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.

 

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  • Prettyupset

    5.7 workers for every manager?? These people must be pretty poor employees to require that much supervision. I know of no private sector industry or business with such a ratio. Not one.
    These people are ridiculous.
    The span should be 25, not even 11 or any other number.
    If these people need this much supervision they should be fired.

  • Bob Clark

    Sounds good. Why not also do an across the board freeze of all government agency spending at year 2008 levels or so? Let the agencies figure out how best to balance their missions with available funding.

  • intheknow

    This is a bid by SEIU to convert management positions back to hourly positions, which would then fall under SEIU control. The thought that these management positions would just disappear like the SEIU is suggesting is just playing on those that don’t understand the relationship of SEIU and the agencies that employee their members. Where SEIU is concerned, the high manager to employee relationship is directly contributable to the contract that SEIU has with these agencies. SEIU only controls hourly employees. If you are a manager then you are considered to be a salaried employee and outside of SEIU’s control. Currently, the SEIU contract(negotiated with agencies) states that in order to manage you must have at least 2 direct reports under you. SEIU would love for this to increase to 11. That would be a huge win for them, because agencies would have to convert their salaried mangers back to hourly SEIU represented employees. Employers are forced to adhere to the contract, and they are leveraging their contract to work in their best interest. To save on overtime and on-call costs, they employ these manager to employee ratios to save costs and not increase them. Whether you are a salaried or hourly employee you are still paid for with taxpayer dollars. Only hourly employees pay SEIU union dues. There are certainly needs for unclassified(salary) employees, especially in the realm of on-call and overtime. If the same position were to be classified(hourly), then overtime would be paid out in those positions. In the financial and IT areas of business there are significant overtime and on-call hours worked, and the bulk of that is performed by unclassified(salary) management. Under the new bill, this would have to be paid out to classified employees. In the end, organizations would just restructure around the bill and likely not save any jobs, and could in the end, increase overall costs to do business. In theory, the bill sounds good and may be effective in agencies that do not employ union workers. In reality the ratio of 1:5.7 is a product of other factors such as those described above. Without additional cleanup that is causing this ratio to exist, just passing HB 2020 would increase costs and lower productivity while agencies restructure around the bill. Dennis Richardson likely doesn’t understand this relationship, and is giving credit to the SEIU when he shouldn’t, as this would be a huge win for SEIU and a big loss for taxpayers. The recommendation by SEIU has nothing to do with saving you or I money, and everything to do with increasing their memberships. Dennis, please explain why you site SEIU’s completely misleading quote as the need for this bill.

    • Madashell

      You have made some good points. It only makes sense if they fire these people. Not transfer them to hourly or anything else.
      These people are so stupid they will believe anything.
      I say end all state collection of union dues. Let these people mail in their own checks.

    • docta’jones

      These are things that Rep. Richardson would like to know. Although he tries to determine the true motives behind proposals such as these, he may not be in the know about everything. Until I had read your post, I thought it was a great idea. I am going to verify your information and then talk to Dennis about it. I sincerely hope that you contact his office as well. The more eyes and ears he has out there, the better equipped he will be to do what’s best for Oregon.

  • Sal

    Dennis Richardson is demonstrating how true bi-partisanship should work. Taking good ideas from the other side of the aisle, giving credit for those ideas, and treating everyone with respect.

    I have been very impressed with how the Governor and our legislature have been working together in this session. It’s something that voters wanted, and they have clearly responded.

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