State Government Workforce Churn Reaches Historic Heights

Focus #12 • June 2023


Recently published state data paint an alarming picture of the state government workforce, as turnover and vacancy rates among state jobs in Wisconsin reached all-time highs last year. These developments are perhaps most concerning in state agencies charged with running large institutions such as the Departments of Veterans Affairs and Corrections, where high turnover rates are coupled with populations in veterans’ homes and prisons who require heightened levels of attention at all hours of the day.

Rising rates of worker turnover and vacancies within state government have placed particular strain on state prisons, veterans’ homes, and treatment facilities that require an around the clock workforce to operate.

Despite notable pay increases for workers in some of these facilities last year, our latest review of state data finds some of the greatest workforce challenges among the Departments of Veterans Affairs (DVA), Corrections (DOC), and Health Services (DHS), three agencies that run large state institutions. These labor issues matter because they can complicate the agencies’ mission of ensuring safety for residents and staff while at the same time controlling overtime and other costs. Given record low unemployment, these staffing challenges are not an isolated problem, as private sector employers have also faced difficulties. In the short term, however, state agencies may have less flexibility to rapidly adjust pay and benefits to respond to changing labor market conditions.

Overall, our analysis finds that turnover and vacancy rates for state workers outside of the University of Wisconsin System rose to record levels in the last fiscal year (ending on June 30, 2022; see Figure 1). In the 2022 fiscal year, 16.4% of the nearly 28,000 non-UW state employees in Wisconsin left their jobs, including 10.2% who left for voluntary reasons other than retirement. In addition, 5,770 full-time equivalent (FTE) positions, or 17.7% of the total authorized positions in state government outside of the UW System, were vacant in June of last year.

Both workforce turnover and vacancies reached their highest levels in a decade in a number of key state agencies. Among the 20 largest state departments, the June 2022 vacancy rate of 17.8% far outpaced that of both June 2020 (12.0%) and June 2018 (11.9%). The trend reflects both current factors such as record inflation, a hot labor market, and retiring baby boomers, as well as a long-term increase in state turnover that may call for more reflection by policymakers.

This report uses the State of Wisconsin Classified Workforce and Affirmative Action Report, which is published every two years by the Division of Personnel Management and details trends around turnover, vacancy, pay, and key demographics for the permanent, classified workforce. This includes all state employees except for those in the judicial or legislative branches, the UW System, and three state authorities as well as elected officials, appointees, assistant DA and public defender attorneys, limited-term and project workers.

Last year, we looked at public sector turnover in Wisconsin using a data source that lumped together both state and local employees. However, those data did not allow us to drill down to individual professions or agencies. Unfortunately, the dataset used for this report does not include local governments, but it does provide more detail on various state agencies and job types.

more Turnover and Vacancies, less Experience

The personnel report’s definition of turnover includes retirements, as well as involuntary (death, disability, firing, etc.) and voluntary separations in which workers leave their job, for example, to take a new job or to care for a child or family member. In 2022, 15 of the 20 largest departments reported turnover rates above 10% and turnover rose in all but two agencies.

DVA had the highest rate, with more than one out of every four employees (27.8%) turning over last year. Rates rose to 19.3% within DOC and 19.0% at DHS. The three agencies respectively operate nursing homes for veterans, prisons, and secure psychiatric institutions and centers for people with intellectual disabilities and behavioral health needs. High turnover and vacancies in these facilities can require employees to work more overtime, potentially increasing costs for the state as well as creating further turnover in some cases.

While the rate of retirement was higher in 2022 than in nearly every year prior, the spike in turnover appears to have been driven mainly by voluntary separations for other reasons. Fifteen of the 20 largest departments saw their highest rate of voluntary separation in the last decade in 2022, and more than one in 10 employees of some of the state’s largest departments left their job voluntarily in 2022, including 18.4% of DVA employees, 12.6% of DHS employees, 12.0% of DOC employees, and 11.5% of Department of Workforce Development (DWD) employees.

When these agencies cannot quickly replace departing staff, vacancies arise. Fifteen of the 20 largest departments saw vacancy rates increase from 2020 to 2022 (see Figure 2), including seven of the eight departments with at least 1,000 authorized FTE positions. For 2022, this includes:

  • DVA, which had 570 vacant FTE positions and a vacancy rate of 46.1%, by far the largest for any agency since at least 2004.
  • DOC, which had just under 2,400 vacancies and a 23.4% vacancy rate. That was nearly double the 1,290 vacant positions and 12.7% vacancy rate from just two years prio
  • DHS, which had more than 1,000 vacant positions (an increase of nearly 250 since 2020).

High turnover rates for agencies also reduce the experience levels of their workforce. Since 2014 – the first year the personnel report is available – 19 of the 20 largest departments have seen a decrease in their workers’ average tenure. Moreover, half of those agencies’ workers averaged at least three fewer years of experience in 2022 relative to eight years prior. Notable examples are the Public Service Commission, where the average experience of permanent classified employees fell from 18.1 years in 2014 to just 9.5 in 2022; and the Department of Safety and Professional Services, where the average employee went from having 13.5 years of experience to just 7.5 (see Figure 3).

Similarly, the average employee is now younger at all but one of the 20 largest departments. For example, the average Public Service Commission employee was 50.5 years old in 2014 but just 41.8 years old in 2022. In terms of both average age and average years of state service, only DVA has seen increases since 2014.

What is Causing the exodus?

Understanding why state employees are leaving their jobs is critical when considering policy responses. While the personnel report data do not spell out those reasons, it provides clues by breaking down turnover rates by types of jobs across all departments.

Among the 40 different job groups included in the report, workers in 13 left voluntarily at rates above 10% in 2022. Three of those groups left at rates above 20%, including 35.1% of personal care aides – the highest rate among job types – and 24.1% of production laborers. In fact, a number of other “blue collar” jobs saw very high rates of turnover in 2022, including 18.3% of those in food production, 14.0% of individuals in public safety, and 11.1% of power plant workers. Only three of the 40 job types had a lower level of voluntary separation in 2022 than in 2020.

Some of the turnover reflects factors that are battering both public and private sector employers, including the low unemployment rate and retirement of the baby boomers. A national U.S. Bureau of Labor Statistics survey of job openings and labor turnover actually shows lower turnover rates for state and local governments than for private employers.

Pay is another factor that could be causing the loss of state workers such as personal care aides. The reports track average pay rates broken down by eight Equal Employment Opportunity job categories. Since 2014, only two of those categories have seen average wage increases that matched the rate of inflation: protective services and service and maintenance jobs.

Pay has lagged even further over the past two years. From June 2020 to June 2022, the rate of inflation reached 14.9% but none of the eight job categories had an increase in pay of more than 11.9%. The pay increases for half of the job categories were less than half the rate of inflation.

Other factors that could be contributing to the loss of state workers include the turnover itself. Particularly in 24/7 institutions such as prisons, vacancies can force employers to require the remaining employees to work more overtime, which in turn could lead to burnout. Since 2010, Wisconsin and a number of other states also have sought to control labor costs through a range of methods beyond just salaries including changes to traditionally generous benefits packages and labor rules. Those policies and their cumulative effect over time may also have affected workers’ perceptions of state employment.

Policy Implications

Rarely do labor data paint so clear a picture: employees in Wisconsin’s state agencies are departing at record rates and leaving a rising number of vacancies in their wake. Private-sector turnover has fallen somewhat since the summer of 2022 and it is possible the same has happened within state government, but absent an economic downturn it is likely to remain an issue.

In some cases, this turnover may come with minimal effects and may even offer an opportunity to consolidate or eliminate certain positions and change the way government operates. In other cases, however, such as for positions at state health care and corrections institutions, the effects may be far more serious and may call for varied responses tailored to different types of critical workers such as nurses, accountants, and corrections officers. For example, lawmakers recently advanced increases in pay for state assistant district attorneys and public defenders in response to concerns about turnover in those jobs that had been raised by the Wisconsin Policy Forum and many others.

Increasing pay for some other state workers such as prison employees would cost far more given their much greater numbers. It also should be recognized that pay is not the only factor impacting retention and recruitment; for example, over the last three years, starting pay for corrections officers has risen by 37%, far outpacing even the already steep rate of inflation, and a more robust pay progression system for state security positions has also been implemented. Given the increase, a deeper look by policymakers into other factors such as working conditions may also be warranted. A failure to address high turnover rates could also lead to greater use of overtime and other added costs as well as a lower level of state services over time.

Given the potential impacts, lawmakers may wish to weigh these issues in the coming weeks as they finish their work on the state budget and send it to Gov. Tony Evers.