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3 Ways to Keep Public Employees from Leaving

The turnover rate among young state employees is rising. Raising pay might be a way to change that, but it’s not a practical one.

Marie Isaacson is the human resources director for Arizona. When she tells us it’s very costly to bring a new employee on, she knows whereof she speaks. “There’s the interview process, the training process, etc. So turnover is expensive. We’ve invested a lot in our employees. 

That’s just the beginning of the problems that states are increasingly facing as turnover rates among their employees seem to be creeping steadily upward. It’s not just older workers heading for retirement. States are beginning to lose their younger workers as well.

The overall upward movement in the turnover rate is one of the findings of the State Government Workforce Project (SGWP), an effort we’re involved in with Professor Sally Selden of Lynchburg College, under the auspices of the National Association of State Personnel Executives. Some of the numbers from that study are indicative of what’s happening all around the country. In Montana, the state employee turnover rate reached a low of just under 9 percent in 2009; it was up to 12.5 percent in 2012. In Georgia, turnover in fiscal 2013 was 17.9 percent; it had been 13.6 percent in fiscal 2009. And in Louisiana, voluntary turnover has been rising—from 12.8 percent in fiscal 2011 to 18.9 percent just two years later.

The turnover data may understate the problem. Poaching by departments isn’t usually reflected in statewide turnover statistics, but has the same impact as when employees leave state employment altogether. “I’ve got a lot of good young people coming in the door,” reports Sara Walker, director of the West Virginia Division of Personnel. “Just about the time they start to get really good, the other agencies steal them from me.”

Of course, turnover affects some departments far more than others. Between November 2011 and November 2012, it was 30 percent in Montana’s Office of the State Public Defender and only 8.5 percent in the Natural Resources and Conservation Department. Generally speaking, the areas of greatest turnover are in particularly tough, low-paid jobs in 24/7 facilities, such as behavioral health care and corrections.

Part of the turnover problem may be the improving economy. As the unemployment rate has been edging downward, the private sector has opportunities for people who might otherwise work for the states. The public sector is particularly vulnerable for a number of reasons, not least because many states can’t keep up with the private sector in terms of pay. “One of the things that we’re trying to grapple with now,” says Sam Wilkins, director of the South Carolina Office of Human Resources, “is how we deal with a compensation system that has been thwarted by the Great Recession.”

There’s also a rather alarming morale issue in the states. Declines in benefits like pension plans and health care have hurt, and so have pay freezes or furloughs. Purposeful reductions in workforce frequently mean that one person is doing the job of two. That’s not only wearing on employees, it also makes it harder for them to feel the heady rush of success. Four of five state HR representatives report that employee morale is worse than it was before the recession, according to preliminary SGWP data.

Of course, higher turnover has ramifications beyond the loss of the financial investment of hiring and training. Consider, for example, what happens when clients for social services wind up working with a succession of caseworkers over a five-year period. Each new state employee has to learn a household situation from scratch. What’s more, according to a September report from the Nebraska Foster Care Review Office, “Worker instability decreases the likelihood of complete documentation of parental progress or lack thereof, which is important information that forms the evidence used by courts, [the Department of Health and Human Services], and other stakeholders to determine case direction.”

So, what’s a state to do? Raising pay would be the obvious answer—but not a practical one in many cases. There are, however, other routes to cutting down on turnover, including: 

  • Understanding why people are leaving their jobs. Exit interviews can help, but they’re often designed badly (if they exist at all). In Georgia, Deputy Commissioner of the Human Resources Administration Candy Sarvis says, “We don’t know why our employees are leaving. About 50 percent of our terminations are simply designated as ‘resigned.’ Our goal is to do a deep dive into health care and corrections this year” to determine why employees are resigning.
  • Updating antiquated pay structures. In New Mexico, for example, many people are hired at the mid-range of the salary scale for their position (a necessity with starting salaries 39 percent below market). But once someone is on board, there is much less room for salary advancement. The state’s workforce report for the first quarter of fiscal 2014 says, “The outdated design and non-competitive pay and classification systems continue to impact the State’s ability to attract and retain qualified [employees].” This is a problem the current administration is trying to fix.
  • Work on understanding individual jobs and the obstacles presented to the people who hold them. The Texas Auditor’s Office came up with some good recommendations for the state’s Department of Family and Protective Services, including strengthening oversight of regional offices to help ensure that administrative processes don’t unnecessarily increase caseworkers’ workloads.
Turnover isn’t an easy problem to address. But ignoring the trend can be perilous. It’s like relaxing in a seaside house even as the weather reports show rising tides.

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