From a recruiting industry standpoint, it’s often assumed that increased labor mobility equates with increased job change velocity, which is a positive factor for recruiting activity. However, this trend may be starting to shift.

A man leaving a business.

In recent years, the United States has seen an increase in workers leaving and changing jobs — a phenomenon known as “The Great Resignation.” The reasons behind this trend are not yet entirely clear. Possible explanations include health and safety concerns, workers reevaluating their work-life balance, and the effects of remote work.

Some argue that “The Great Resignation” is merely a result of fluctuations in the business cycle. This trend is a reversal of the long-term decline in labor mobility that began in the 1980s and was reflected in various data, including the job-to-job transition rate and the number of hirings and separations. The ‘quits’ rate, which measures the proportion of jobs that workers quit in a given month, provides insight into labor mobility.

The Rising Rate of Quits

Until roughly 2017, the quits rate reflected the overall decline in labor mobility during this period, particularly during the Great Recession. The more recent pandemic-induced recession caused a sharp decline in job mobility, particularly in voluntary job changes. However, the quits rate has grown since that time, peaking at 3% and remaining comfortably above any pre-pandemic level.

The reasons for this sudden increase in labor mobility are disputed, with some arguing that it is temporary and others seeing it as a long-term trend. The potential benefits of increased mobility are significant, especially for young workers, but there are also concerns about increased uncertainty and inefficiency in the labor market.

Nobody knows what is currently driving or inhibiting labor mobility.

Ultimately, economists will need to develop models and test them empirically to gain a rigorous and thoughtful understanding of what the current trend in labor mobility means for American workers. In other words, nobody knows what is currently driving or inhibiting labor mobility.

The Rising Rate of Mortgage Interest

Another wrinkle is the rise in interest rates over the past 18 months, leading to an increase in housing mortgage finance rates. This has resulted in homeowners being effectively locked into their mortgages.

A new paper by Professors Julia Fonseca and Lu Liu reveals that homeowners with mortgages in the US can only move to a different home after paying off their existing mortgage and then refinancing their home with a new mortgage. Those caught in a mortgage lock-in can only relocate by buying a cheaper home or increasing their earnings, in addition to covering the costs of moving and refinancing.

The paper’s authors build their case around the metric of the mortgage rate differential, which is the difference between the mortgage rate locked in at purchase and the current market rate. The paper found that a decline in mortgage rate differentials reduces moving rates, which could explain a decline in moving by around 25% between 2018 and the next 10 years.

Household-specific mortgage rate deltas (Δr), measured as the difference between the mortgage rate that the household locked in at the time of mortgage origination and the current average 30-year fixed mortgage rate.
Household-specific mortgage rate deltas (Δr), measured as the difference between the mortgage rate that the household locked in at the time of mortgage origination and the current average 30-year fixed mortgage rate. (Fonseca / Liu)

Additionally, the study found that mortgage lock-in discourages labor mobility. Interestingly, the U.K. and Canada have a different mortgage market, where many more home loans are assumable and portable —i.e. the loan can follow an owner to a different dwelling. Such reforms in US practice could have a material effect on labor mobility.

The Rise of Remote Work

In our opinion at Main Sequence Technology, the ‘X factor’ in this situation is remote work and the increasing digitization of any business processes that’s amenable to virtual performance.

Recently released Census data shows that remote work has increased unevenly across the United States, with the highest rate of remote work being in Washington, DC, followed by San Francisco, CA, and Austin, TX. Remote work is clustered along coastal areas and mega-growth cities, but is also prevalent in a variety of other places.

The remote work share has rocketed from 5.6% in 2019 to 17.9% in 2021 to an estimated 33.5% for 2023 at the national level, meaning more than a third of all workers are able to do their jobs away from a fixed office at least part of the time. Remote work is related to occupation mix, higher education levels, longer commute times, and more expensive housing markets.

We assume that remote work will accelerate labor mobility velocity, while higher interest rates may inhibit labor mobility. It remains unknown, and unknowable, what effect future policy or social changes may have on labor mobility, as the pandemic emphatically demonstrated. Recruiting looks to benefit from current trends, as there is no sign of remote work or digitization slowing, even in the face of potential recession and already-felt rises in the real costs of borrowing.


Martin Snyder is a co-founder and Principal at Main Sequence Technology, Inc.

What started out as a good intention – using legacy hiring data to streamline the candidate screening process – had the unintended consequence of perpetuating hiring bias. In the case of one online retail giant, recruitment AI learned to exclude particular groups of people from certain roles.

As of 2023, New York has legislated against ‘automated employment decision rules’. Other states are sure to follow. Clearly, the use of AI in recruitment isn’t quite there – yet. (When it comes to artificial intelligence (AI) in recruitment, you probably already know the story so far. If you don’t, then we highly recommend that you check out our blog post about the potential and the pitfalls.)

However, what these developments have done is help highlight how technology could be used to support diversity and inclusivity in recruitment. Let’s take a closer look.

Overcoming Historical Bias 

When recruitment AI takes historical hiring data, let’s say for software developers, it discovers a historical trend. In this example, the hiring trend leans towards white males of a certain age. So when the AI uses this data to potentially screen candidates for a software developer position – guess what? It screens out candidates who don’t fit the criteria. Therein lies the problem with using ‘automated employment decision rules’ – they’re susceptible to historical bias.

If you always do what you’ve always done, you’ll always get the same result.

What recruitment AI has exposed is an inherent structural issue within the employment market where groups of people were not getting shortlisted, not getting interviewed, and not getting hired because of who they were as opposed to what they could do. What we’re seeing today is an adjustment to that inequality through a confluence of history and technology which enables recruiters to not only create a more inclusive workforce, but to proactively recruit talent from more diverse backgrounds. 

Offering distance-based roles is just one example of how employers and their recruiters can reach a wider and more diverse talent pool by looking beyond their city limits or state lines into previously overlooked communities or social groups. Similarly, ATS and CRM software can help recruiters specifically target a wider demographic of candidates, which simultaneously improves their chances of acquiring the right talent for the right role.

Facilitating Diversity Of Thought

As organizations actively seek to increase the diversity of their workforce and create more inclusive environments, it falls to recruiters to increase the appeal of open roles to a broader audience. That means positioning the company’s employer brand and job postings in a way that appeals to many different types of individuals, irrespective of their age, skin color, sexual orientation, or gender. Through their recruiting efforts, employers need to ensure that underrepresented groups become an integral part of their organization. Groups of people who have been overlooked in the past will need greater opportunity to not only get hired, but also progress into leadership roles.

Diversity comes in many different forms.

One of the great things about increasing workforce diversity is that it brings in new ideas and perspectives. It’s healthy for organizations to encourage diversity of thought, and to openly welcome and facilitate a range of viewpoints, which can ultimately help to drive business forward. Instead of speaking with one voice, companies can embrace a range of different voices and therefore increase their appeal to people from different backgrounds.

The other benefit of having a diverse and inclusive workforce is that it makes everyone feel more welcome. In turn, this increases employee happiness. A happier workforce is usually a more productive one. A more productive workforce creates better business success and increased revenues. 

Technology As A Force For Good

Diversity and Inclusion in the work environment is highest in stock photos.
Studies show that workplace diversity is at it’s peak among employees depicted in stock photography.

Unfortunately, some employers might look at a stack of resumes and discount potential candidates based on their name alone. If the name didn’t sound “right,” if it wasn’t the sort of name that was perceived to traditionally fit with a certain role, it ended up in the ‘no’ pile. Studies as recent as 2021 have shown that name discrimination is still having an impact. This means some of the best, well-qualified talent may be out of the running even before the race has even begun.

These days, recruitment technology allows recruiters to proactively search for a more diverse range of candidates based on factors beyond their name. This needs to be carefully aligned with the recruiter’s fundamental purpose, which is to bring in the best talent for the role, whoever they may be. 

Ultimately, organizations need recruiting practices that ensure their workforce reflects the totality of the population they serve; while getting the best available talent. To that end, recruiters need an ATS with the ability to search for candidates based on a range of quantifiable skill sets. 

At the same time, the way in which recruiters source, track, and recruit individuals needs to be transparent and compliant with the laws of a city, state, or country. The right ATS and CRM platform can help recruiters ensure that a more diverse range of candidates make the cut, helping the organizations they serve to become more inclusive. 

PCRecruiter is a powerful recruitment platform which partners with a range of systems and services that provide cutting-edge recruitment tools. View our integrations and partners.