San Diego does a poor job of retaining its highest quality city employees and doesn’t discipline poorly performing workers aggressively enough, according to a new comprehensive analysis by the city auditor.
These problems put San Diego and its taxpayers at risk of low staff morale, weak institutional knowledge, poor city services and higher costs to train replacement workers, the 53-page review says.
The report, which the City Council is scheduled to discuss Tuesday, aims to assess San Diego’s 11,000-member workforce on a number of criteria that include diversity, compensation and job satisfaction.
The survey is based on city employee data and recent interviews with 431 managers and supervisors, plus input from about 40 percent of city workers who responded to an employee satisfaction survey last year.
One factor in the city losing many of its high-quality employees could be the elimination of pensions for all new hires except police officers beginning in 2012. Instead, those new hires get 401(k) style retirement plans, under a ballot measure approved by voters.
Other cities in California still offer traditional pensions, desired by many workers.
City Auditor Eduardo Luna says many of the report’s findings, particularly the loss of high performers and the lack of aggressive discipline for poor performers, are worthy of further investigation.
Other findings include that the ethnicity of the city’s workforce is comparable to the ethnicity of the available workers in San Diego and that the size of San Diego’s workforce relative to its population is similar to comparable cities.
Also, the average age of the city’s workforce has remained just over 43 since 2010, but the number of workers in their 40s has shrunk while the number of workers in their 20s, 30s, 50s and sixties has increased.
Another key finding is that employees who quit city jobs are leaving much more quickly in recent years. Since 2011, the average length of service of an employee before leaving voluntarily has shrunk from nearly 10 years to less than five years.
A factor making this a greater concern is that managers say that turnover rates are higher among the most talented and productive workers.
More than 52 percent of the managers and supervisors surveyed said high-performing workers leave more often than other workers, while only 6 percent said low-performing workers leave more often.
In addition, only 30 percent of managers and supervisors said the city was very effective or somewhat effective regarding employee retention, compared to 51 percent for recruitment and 55 percent for career development.
Because employees quitting is harder to anticipate than retirements, the analysis suggests the higher rate of employees leaving voluntarily could be creating service gaps and costing the city institutional knowledge.
The analysis estimates that employee turnover costs the city $39 million. That amount is not included in the $1.4 billion of the city’s $3.3 billion annual budget that is devoted to personnel costs.
Another key finding was that only 35 percent of employees surveyed said that poor job performance is dealt with effectively in their department.
The analysis said that was a remarkably low number and suggested it could be damaging staff morale and prompting high-performing employees to leave.
The percentages also varied widely by department, with the Police Department, city attorney’s office, planning, environmental services and risk management all below 25 percent.
While the ethnicity of San Diego’s workforce is generally comparable to the ethnicity of the available employees in the city, there are some small differences.
San Diego employs more whites than there are in the available workforce, 47 percent versus 43 percent, and more blacks, 13 percent versus 7 percent.
Consequently, the city employs fewer Latinos than are available, 27 percent versus 29 percent, and fewer Asians, 11 percent versus 16 percent.
On the number of city employees relative to population, San Diego has about eight workers for every 1,000 residents.
That is about the same ratio as Los Angeles. It’s more than San Jose at six per 1,000 residents and Chula Vista at less than four per 1,000, but less than Portland at just over nine per 1,000 residents and Austin, Texas, at 14 per 1,000.
On gender, the analysis found that San Diego’s workforce is 66 percent male and 34 percent female, a ratio that is comparable to local labor force availability for most occupational categories.
The average city salary in 2017 was just over $73,000, up about 14 percent since 2010. That’s an average annual growth of about 2 percent, slightly under the average annual increase in the consumer price index over that time.
The report notes, however, that employees got 3.3 percent across-the-board raises this July and are scheduled for additional 3.3 percent hikes in July 2019.
Those raises follow a five-year pay freeze for many city workers that ended on June 30.
Because pensions were eliminated for new hires except police officers, the number of city employees with pensions has decreased from just under 8,000 to just under 5,000 since then.
The state Supreme Court ruled last month that San Diego skipped a key step when reforming its pension system with the Proposition B ballot measure in 2012. The Fourth District Court of Appeal has been ordered to find a solution.