two sectors.</li></ul>



These results clearly indicate that a high proportion of the labour force participants have been in and out of employment (which is not surprising, given the country’s high unemployment rate), some workers enjoy the privilege of always working in the formal sector, and most importantly, churning between the informal and formal sectors definitely takes place to some extent.



The findings also emphasised how precarious the informal sector is. For instance, 67% of those who started off working in the formal sector in 2008 remained there seven years later. This suggests that for those who initially secured work in the formal sector, retrenchment likelihood is not as high as perhaps anticipated. The retention figure in the informal sector was just 39%. Only 27% of those in the informal sector successfully transitioned to the formal sector.



The country’s many social inequalities were evident in the data. Black women without school leaving certificates aged between 25 and 44 years were most likely to remain in the informal sector. Highly educated white men living in the urban areas of Gauteng and KwaZulu-Natal provinces were most likely to successfully transition from the informal to the formal sector.



<h4 class="wp-block-heading">Filling the gaps</h4>



Given what we’ve learned from this research, how might the government and policy makers deal with those who “churn”?



First, the country’s education system must do more to produce skilled labour in the areas the economy requires. Formal firms could help here, by providing assistance and information on what skills are needed and how to develop these. This implies that strengthening the partnership between industry and universities is important, as this would help those who are able to access higher education.



Those who don’t go on to higher education, or don’t complete their secondary schooling, also need to be helped. The government should more actively provide workshops and specialised assistance to enhance entrepreneurship skills and advise small informal firms on growth strategies. These incentives will assist in their growth, long-term sustainability and successful transition to the formal sector.



In addition, larger, more established formal firms can also play a role by helping to develop and train informal sector workers and providing expert guidance to informal firms. This assistance can be incentivised through tax reductions and the prospects of a larger collective market via the informal sector.



Lastly, the government should continuously alleviate the numerous barriers to the informal economy. These include limited credit and training opportunities, poor infrastructure and the red tape that makes it difficult to start a business.



&#8211;Moegammad Faeez Nackerdien Lecturer, University of the Western Cape



&#8211;Derek Yu Associate Professor, Economics, University of the Western Cape



-The Conversation



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South Africa’s Informal Sector: Why People Get Stuck In Precarious Jobs

So, you think you&#8217;re acing your job interview.



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Your interviewer seems to like you. You like your job interviewer. The camaraderie couldn&#8217;t be better.



Then comes the proverbial: &#8220;So, what questions do you have for me?&#8221;



Whether you&#8217;re&nbsp;<a href="https://www.forbes.com/sites/zackfriedman/2018/11/14/how-to-get-hired-at-google/#203b24261caf">interviewing for a job at Google</a>&nbsp;or joining your local small business, the questions that you ask your interviewer matter. It&#8217;s your opportunity to showcase your talents, knowledge, and judgment.



Here are 5 questions that you should never ask during a job interview (and three more that you should).



1. &#8220;So, how much will I get paid?&#8221;



This seems like a no-brainer, but for some reason, interviewees still think the question is fair play.



That said, it is a fair question. After all, you need to know how much you&#8217;ll be paid before you take the job. While that&#8217;s true, the interview is not the time to discuss salary.



If you receive a job offer, you can discuss salary at that time.



2. &#8220;How much vacation time will I get?&#8221;



Again, your vacation and personal time might be an important part of your calculus when deciding to take a job offer.



However, asking how much vacation time you&#8217;ll get demonstrates you&#8217;re focused more on time off than working.



Like salary, your vacation and other benefits should be reflected in the job offer. You can ask all the questions related to salary and benefits at that time. You can also schedule a follow-up session with the human resources department for a benefits deep-dive.



3. &#8220;How quickly can I get promoted?&#8221;



Climbing the ladder of your potentially new organization is admirable.



However, don&#8217;t assume during the interview that you have the job. It&#8217;s important to understand options for movement &#8211; both upward and lateral &#8211; within the organization. If you plan to work at this organization, it&#8217;s essential to understand your career trajectory.



You don&#8217;t want to come off as entitled. This question may convey to the interviewer that you think you already have the job (when you don&#8217;t).



4. &#8220;Why did the company fire so many people last month?&#8221;



It&#8217;s never a good sign to read about layoffs.



This is especially true when you may be joining an organization after a big headcount reduction.



It&#8217;s a fair question, and you should understand the details. However, the job interview is the wrong time.



When you receive your job offer, you can have a frank conversation with your manager about the layoffs, the rationale, whether additional layoffs are expected and other related information to fortify your understanding.



Before accepting a job, make sure to understand if the headcount reduction is expected to be ongoing or if it was a one-time occurrence.



5. &#8220;So, who do you consider your competition?&#8221;



Instead of asking your interviewer about the competition, spend the time asking questions that demonstrate your interest in the company and also show that you&#8217;ve done research prior to your interview.



Before the interview, you should have conducted due diligence on the competitive landscape.



That includes understanding key competitors, relative strengths and weaknesses, the supply chain, key opportunities and threats, barriers to entry and other pertinent market dynamics.



You&#8217;re better off weaving this information into the interview, rather than asking during the question period.



3 Questions That You Can Ask During An Interview



Here are three potential questions that you could ask during your job interview:



1. &#8220;What are the best attributes of the company&#8217;s culture?&#8221;



<ul><li>Show your interest in company culture.</li><li>Understand the key values that set this company apart.</li><li>Learn more about the company&#8217;s mission and value proposition.</li></ul>



2. &#8220;How much is collaboration across departments encouraged?&#8221;



<ul><li>Determine whether collaboration is promoted internally.</li><li>Learn more about ways in which collaboration helps create value for employees and customers.</li><li>See if the interviewer can share concrete examples to further your understanding.</li></ul>



3. &#8220;What would you like the person that you hire to accomplish over the next 6-12 months?&#8221;



<ul><li>Learn about your interviewer&#8217;s goals for the position.</li><li>Understand expectations.</li><li>This will give you insights because the question is specific to the role and shows your ability to think longer-term.</li><li>-Zack Friedman</li></ul>

Tag: Job

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Why The High Number Of Employees Quitting Reveals A Strong Job Market

South Africa’s Informal Sector: Why People Get Stuck In Precarious Jobs

5 Questions You Should Never Ask During A Job Interview