Trends in the Separation Rate for Public Employees

by | Dec 13, 2023 | 403(b)/457, Financial Advisors, Growing Advisors Business

This past year, I’ve spoken about employee benefits and retention at several conferences around the country, and I’m particularly interested in the monthly separation rate for government employees. In 2020 and 2022, the numbers spiked, making it difficult for many public employers to maintain their quality of service.

For context, the graphic below charts the annual separation rate from 2009 through 2022. Excluding the spike in 2010, we see a consistent increase in separations from 2009 to 2019, which increased demands on many HR departments. The separation rate spiked in 2020, settled down in 2021, and then increased again in 2022, causing consternation for many.

The latest figures just released by the Bureau of Labor are more encouraging. The values for September and October are the lowest of the year, indicating government employees are not leaving their jobs as much as they had previously. The average monthly separation rate for 2023 is just 1.48%, which is lower than any year’s average since 2014.

 

Note the volatility of the separation rate for 2023, which was exceeded only in 2010 and 2011 (excluding 2020, during the lockdown). This could indicate that we may see a higher end-of-year bounce at the end of 2023 than in other years, or that things may finally be settling down. I look forward to December’s numbers being released in February 2024, when we’ll know whether the typical end-of-year increase has occurred and whether it is higher than normal.

Being aware of what public employers are experiencing can help an advisor better understand and engage the business offices at the school districts they service. Their pension system is a key employee benefit that many of their employees do not understand. Letting the administration know that you will be helping employees better understand their pension should impact employee retention and can help differentiate their services from other advisors, not only with clients but also with the administrative personnel.

Download a Free Trial of our TRAK Software Today!

TRAK-Online TrialDesktop Trial

Download a Free Trial of our TRAK Software Today!

TRAK-Online TrialDesktop Trial

Financial Planning Software that Wins New Clients

Retire Ready Solutions strives to create the ultimate retirement planning tools that allow financial advisors to win new clients and support existing clients. That's our reason for being, our premise of existence. We do not build software for laypeople or DIY consumers, we build best-in-class...

Changing Retirement Plan Trends in the Healthcare Industry

As healthcare organizations move away from offering defined benefit plans and seek to find retirement benefits to offer to employees, certain trends emerge. Let’s look at some of the trends that came out in the Transamerica survey.

Five Ways to Improve Communication with Clients

Playwright George Bernard Shaw said that “the single biggest problem in communication is the illusion that it has taken place.” As a playwright, Shaw knew the importance of really communicating with the audience, making sure that the concepts, emotions, and thoughts you want to impart are what the...

Getting a Clear Picture of Retirement

How to get a clear picture of your retirement? Read more to learn how advisors that use TRAK online has the tools and resources they need to provide the clear picture you are looking for in retirement.

Common Misconceptions About Social Security

Clients come to the retirement planning process with many misconceptions about Social Security. With inaccurate information circulating on social media and by word of mouth, financial advisors shoulder a lot of responsibility to educate clients in this area, helping them achieve a better...

Tips for Working with Public-Sector Employees

Are you looking for new clients? How would you like to tap into an underserved group of over 23 million people? Your next client may be someone you already know like your mail carrier, your local firefighter, or your child’s teacher. Public-sector employees are one of the largest groups of...

IRS 2020 Contribution Limits

The IRS released the 2020 contribution limits on November 6. Thank you for your efforts and time spent bettering the retirement outcomes of your clients! As you begin planning for the new year we wish you the best in the various markets you serve.