At Firms Under Two Years Old, Settled Workers’ Jobs End 1.6 Times as Often. Nearly Nine-Tenths of the Gap Is Jobs That Disappear.

Census data shows settled workers leave young firms faster than old ones in every industry. Most of the difference is not people walking out of jobs that stay. It is the jobs going.

Settled workers, young firms and old

The Census Bureau’s Quarterly Workforce Indicators follow jobs at private employers quarter by quarter. One measure tracks settled workers: people who had held a job for at least a full quarter and then saw it end. Across all private employers, that happened to 9.0% of settled workers in a typical quarter of 2024. Split by the age of the firm, the rate falls at every step. At firms 0–1 years old it was 13.6%. At 2–3 years it was 13.1%, at 4–5 years 12.6%, at 6–10 years 11.5% and at 11 years or more 8.3%. The youngest firms run at about 1.6 times the rate of the oldest, and the order by age held in every year from 2015 to 2024.

At a young firm, most of the extra departures are jobs that went away, not people leaving jobs that stayed.

Most of the gap is the job, not the person

A settled worker’s job can end two ways from the firm’s side. The firm can shrink, so the job disappears with the person in it. Or the job can remain while the person leaves, and the firm has to fill it again. The file reports both on the same base. At the youngest firms, jobs that disappeared on net came to 7.8% of settled employment per quarter, against 3.1% at the oldest. Exits from jobs that remained came to 5.8% against 5.2%. So of the 5.3-point gap, 4.7 points is jobs disappearing and 0.6 is people leaving jobs that stayed. In every year from 2015 to 2024, jobs disappearing accounted for between 76% and 93% of the gap.

It holds in every industry

Young firms are more common in some industries than others, so the national pattern could in principle be a mix effect. It is not. In each of the 19 private industry sectors, settled workers’ jobs ended more often at firms 0–1 years old than at firms 11 years or older, in every year from 2015 to 2024. The levels differ widely: in accommodation and food services the rates were 18.4% and 13.2% in 2024, in finance and insurance 8.7% and 4.9%. In 2024, in all 19 sectors, jobs disappearing made up more of the gap than exits from jobs that remained, and in 10 of them those exits were lower at the youngest firms than at the oldest.

What to take from this if you run a young firm

If people seem to leave your young company more often than they would leave an established one, the national numbers agree. But they also say where most of that difference comes from. At young firms, settled jobs end more often because the firm’s headcount moved down than because people left jobs that carried on, and the rate of those other exits is close to the rate at old firms. For a founder, that makes swings in headcount as much a part of the picture as people leaving. The data cannot show that any particular practice changes either.

Four limits worth holding. The data covers private employers, and firm age is the age of the firm, not of the worker’s job. A settled worker is one who held the job for at least a full quarter. Figures are averages of four quarters, not seasonally adjusted. And the file does not record whether a worker quit or was let go, and it does not separate firms that closed from firms that shrank.

Published by The Lonely Entrepreneur — the community and coaching platform for entrepreneurs who are building alone. lonelyentrepreneur.com

This article is for educational purposes and is not a substitute for professional financial or legal advice.