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Multiple Agencies

An Annual Report on Full-Time Classified State Employee Turnover for Fiscal Year 1998

December 1998

Report Number 99-702

Overall Conclusion

The statewide turnover rate for fiscal year 1998 was 17.37 percent for full-time classified state employees, a significant increase over last year's rate of 14.27 percent. The retirement incentive offered employees and some significant reductions in force at large agencies explain a portion of the increase. However, the State's rate is significantly higher than the average rate of state governments bordering Texas (13.23 percent), the average rate of local governments in which the State competes for employees (12.13 percent), and the national private sector rate (12.0 to 13.2 percent).

Employee turnover costs to the State are significant. We conservatively estimate the total cost of turnover in fiscal year 1998 to be between $127 and $253 million. The overall increase of 3.1 percent over fiscal year 1997's rate cost the State an additional $33 to $66 million.

Employee turnover appears to have generally increased in both the public and private sectors since 1996. A good nationwide economy and significant industry trends, as in the information technology field, have contributed to employees making career changes. The Greater Austin area market also continues to have a strong economy and competition for talent. Since the largest number of its employees work in the Austin area, the State increasingly must deal with the loss of experienced employees to the private sector. Research suggests that the best strategies to retain employees are strong health care benefits, new employee orientation, open communication with employees, and salary increases.

Key Facts and Findings

  • The number of agencies with turnover greater than 30 percent more than doubled since last fiscal year.

  • Generally, the lower the employees' salary, the more likely they are to leave their agency.

  • The types of jobs state employees leave most frequently are in the medical/health, employment and, social services, fields. There is also significant turnover among information technology professionals, although there has not been a dramatic rise in terminations over last year.

  • The most common reasons employees claim for leaving state employment are not job related. Only 8 percent claim they left because of inadequate salary; less than 1 percent because of the lack of opportunities for advancement. However, these reasons differ from those expressed in national surveys. This difference suggests that the State may have problems in the way it collects this information. This problem affects the analysis of data and, in turn, recommendations for appropriate solutions.

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