Rep. Richardson: Cut management in state government to save money

by Rep. Dennis Richardson (R-Central Point)

Managing Oregon’s Workforce, Reforming “Span of Control”

I am State Representative Dennis Richardson and this newsletter is for all Oregonians who care about having a leaner, smarter and more efficient state government.

This newsletter focuses on the waste of money inherent in Oregon’s narrow “span of control” ratio and what can be done to expand it. Now is the time for Oregon’s state agencies to change the way they manage their workforce.

“Span of Control,” as used in this newsletter, refers to the ratio of front-line workers to supervisors and managers. Although not all managers are supervisors, for today’s purposes, Oregon currently has a relatively narrow span of control ratio of 5.7 workers for every supervisor/manager in agencies having 100 or more employees.

Thus, Oregon’s average span of control is 5.7 to 1. For comparison purposes, Texas has a statutorily-mandated span of control ratio of 11 to 1 Click here.

The Service Employees International Union (SEIU) has produced some compelling research relating to Oregon’s span of control problem. Although I do not always see eye-to-eye with SEIU, I believe in giving credit where credit is due. Consider SEIU’s findings:

“If the goal is really to re-shape government, Oregon needs to examine the structure of its agencies. A review of the manager-to-staff ratio agency by agency—the most comprehensive of its kind so far as we know—found that Oregon’s ratio is very low—just 5.7 workers for every manager. Finding the optimal balance between workers and managers is one key to encouraging prompt and responsive decision-making, leading to productive and efficient operation. During this budget crisis it can also save significant resources. A full review is warranted, but for now in order to ensure that Oregon does not sacrifice essential services to protect a structure that remains largely unexamined, SEIU recommends that the Legislature direct agencies to increase their worker-to-manager ratios by one each year of the biennium. This would mean increasing the current 5.7-to-1 ratio of workers-to-managers to 6.7-to-1 by July 1, 2011, and 7.7-to-1 by July 1, 2012. While this is not a solution to the organizational issues facing agencies, it will result in significant cost savings of $71,004,424 in General Fund dollars and $253,587,228 in Total Funds—and quite likely actually increase service quality across state agencies with the removal of unnecessary and counterproductive layers of excessive management.” Click here.

In sum, the narrower the span of control, the more supervisors the state employs and the more money the state spends on supervision. If Oregon would widen its span of control by even one or two workers, the savings in supervisory personnel expenses over the next two years would be substantial.

To promote such a transition, my fellow-Co-Chairs of Oregon’s Ways & Means budget committee, Rep. Peter Buckley (D-Ashland) and Sen. Richard Devlin (D-Tualatin) have joined with other Democrats and Republicans in proposing House Bill 2020. If enacted, HB 2020 would require Oregon agencies to begin the span of control transition to the 11 x 1 ratio used by Texas.

Enacting a law requiring Oregon agencies to adopt a wider span of control would save tens of millions of dollars currently squandered on inefficient and antiquated levels of supervision and management. Such an operational change would recognize Oregon’s highly-educated and capable cadre of front-line workers and give them greater discretion in performing their duties.

Large successful corporations converted to wide span of control years ago. Private enterprise understood that this change was required in order to stay competitive in a lean, smart and efficient global market. It is time for the State of Oregon to do the same.