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Why are there So Many More Hires Than Openings?

Openings and Hires measure two different phenomena.

Openings are created by SOC code. An opening can be created in one of two ways:

  1. Growth: An opening is created whenever a new job is created in an occupation, e.g. a hospital with 12 Registered Nurses on staff decides to hire a 13th RN to keep up with a growing workload.
  2. Replacement Need: An opening is created whenever a worker leaves an occupation (defined as a SOC code). This might include an RN retiring, or an Accountant (SOC 13-2011) switching careers and taking a job as an Economist (SOC 19-3011). In both cases, a vacuum is created that must eventually be filled by bringing a new worker into the occupation.

Openings due to growth come from Emsi’s job counts data. Openings due to replacements are calculated by applying the Bureau of Labor Statistics’ Separation Rate to Emsi job counts, resulting in an estimated number of occupations that will need replacement workers.

Hires are tracked in the Census Bureau’s Quarterly Workforce Indicators (QWI) dataset, which tracks Social Security numbers on business payrolls by quarter. A hire is counted every time a business adds an SSN to its payroll that was not present during the prior quarter.

An opening can be thought of as the removal of a worker from an occupation (SOC code). Hires can be thought of as the number of moves that are made in the occupation as a result of the opening, until the occupation returns to equilibrium. Consider the retiring RN mentioned above. Her retirement creates an opening at the hospital where she’s worked for the last 10 years. The hospital hires a new RN from the neighboring physician’s office to take her place. Another RN who worked at a local school takes the now-vacant position at the physician’s office. Finally, the school hires a brand-new RN, fresh BSN in hand, who was previously not in the workforce. This chain of events began with one opening (the retiring RN) and resulted in three hires (by the hospital, the physician’s office, and the school) before the occupation returned to equilibrium. Sometimes only one hire is needed (the original RN retires and the hospital hires the recent BSN grad). Sometimes many hires are needed (the chain above extends through an additional 6 establishments before a worker is hired from outside the occupation, restoring equilibrium).

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