Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone
“My chief assets drive out the gate every day. My job is to make sure they come back.”
So says Jim Goodnight, CEO of SAS, a leading business analytics software and services company. SAS is a perennial member of FORTUNE magazine’s annual 100 “Best Companies to Work For” and is #1 this year.
Although this quote comes from a private sector leader, it’s certainly just as true (or maybe even more true) in government. After all, what else do we have to achieve our mission besides our talent–our chief assets?
But attrition in government is often low. As a result, government leaders are not usually too concerned about turnover. If few are leaving, why worry?
In fact, attrition can be a good thing–creating space for new talent and skills, removing poor performers (employees who have retired but just haven’t told anyone yet) and providing promotion opportunities for capable but less senior employees. And attrition can reduce payroll costs.
Yet, as Goodnight’s quote underscores, we have to pay attention to our talent. That includes understanding who’s leaving–and why. Given the current budget problems that are causing pain for government agencies across the nation, we can’t afford to overlook turnover.
In fact, if hiring is limited or frozen, we better pay close attention to who’s leaving. Losses of experienced employees or those with special skills, due to retirement or more promising opportunities, can deal a serious blow to capacity and performance. That’s especially true if the employees walking out the door take institutional knowledge and organizational savvy that up-and-coming staffers don’t yet have.
At the other end of the demographic spectrum, high attrition among new hires can also hurt, including signaling that the organization is not a good place to work. While attrition of recently-hired employees means wasting the considerable investment in bringing them on board–literally money down the drain–it also can indicate weaknesses in recruiting, hiring, onboarding and supervision.
In other words, attrition is an important barometer of workplace quality. High turnover among specific groups or organizational units can suggest employee dissatisfaction with leaders, managers and supervisors; the workplace environment; or organizational systems and processes.
Research has shown that the cost to replace a departed employee can run from 50 to 200 percent of the employee’s annual salary depending on role, seniority, specialization, performance level and training.
But the loss can involve more than money because it’s hard to place a dollar value on the loss of key talent. In government, attrition can potentially affect basic services such as law enforcement, public health, environmental protection, etc. Losses in these jobs can have impacts that far exceed financial costs.
For these reasons, and as sound management practice and good workforce planning, government leaders need to clearly understand employee attrition and how it impacts operational capacity, workplace health and the agency mission.
For these reasons, the nonpartisan, nonprofit Partnership for Public Service (my former organization), in cooperation with Booz Allen Hamilton, recently released a matched set of reports on the need to analyze and understand attrition, and how public sector organizations can make sure they retain the employees they want to keep. These reports–”Beneath the Surface: Understanding Attrition at Your Agency” and “Why It Matters; and Keeping Talent: Strategies for Retaining Valued Federal Employees”–are both available on www.ourpublicservice.org. The reports outline a methodology for analyzing attrition and improving retention.
While the Partnership focuses on the federal government, the messages in these reports should resonate with all levels of government.
Keeping the right talent starts with understanding who is leaving and why. This analysis should be the basis for strategies to retain talent, transfer knowledge and replace those who inevitably will leave, due to retirement and other reasons.
Overall, attrition in government is relatively low. Turnover in the federal government, for example, was less than six percent in 2009. Annual private sector turnover is much higher, ranging up to 30 percent or even higher. Of course, this is largely an apples-to-oranges comparison since private sector attrition includes high turnover industries like entertainment and leisure, retail and construction, where annual losses can approach 50 percent. But however you slice it, government turnover is usually relatively low.
That’s why it’s important to look below the surface. The Partnership, for example, identified three groups to particularly focus on when analyzing employee attrition–new hires, employees eligible for retirement and those in mission-critical occupations.
New hires. The federal government is losing many new hires–the talent it works so hard to recruit and bring on board. From 2006-08, almost one out of every four new hires left their jobs within two years, with some agencies losing more than one-third of their new workers in their first two years.
Even Presidential Management Fellows (PMFs), an elite group who compete and are carefully selected for their two-year development programs, leave at alarming rates. The Partnership found that 33 percent of PMFs hired in fiscal 2006 left their hiring agency by the end of fiscal 2008.
In other words, money down the drain.
Experienced talent. The long-predicted government retirement “tsunami” and the resulting brain drain have been delayed due to the economic downturn, but are still inevitable. For example, more than 28 percent of the two million federal workers were eligible to retire in fiscal 2009. As it turns out, less than nine percent actually retired that year, most likely due to the uncertainties caused by the economic crisis. However, the fact that the public sector workforce is older, on average, than the private sector means that the number of retirement eligibles will continue to increase, presenting a major challenge for many agencies.
Mission-critical jobs. Many agencies identify “mission-critical occupations” (MCOs). These positions can be unique to an agency, such as law enforcement officers. Other mission-critical jobs, such as health care professionals or financial managers, are in multiple agencies.
In the federal government, MCO attrition varies but can be high. For example, annual attrition for nurses in 2008 was 18 percent. Since employees in mission-critical occupations are often hard to hire and require an upfront investment to train, attrition of those with critical skills is a particular problem.
What Causes Attrition?
According to the Saratoga Institute, the top three reasons private sector employees leave are few opportunities to grow and develop, poor relationships with their direct managers, and dissatisfaction with compensation. Other reasons include feeling devalued and unrecognized, poor communication with managers, loss of trust of top leaders, and stress due to internal politics. There’s no reason to believe the factors in government are much different.
The work environment matters–a lot. Why do employees stay or leave? The reason one person leaves a job might be the reason another stays. Major motivating “stay” factors are pride in the work or the organization, good supervision, fair compensation, opportunities for growth, solid relationships with colleagues, and meaningful work.
These factors can be critical building blocks for workforce retention strategies. Agencies that offer work environments that provide challenging and meaningful work, and give employees the working conditions and environment they want, can become employers of choice.
One advantage government offers over many private sector employers is the compelling opportunity to make a difference in the lives of the citizens government serves.
If these conditions are not in place, employees can either “vote with their feet” or (maybe even worse) stay but become disengaged from the organization and workplace. Smart agency leaders understand that, even in difficult times, employees–especially the best performers–have choices. That’s why it’s so critical to understand who’s leaving and why.
Using exit interview data. One good way to understand what drives attrition is to collect exit data, through online surveys or in-person interviews. Exit data are important and provide valuable insights, but response rates are often low and employees can be reluctant to be candid because they’re uncomfortable sharing why they have decided to vote with their feet.
However, candid and complete exit data can be valuable. For example, one federal agency learned through exit data that the major reason employees left was “the nature of your work.” Specifically, departing employees cited production goals as a reason why they quit. The repetitive nature of the work also was frequently mentioned. Only about one-third of survey respondents felt they were doing the kind of work they expected to do when they were hired.
Employee feedback data can supplement exit data. Another valuable but underutilized data source is employee feedback surveys such as the annual Federal Employee Viewpoint Survey. This survey includes a question that asks employees whether they are considering leaving in the next year and why (i.e., to retire, change jobs or for other reasons).
The responses of those who say they are planning to leave provide unique insights. For example, those who said they are considering leaving within the next year are:
These patterns suggest that agencies should consider how to develop ways to improve performance recognition and make sure that awards programs are meaningful and effective, examine how supervisors assign tasks, clarify the line of sight between individual jobs and agency mission, and figure out how to strengthen training and development programs.
These sources–employee feedback data and exit data–can provide actionable information about why people leave. As one official said, “Attrition data doesn’t say everything; it needs to be coupled with more in-depth information from other sources. People leave for a variety of reasons, sometimes not controllable, but we want to know what kind of issues are factors so we can help prevent attrition.”
When agencies understand who is leaving and why, they can identify groups of employees that are “attrition risks.” Sometimes this means putting numbers and reasons around what everyone thinks they already know (e.g., all the engineers are being hired away by private industry). Or it can involve discovering what is really going on (e.g., the engineers who are leaving are the newest hires and are dissatisfied because they manage contractors instead of directly using their own engineering skills).
In-depth analysis of attrition can help leaders understand what is occurring, prepare for anticipated attrition and solve problems that are causing unwanted turnover.
The Partnership developed a three-step protocol to help agencies analyze turnover:
Find out who is leaving. Using data from HR information and payroll systems or other sources, profile and analyze the characteristics of departing employees. Attrition analysis should focus on:
This analysis may reveal that there are groups of employees with already high attrition or who may be at risk of leaving. These are the groups that warrant further assessment and attention.
Understand why they are leaving. This information, which can help agencies understand attitudes and behaviors of departing employees, should come from employee surveys or exit data from interviews or survey results.
Data from exit interviews or surveys can help answer the “why they are leaving” question. Taken together, employee survey feedback and exit data enable agencies to better determine why certain groups of employees are leaving–or may leave.
Assess external factors and then take action. Although external factors can vary from jurisdiction to jurisdiction and agency to agency, agencies should consider:
Agency leaders should incorporate these external factors into the broader attrition analysis and use the results to develop action plans to reduce unwanted attrition. These action plans should focus on solving problems that prompt new hires, employees in mission-critical jobs, high performers, senior leaders and other talented employees to leave.
Attrition is a fact of life for all organizations. “Good” attrition can create promotion opportunities for talented employees, help agencies add new skills and competencies, and weed out poor performers. On the other hand, losing experienced employees can hurt an agency’s capacity and performance.
The bottom line, however, is that if agencies don’t collect data on, study and understand attrition, they can’t proactively fend off unwanted or unpredicted loss of talent.
In a future column, I’ll discuss in more detail the Partnership’s take on how to use attrition analysis data to develop specific retention strategies.
ASPA member Bob Lavigna is assistant vice chancellor-HR at the University of Wisconsin-Madison. He was formerly vice president of research for the nonprofit, nonpartisan Partnership for Public Service. Email: [email protected]