Audit finds low pay, telework policy among drags on the city’s worker retention rate

A recent audit by the Office of the City Auditor found the city’s efforts to retain employees are falling short, with compensation, career progression and telework policies standing out as problem areas. With a turnover rate that peaked at 11.77 percent in 2022, the need for more effective and strategic retention policies has become critical.

The audit, which was discussed at Wednesday’s meeting of City Council’s Audit and Finance Committee, showed the current turnover rate is just over 8 percent. The rate has decreased from nearly 12 percent in 2022, a time when municipalities and private companies were dealing with elevated rates of workforce turnover.

The audit highlights that replacing an employee can cost up to four times their annual salary due to lost productivity, hiring and training expenses.

The city’s benefits packages were seen as a highlight of worker compensation, but uncompetitive pay rates, limited career advancement opportunities and a reduction in telework for most employees were seen as consistent problems. The pay problem is more acute for Austin workers because the city’s cost of living is the highest in Texas.

The audit shows that while the city’s living wage has increased from $14 to $20.80 per hour since 2018, this still doesn’t match the rising costs of living. Even with the recent increases, a comparison of entry-level salaries across major Texas cities reveals that Austin often pays less than its counterparts.

Over half of the employees who left the city cited dissatisfaction with the lack of career progression opportunities. Currently, only 19 career progression plans exist across 10 of the city’s 34 departments, leaving workers with limited options for growth within their roles.

The 2023 policy change for telework, which requires employees to report to the office at least half of the time, has caused significant dissatisfaction, with 73 percent of employees considering telework crucial to their consideration to stay with the city.

The other major finding of the audit concerned the city not using data from employee surveys and exit interviews effectively.

Recommendations in the audit included reassessing the city’s compensation strategy to ensure it remains competitive against rising living costs. It also said the city should expand career progression plans to cover more departments so employees have clear paths for advancement. Furthermore, revisiting the telework policy to offer more flexibility could help retain employees who value work-life balance.

At Wednesday’s meeting, Council members questioned staff from the Human Resources Department about whether departments with highly technical jobs had any higher rates of turnover, and what could be done to address that.

Susan Sinz, director of Human Resources and Civil Service, said positions such as paramedics that require a high level of training have become hard to fill and retain because of the city’s high cost of living. Because of the reduced ability to hire those positions from elsewhere, she said Austin typically has to “grow our own” to achieve the desired staffing levels.

Council Member Ryan Alter pushed the HR staff to expand the use of employee surveys beyond director and assistant director levels so the city can learn what issues more front-line workers are facing. With more than half of city staff living outside of Austin, he said factors such as telework and compensation play off of each other because of the impact on workers’ quality of life.

“The number is staggering that more than half of our employees are living outside the city. We all know what it’s like to drive around the city, and sometimes you can’t pay anybody enough to drive on MoPac or I-35,” he said. Telework “is such an opportunity for us to be able to keep our valuable city employees at a very low, low cost and even sometimes savings because we’re not gonna have to pay for the office space.”

Photo made available through a Creative Commons license.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.