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An Annual Report on Classified Employee Turnover for Fiscal Year 2009

December 2009

Report Number 10-702

Overall Conclusion

The fiscal year 2009 statewide turnover rate of 14.4 percent for full- and part-time classified employees decreased from the fiscal year 2008 rate of 17.3 percent, and it is the lowest turnover rate that the State has experienced in the last five fiscal years.

Excluding involuntary separations and retirements, the fiscal year 2009 statewide turnover rate was 8.1 percent. This rate, which is often considered more of a true turnover rate because it reflects preventable turnover, also decreased since fiscal year 2008.

Several factors may have had an influence on the State's decreasing turnover rate. Specifically:

- Employee salaries increased. The average regular, full-time classified employee salary increased from $32,848 in fiscal year 2005 to $38,461 in fiscal year 2009.

- Agencies implemented programs to improve retention efforts.

- Texas unemployment rates increased. The statewide unemployment rate increased from 4.6 percent in fiscal year 2008 to 6.5 percent in fiscal year 2009.

Employee turnover can be both negative and positive. Negatives include the associated costs of turnover, such as training and orientation of new employees, recruitment and selection of new employees, leave payout to departing employees, and lower productivity in the workplace during the time that a position is vacant and during the time that a new employee is learning the job.

However, some turnover will always occur and is normal for any organization. Turnover can create positive outcomes for employers because they can replace low-performing employees with high-performing employees.

In addition, there is often a financial benefit gained as a result of the difference in the salary paid to an experienced employee who separates from an agency versus the salary paid to a new employee who takes the departing employee's position. However, when organizations start losing their high-performing, highly skilled, and experienced employees, turnover may begin to negatively affect the organizations' business operations.

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