Workforce Management: The step before service cuts

August 17, 2020

Jennifer Dowd, Sr Manager, Public Sector Marketing, Kronos

As labor accounts for the largest operational cost in local and state governments, it’s no wonder this is an area of scrutiny when budgets are being planned.  Regularly, I hear about furloughs and layoffs.  I recognize that such steps are often a necessity but cutting labor should be the last resort.

At Kronos, we work with governments across the country to focus on efficiency measures that help with the transactional processes of managing the workforce.  That includes things like time & attendance, absence management, and scheduling.  But, creating efficiencies only solves half of the problem.  What’s more important is using the data collected to make better decisions about the future. The data allows departments and agencies to ask the right questions and look for areas of improvement.

There are three areas of perceived waste in which both state and local governments often lack enough information.   In all cases, data is your friend.  Being able to drill into the spending across the board gives leaders and managers the opportunity to look for areas of change and address outliers ahead of them being “problems”.  Let’s investigate these areas a little more closely.

Overtime

Overtime continues to haunt many government entities.  It may not be a major problem in every department, but it can creep up and result in wasteful dollars if not managed.  Katherine Barrett and Richard Greene recently published a report on “The Great Overtime Dilemma”.  After careful review of audits and interviews with government leaders, they share best practices and guidance on where overtime can be controlled and managed.  Their research led to the conclusion that, “Although overtime may be expensive, it is critical to distinguish the instances where it is both necessary and useful from those where it is unnecessary and possibly even risky”.  When data is available, what questions can leaders or managers ask?

• Could we be doing a better job of scheduling staff in these departments?
• Do union rules/policies play a role?
• Do we need to hire more staff, or could we take advantage of unused capacity?

Unplanned Absences

When you look at the most recent data from the Bureau of Labor Statistics, it’s clear that governments have some of the highest rates of absenteeism when compared to the Private Sector.  These numbers represent all types of absences, but unplanned absences are the most troublesome. The scramble to find coverage or shift job duties to others takes its toll on managers.

Fortunately, unplanned absences can be managed to have as little disruption as possible.  With the right data and visibility, actions to keep services uninterrupted can be made quickly when proactive measures are in place.   Besides being able to identify what percentage of absences are planned vs unplanned, data can also help leaders look at the bigger picture.

• Do we have an absenteeism problem?
• Is productivity impacted?
• Is this causing overtime?
• Are employees with 3 days or more of consecutive sick time being notified of FMLA laws?

Management of grant dollars

Grants are essential to governments programs. Without them, thousands of programs that support the community can go unsupported.  According to the Tax Policy Center, “The federal government distributed about $721 billion (about 16 percent of its budget) to states and localities in fiscal year 2019”.  But whether federal funding is planned or because of an emergency, good record keeping must accompany the acceptance of these funds.  Nothing is more frustrating to a funding agency, a recipient, and the public than the mismanagement of grant-funded projects and the revocation of assigned dollars.  Labor accounts for much of this funding and is often the hardest to report back on.  It’s imperative to know exactly where the labor dollars are spent to help keep funding from being pulled back.  Detailed time and effort reporting not only provides grantors with proof the funds were spent responsibility, but also allows financial leaders to ask important questions.

• Have we accounted for all departments involved in the project?
• Do we have a reliable audit trail?
• How much overtime used can be reimbursed?

Ultimately, governmental capacity to improve on the collection and analysis of data are far less onerous approaches than depriving citizens of services to which they’ve grown accustomed. Clearly, the three areas mentioned about can use such tools to help control expenses.

The real key of course, is to use data to identify outliers and change directions before the budget is thrown sufficiently out of balance and citizens suffer.