A Model of Voluntary Turnover

in State Government
SALLY COLEMAN SELDEN
AND DONALD P. MOYNIHAN
SYRACUSE UNIVERSITY

While many researchers have examined turnover in private sector firms, only a few studies have focused on quit rates
in the public sector organization This article develops and tests a conceptual model of voluntary turnover in state
government. The most significant finding is that state employees are less likely to quit in states with on-site childcare
State governments that allow greater internal opportunity for movement are also more successful at retaining employ-
ees. In addition, state employees who are represented by unions and are better paid are less likely to
.
quit

the fall of 1997, the turnover rate in the in the public sector, although the under-
In
U.S. rose to its highest level in over a de-
over

standing of voluntary turnover at the federal

cade (Kepner-Tregoe Business Issues Research
Group, 1999), with the average turnover rate
in &dquo;established&dquo; U.S companies running about
6 percent (Kepner-Tregoe Business Issues Re-
search Group, 1999, p. 2) and in state govern-
ment about 8 percent (Government Perfor-
mance Project, 1998). Huge numbers ofwork-
ers are moving between jobs in the public, not-
for-profit, and private sectors on a regular ba-
sis (Burgess, 1998). State governments increas-
ingly find themselves in competition for highly
talented workers (Ingraham, Selden &
Moynihan, 2000). Because of growing turn-
over and competition for skilled labor wit-
nessed this decade, state government officials
level of government is undergirded by a few
exceptional studies (Kellough & Osuna, 1995;
Lewis, 1991; Lewis & Park, 1989; National
Commission on the Public Service, 1990; U.S.
General Accounting Office; 1990; U.S. Merit
Protections Board, 1989). Federal analyses
have examined the individual characteristics
of those who leave (Lewis, 1991; Lewis & Park,
1989) and the organizational characteristics of
agencies losing employees (Kellough & Osuna,
1995).
Drawing on both the existing literatures
in the private and public sectors, this study
proposes and tests a model of voluntary turn-
over in state government.’ Of particular im-

needs to better understand the factors associ-
ated with turnover and what can be done to
lead people to stay.
Scholars have devoted substantial atten-
tion to turnover in the private sector. Several
scholars have undertaken meta-analyses of
employee turnover (Cohen, 1993; Cotton &
Tuttle, 1986; Hom, Caranikas-Walker, Prussia
& Griffeth, 1992; Tett & Meyer, 1993). In
contrast, a paucity of research exists on turn-
portance is the examination of the impact of
state human resource management practices on
state quit rates. First, the article clarifies the
concept of turnover and examines the broad
themes that emerge from the literature. Sec-
ond, we draw from the existing research and
develop a model predicting voluntary turnover
in state government. Third, we test the model
using data collected from the 1998 Govern-
ment Performance Project (GPP), the National

63
Association of State Personnel Executives
(NASPE), the Book of States, the Bureau of
Labor Statistics, and the Census Bureau. Then
we discuss the findings and implications of this
research.
TURNOVER IN THE PUBLIC SECTOR
Defining Voluntary Turnover
Most studies of turnover rest on the notion
that lower turnover is indicative of a strong
and more effective organization (Price, 1977,
pp. 92-119).~ Turnover is associated with high
organizational costs that are created when an
employee departs-including the cost of re-
cruiting and training a new employee, as well
as the impact on production as the new em-
ployee climbs the learning curve (Cascio, 1982;
Kellough & Osuna, 1995). For example, re-
search by the Saratoga Institute (Kepner-Tregoe
Business Issues Research Group, 1999, p.3)
suggests that the replacement cost of an em-
ployee is between one and two times the
individual’s salary. Kepner-Tregoe Business
Issues Research Group (1999, p.3) estimates
that it costs approximately $134,000 to replace
a human resource manager in the automotive
industry.
Most research has been careful to dis-
tinguish voluntary turnover from involuntary
and total turnover (see for example, Shaw,
Delery, Jenkins & Gupta, 1998). Total turn-
over
typically includes voluntary turnover
(when employees quit); involuntary turnover
(when employees are fired or laid off); and re-
tirements (when employees leave after meet-
ing specific service requirements for retire-
ment). Shaw et al. (1998, p. 512) contend
that voluntary turnover and involuntary turn-
over are fundamentally distinct phenomena
and are explained by different factors. With
voluntary turnover, the employee rather than
64
the employer terminates the employment con-
tract. The employee exerts the decision to leave
the organization, a decision that presumably
the organization would wish to prevent in most
instances. To reduce the loss of talented em-
ployees, an employer must understand the rea-
sons associated with voluntary turnover. This
allows an employer to make an informed choice
about what resources, strategies, and actions
could be used to prevent undesired separations
from occurring.
Different Strategies to Study Voluntary
Turnover in Government
A review of the literature reveals that scholars
have taken several approaches to study volun-
tary turnover in the public sector. One strat-
egy is to look at total government employment
and to compare voluntary turnover between
the public and private sectors (Utgoff, 1983).
A second approach is to examine voluntary
turnover within the federal government over a
specified period of time. In this genre of re-
search, some studies focused on why individu-
als voluntarily leave the federal government,
examining age, experience, education, salary,
grade, and gender (Lewis, 1991; Lewis & Park,
1989), while another study considered deter-
minants of quit rates across federal agencies
(Kellough & Osuna, 1995). Only a few stud-
ies have looked at state government (Kim,
1999; Smith, 1969). Smith, for example, ex-
amined 1969 quits within a single civil service
system to determine if the opportunity struc-
ture of jobs was related to quit rates.
These studies have shown that volun-
tary turnover is a function of environmental,
organizational, and individual factors
(Kellough & Osuna, 1995 ; Lewis,1991; Lewis
& Park, 1989; Smith 1969; Utgoff, 1983).
Environmental variables refer to factors exter-
nal to the organization, such as level of unem-
ployment and geographical region. Organiza-
tional variables refer to structural characteris-
tics of the organization (e.g., size, unioniza-
tion, and occupational characteristics). Indi-
vidual variables are the personal characteris-
tics of the individual employee that are hypoth-
esized as making a person more or less likely
to leave (e.g., gender, age or experience). This
research builds on these studies by examining
the impact of environmental factors (unem-
ployment and region) and organizational fac-
tors (size and unionization) on voluntary sepa-
ration in state government.3 Unlike previous
public sector research on turnover, this study
also examines the relationship between selected
human resource management policies and
practices (family-friendly policies, pay, and
training) and quit rates. Mobley (1977) sug-
gests that human resource management prac-
tices matter because they influence an
employee’s assessment of his or her current situ-
ation, which may influence a person’s choice
to seek other employment opportunities. In
addition, an organization’s human resource
management practices may also be an impor-
FIGURE 1 - MODEL OF VOLUNTARY TURNOVER
OF STATE GOVERNMENT EMPLOYEES
tant factor when an individual compares his
or her current employer with prospective em-
ployers (Huselid, 1995; Shaw, Delery, Jenkins
& Gupta, 1998). Figure 1 shows the frame-
work for this study.
DETERMINANTS OF TURNOVER
AT THESTATE LEVEL
State Unemployment
Environmental variables that impact voluntary
turnover decisions are primarily economic, and
relate to the level of unemployment and the
subsequent demand and reward for labor.
When unemployment increases, voluntary
turnover is expected to decline as workers will
be reluctant to leave a job in a weak labor mar-
ket (March & Simon, 1958). March and
Simon (1958, p. 100) wrote, &dquo;under nearly all
conditions the most accurate single predictor
&dquo;
of labor turnover is the state of the economy.&dquo;
Many studies have confirmed this relationship
(Cotton & Tuttle, 1986; Park, Ofori-Dankwa
& Bishop, 1994; Price, 1977; Zax, 1988).
Thus, this study proposes the following:
65
Hypothesis 1. States with higher rates of un-
employment will have less voluntary turnover.
Unionization
The percent of the workforce that is union-
ized is often purported to be an important pre-
dictor of turnover (Cotton & Tuttle, 1986;
Edwards, 1995; Groothuis, 1994; Huselid,
1995; Kellough & Osuna, 1995; Park, Ofori-
Dankwa & Bishop, 1994). If unions are suc-
cessful in expressing worker preferences and
enhancing the workplace environment through
better working conditions and wages, workers
may be less likely to seek alternative employ-
ment. In addition, because the presence of
unions is often associated with an employment
system that supports seniority, employees have
additional incentives to remain in their present
job (Mitchell, 1989). While several studies
support this relationship (Blau & Kahn, 1981;
Cotton & Tuttle, 1986; Huselid, 1995), a re-
cent study of federal agencies by Kellough and
Osuna (1995) suggests the contrary. Federal
agencies with higher percentages of employees
who were more unionized had higher quit rates
(Kellough & Osuna, 1995). However, as
Kellough and Osuna (1995, pp. 63-64) ob-
serve, &dquo;federal government employee unions are
notoriously weak and are forced to operate
within the context of an extremely limited
scope of bargaining.&dquo; The strength of unions
in the bargaining process differs across states.
Unions have considerable bargaining power in
some states, such as New York and Wisconsin,
and are almost irrelevant in other states, such
as Alabama and Georgia. Thus, we posit that
Hypothesis 2. States with more employees cov-
ered by collective bargaining agreements will
have less voluntary turnover.
Size and Internal Opportunity Structure
Another important variable typically included
66
in the turnover research is organizational size
(Kellough & Osuna, 1995; March & Simon,
1958; Morissette, Picot & Pyper, 1992; Smith,
1979; Utgoff, 1983). Utgoff (1983) suggests
that larger firms will have lower turnover be-
cause of employees’ enhanced opportunities for
internal advancement. Kellough and Osuna
(1995) find that larger federal agencies have
lower quit rates. However, Huselid’s (1995)
research shows the opposite; he found that
in
turnover was higher larger corporations.
Though dated, Price’s (1977) review of turn-
over studies demonstrates inconsistent results
between size and turnover. Park, et al. (1994)
suggest that the relationship between organi-
zational size and turnover is rather complex.
They posit that size is very often a proxy for
employee advancement opportunities where it
has a demonstrated effect.
Because previous research suggests that
size is a proxy for opportunity for advancement
or transfer (Kirschenbaum & Mano-Negrin,
1999; Morissette, Picot & Pyper, 1992; Park,
Ofori-Dankwa & Bishop, 1994; Smith,1979),
an alternative measure is the number of classi-
fication or job titles existing within an organi-
zation. Morissette, et al. (1992) point out that
an organization with more classification titles
provides greater internal movement opportu-
nities, which reduces turnover by increasing
the &dquo;protected&dquo; area for advancement or inter-
nal job alternatives. With respect to state gov-
ernment, the number of classification or job
titles is positively and significantly correlated
with two commonly used measures of size-
state employment and state population.4 How-
ever, unlike alternative measures of size, such
as number of workers, it has the advantage of
providing a more accurate portrayal of inter-
nal opportunities for employee advancement
and transfer..
Hypothesis3. The greater the number of classi-
fication titles in a state, the lower the level of
voluntary turnover.
Pay
Scholars purport that pay is an important de-
terminant of turnover (Blau & Kahn, 1981;
Kim, 1999; Leonard; 1987; Lewis, 1991; Park
Ofori-Dankwa & Bishop, 1994; Powell,
,
Mathews, 1999). Ezra and Deckman (1996)
found that balancing work and family was an
important determinant of job satisfaction,
which is often associated with turnover. Durst’s
(1999, p. 29) research showed that approxi-
mately 52 percent of local, state, and federal
agencies surveyed agreed or strongly agreed that
family friendly programs decreased turnover.
States that employ more family-friendly poli-

cies are expected to be more successful at re-

Montgomery & Cosgrove, 1994; Shaw, Delery,
Jenkins & Gupta, 1998; Utgoff, 1983). A taining staff
number of studies confirm the importance of Hypothesis 5. States with more family friendly
pay in reducing quit rates (Blau & Kahn, policies will have lower voluntary turnover.
1981; Park, Ofori-Dankwa & Bishop, 1994;
Shaw, Delery, Jenkins & Gupta, 1998). Re- Training
cent research on federal employment is not as Finally, like Huselid (1995) and Shaw et al.,
clear, however (Lewis, 1991; Lewis & Park, (1998), this model includes training opportu-
1989). Despite the relative decline in federal nities.5 More training opportunities are likely
wages compared to private sector wages, Lewis to enhance an employee’s professional devel-
( 1991 ) found that voluntary turnover has been opment, making the individual more likely to
relatively stable. Nevertheless, we contend that stay (Huselid, 1995; Shaw, Delery, Jenkins &
state governments with higher pay rates are Gupta, 1998). Shaw et al. (1998) found that
likely to be more successful in retaining em- training was a significant predictor of invol-
ployees, controlling for the state’s median wage. untary turnover, but not of voluntary turnover.
firms offering more
Hypothesis 4. States with higher average sala- Contraryhad expectations,
to

ries will have less voluntary turnover. training significantly higher discharge rates
(Shaw, Delery, Jenkins & Gupta, 1998). Al-
though the coefficient for training was nega-
Family-Friendly Policies tive when predicting quit rates, it was not sta-
This study also considers how family-friendly tistically
significant (Shaw, Delery, Jenkins &
policies such as flextime (Muchinsky & Mor- Gupta, 1998).
row, 1980), on-site childcare, and job sharing
6. States that offer more compre-
influence quit rates. Providing a set of policies Hypothesis
hensive training will have lower quit rates.
that enhances worker flexibility and makes em-
ployment more feasible for workers with fami- Scholars generally agree that the vari-
lies is likely to increase retention of workers ables identified above affect voluntary turnover.
(Durst, 1999; Ezra & Deckman, 1996; They also report that performance and quit
Newman & Mathews, 1999). The use of poli- rates will have a u-shaped relationship, with
cies such as on-site childcare, flextime, and job high performers more likely to leave for better
sharing assist employees, particularly women, employment opportunities, average perform-
face the dual demands of work and family life ers more likely to stay in the organization, and
(Ezra & Deckman, 1996; Newman & poor performers more likely to leave due to

67
actual or perceived threat of firing (Jackofsky,
1984; Park, Ofori-Dankwa & Bishop, 1994;
Williams & Livingstone, 1994). Because our
research focuses on state governments as em-
ployers, we cannot distinguish whether indi-
viduals who left state government were high
or low performers.
DATA AND METHODS
The model and the several hypotheses are
tested using data from the following sources:
the 1998 Government Performance Project,
the National Association of State Personnel
Executives (NASPE, 1999), the Book of States,
TABLE 1. 1997 VOLUNTARY TURNOVER RATE FOR STATE GOVERNMENT
68
the Bureau of Labor Statistics, and the
Bureauof the Census. We had missing infor-
mation for six states, therefore, the analysis is
limited to 44 states.6 Three states, Idaho,
North Dakota, and Georgia, provided 1996
voluntary turnover statistics rather than 1997
data. We contacted officials in each of these
states and learned that voluntary turnover is
relatively consistent across years. As result, we
included these three states in our final analy-
sis. Table 1 provides voluntary turnover rates
for state governments in 1997.
We test the model with ordinary least
squares (OLS) regression, estimating the effects
of each independent variable on voluntary sion equation predicting voluntary turnover in
turnover while holding all other independent state governments. The independent variables

variables constant.7 Table 2 describes how the together explain 54.6 percent of variation in
dependent and independent variables are state quit rates. The equation achieves statis-

operationalized, and reports means and stan- tical significance at the .001 level. The find-
dard deviations for each. We include regional ings of the analysis are largely as expected, al-
controls in our model. We also control for though with an intriguing exception. We find
variation in state income by including the state a positive and statistically significant relation-

median income level for 1997. Due to the ship between unemployment and voluntary
fact that virtually all states employ flextime and turnover. The analysis suggests that states with

job sharing, thereby creating very little varia- higher unemployment rates have higher quit
tion (see Table 2), these variables are dropped rates. This relationship proved robust in the

from the proposed index of family-friendly analysis despite a number of efforts to test its
policies. The remaining family-friendly reliability.8 This finding defies previous stud-
policy-on-site childcare-is retained as a ies on turnover and the apparently
single variable. commonsense assertion that employees are

more cautious to quit their jobs in times of

FINDINGS AND DISCUSSION high unemployment (Cotton & Tuttle, 1986;

Table 3 reports the results of the OLS regres- Park, Ofori-Dankwa & Bishop, 1994; Price,

TABLE 2. MEANS AND STANDARD DEVIATIONS OF DEPENDENT AND INDEPENDENT VARIABLES

69
1977; Zax, 1998).
One possible explanation of this find-
ing is the cross-sectional nature of our data.
As we noted the common sense assertion is that
people are reluctant to quit jobs when there is
high unemployment. For the period identi-
fied, however, unemployment varied (with a
maximum of 7.9% in Alaska, followed by
6.4% in New York and a minimum of 2.5%
in North Dakota) but overall this was a time
of lowered unemployment throughout the
United States, with national unemployment
rate of 4.9%. Given the low national unem-
ployment, it may not be plausible to expect
people to be cautious about leaving their job
since they may perceive that alternative em-
ployment is easily securable.
Another possible explanation is that the
negative relationship between unemployment
and turnover found in the literature does not
TABLE 3. PREDICTING 1997 VOLUNTARY TURNOVER IN STATE GOVERNMENT
Re=.546 ; Adjusted l~=.408; Fvalue =3.965&dquo;&dquo;
*Significant at.10; &dquo;Significant at .05, &dquo;&dquo;Sigmficant at .001; ’Significant at the .004 level but not in the predicted direction.
70
hold for the public sector. All of the previous
studies confirming this relationship looked at
private sector firms. Moreover, none of the
research on turnover in the public sector has
tested this relationship (Kellough & Osuna,
1995; Lewis, 1991; Lewis & Park, 1989).
Public employment systems are associated with
relatively rigid pay systems and high union
presence, offering stable employment and com-
pensation with little reference to the supply
and demand of labor (Ingraham, Selden &
Moynihan, 2000).
We find support for our hypothesis that
the presence of unions, represented by the per-
centage of employees covered by collective bar-
gaining agreements, improves the retention of
employees. Partly this is because unions allow
employees to gain higher wages-unionization
is positively correlated with average pay-but
increased unionization matters above and be-
yond average salary. Our findings differ from
Kellough and Osuna (1995) research that
showed a significant and positive relationship
between unionization and quit rates in federal
agencies, but they are consistent with studies
of private firms (see e.g. Blau & Kahn, 1981;
Edwards, 1995). However, federal unions are
often weaker than many unions representing
state employees. As mentioned earlier, the role
of unions varies across states. For example,
right-to-work states do not provide for collec-
tive bargaining and may find it easier to nego-
tiate certain workplace policies than highly
unionized state governments. However, in
states with a high union presence, the analysis
suggests employees are more likely to have a
stronger voice and may garner higher wages
and other benefits because they are formally
involved in determining these policies.’
Classification titles are negatively related
to turnover, as predicted. Like previous stud-
ies using size as a proxy of opportunity, we find
that states with more advancement and trans-
fer possibilities have fewer quits (see Kellough
& Osuna, 1995). We also found support for
two of the three hypotheses relating to HRM
practices. States that pay higher average wages
experience fewer quits. The coefficient on this
variable is negative and significant at the .05
level. This finding is consistent with previous
research on turnover patterns in the private sec-
tor (Blau & Kahn, 1981; Park, Ofori-Dankwa
& Bishop, 1994; Shaw, Delery, Jenkins &
Gupta, 1998) and in the state of California
(Kim, 1999). State government employees are
less likely to quit their jobs when they are well
paid, regardless of how their pay compares in
wages and salaries offered by other employers
in the state. This result suggests that prob-
lems of voluntary turnover will be more diffi-
cult in states that do pay well.
not
Although training is positively related
to quit rates, it is not statistically
significant.
The most plausible explanation is that a clear
unidirectional relationship does not exist. On
one hand, states with few
training opportuni-
ties may be unable to sustain employee satis-
faction with regard to professional develop-
ment, leading to an increased rate of quits.
Alternatively, states that spend a great deal of
time enhancing the skills of their employees
may see that investment lost as many of these
employees sell these more marketable skills else-
where.
The final variable to show a significant
relationship to voluntary turnover is on-site
childcare. The coefficient is negative, as ex-
pected, statistically significant at the .05 level.
The presence of on-site childcare is associated
with a 2.84 percentage point decrease in vol-
untary turnover. States with on-site childcare
are better able to retain employees. This find-
ing is consistent with Durst’s (1999) work.
Further research in this area would benefit from
analyzing the nature of the relationship be-
tween childcare options and the rate of turn-
over by gender, and indeed, recruitment levels
by gender (Ezra & Deckman, 1996).
CONCLUSION
This study extends our understanding of envi-
ronmental, organizational, and human re-
source management factors associated with
voluntary turnover in state government. The
variable unemployment rate is particularly
important. However, understanding the un-
expected relationship between unemployment
and voluntary turnover in state government
demands more research. A careful study of
voluntary quits and the demand and supply of
labor in the public sector has not been under-
taken. The counterintuitive nature of these
results suggests that, as yet, the field has a weak
understanding of how public employment sys-
71
tems reflect taken-for-granted assumptions
about how the labor market works.
These state government results provide
practical direction for state governments with
respect to opportunity structure. In recent
years, many states have focused on reducing
the number of classification and job titles in
an effort to produce a simpler, streamlined
employment structure. A related trend has
been broadbanding of titles-collapsing a
number of titles into larger bands that offer
managers discretion in allocating pay. Since
this research suggests that classification titles
may have a salutary effect from the employee’s
perspective, states should contemplate carefully
the potential effect of reducing titles on em-
ployees’ perceptions of advancement opportu-
nity.
Further, as state governments struggle
with turnover, pay will remain an essential tool
for retaining talent. Interviews with state offi-
cials suggest that turnover problems are often
concentrated in particular employee areas, such
as Information Technology (Barrett & Greene,
1999). If states determine that turnover prob-
lems are localized to particular areas, they may
target pay increases or bonuses specifically to
this group of employees. Some states, such as
Virginia, are considering such policies.
Perhaps the most important finding of
this study, in terms of contribution to research
and practice, is the impact of the on-site
childcare variable. This research indicates that
providing on-site childcare has a substantial
impact on the percentage of persons leaving
Previous
state employment voluntarily. turn-
over research has done little to examine the
impact of family-friendly policies, and on-site
childcare represents a new factor to be included
in the future study of voluntary turnover in
both private and public organizations. While
many other studies have considered &dquo;high-per-
72
formance&dquo; human resource management prac-
tices such as performance-related-pay (see for
example, Huselid, 1994) this research suggests
that providing for basic needs of employees to
juggle the demands of family and career has a
large and positive influence on retention. In
terms of practice, the impact in providing on-
site childcare on turnover provides a clear
policy suggestion to employers. For public
sector organizations that are experiencing prob-
lems in retaining employees, offering on-site
childcare may provide a manageable and ef-
fective solution.
While this study adds to our under-
standing of voluntary turnover in the public
sector, additional research is needed to explore
other forces influencing state government quits.
At a minimum, more research is needed to
understand the way in which public employ-
ment systems interact with the labor market.
Future studies should explore the dynamics and
patterns of voluntary turnover in government
over time and from the perspective of the in-
dividual employee. The possibility of realiz-
ing the impact of human resource practices-
factors that can be influenced by public man-
agers-provides considerable incentive for such
efforts.
AUTHOR’S NOTE
*We would like to thank J Edward Kellough and the re-
mewers for their comments and suggestions
NOTES
not present an exhaustive review of re-
’This article does
search private firms. Rather, it draws on studies
on turnover in
that examine turnover at an organizational or macro level, rather
than at an individual or micro perspective (such as Dickter,
Roznowski & Harrison, 1996, Tang, Kim & Tang, 2000; Tett
& Meyer, 1993; Vandenberg & Nelson, 1999).
More recent research has distinguished between
2 turnover
where poor performers leave(which is beneficial to the organi-
zation) and where high performers quit (Park, Ofon-Dankwa
& Bishop, 1994; Williams & Livingstone, 1994)
Since our
3 unit of analysis is state government, we do not
model individual factors These factors have been examined in .05 level) and positively related to voluntary turnover (with a

a number ofstudies, including Blau and Kahn (1981); Buchko .291 relationship, significant at .055).
(1992); Cotton and Tuttle (1986); Lewis (1991); Lewis and
Park (1989), Muchinsky and Morrow (1980), Smith (1979),
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8
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