Where Less is More Efficient
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The idea first arose during the days of $4-a-gallon gasoline in the summer of 2008. But now, even with energy prices way down from their peak, reduced work schedules or "furlough" programs keep popping up. In recent weeks, both Chicago and Rhode Island have saved money by shutting down non-essential services for a few days, and Utah has experimented with a four-day work week.
The current interest in reduced work schedules is easy to explain. With budgets drowning in red ink, cutting back on work schedules is an immediate way to reduce costs. But there are signs that the approach may have another, unexpected benefit: greater efficiency.
Atlanta's experience is worth noting.
Like many cities, Atlanta was facing a big projected revenue shortfall, between $60 million and $80 million. To generate savings, Mayor Shirley Franklin chose to institute a furlough program. Starting in December 2008, all municipal employees (except certain public safety workers) were shifted from 40 hours per week to 36 and began working four days per week, nine hours per day. Cost savings were generated through a commensurate 10 percent decrease in pay, as well as additional savings from decreased energy usage in municipal buildings.
Mayor Franklin did not have to negotiate these changes, Georgia being a state without public-employee unions. The schedule change was mandatory, meaning every city worker experienced a 10 percent reduction in salary. So how did employees react to the change?
"Employees love it," says David Edwards, a senior policy advisor to Mayor Franklin. "They really love having the three-day weekends." Employee commute time and gas usage has been reduced by 20 percent, and the increased leisure time of a steady stream of three-day weekends has been a major quality-of-life boost.
In addition to improved morale, it appears that the reduced work week may be cutting absenteeism. "One area we looked at closely was corrections," says Edwards. "We found a 40 percent decrease in absenteeism." With close to 450 employees working in Atlanta's city jails, the productivity benefits go hand in hand with improved quality of life for employees.
The biggest surprise with the Atlanta four-day work week program has been the unexpected boosts to productivity. "There has been a direct productivity boost in a lot of operations, particularly those that entail travel, setup and breakdown time, such as road repairs," says Edwards. For those jobs with one-hour transitions on each end, the four-hour weekly reduction in compensation translates into only two hours fewer of productive labor.
Moreover, productivity per hour seems to have increased. Atlanta's ATLStat performance measurement system shows that the decrease in work hours has not translated into lower outputs. "The 10 percent decrease in work time is not showing up on the outcome side," said Edwards. "There has been no increase in backlogs, and all the performance targets we use — potholes filled, building permits issued, and that sort of thing — are showing no decreases in output. Zero."
According to Edwards, when the program was first introduced, residents still came to City Hall or elsewhere seeking services on Fridays, only to be turned away. "Once people adjusted to the new hours, we really haven't seen any complaints from the public," says Edwards. In some cases, shorter business hours at City Hall prompt citizens to change their behaviors, renewing business licenses by mail or paying parking tickets on the Web rather than in person. Such transactions are generally less costly for the city to process.
The Atlanta program had its share of critics. The biggest concern of citizens had to do with a perception of cutbacks in public safety. The same budget shortfalls that prompted the furloughs had prompted cutbacks in public safety — police patrols had been reduced and one fire station had been closed in December. In late June, with the support of Mayor Franklin, the city council voted 8-7 to increase city property taxes by more than 40 percent. In light of this tax hike, officials chose to discontinue the reduced work schedule.
The furlough programs were mostly ended at the beginning of July, and Atlanta's employees are back to the old nine-to-five.
As the nation's economic woes continue, however, various types of furloughs will continue to be a tool for public officials facing massive budget shortfalls.
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Reply to: Employees love a 10% cut in income?
From: Lawrence Rosier Management Consultant Government Reform 573 364 8789
Government Reform Website: http://managementconsultant.blogsome.com
I sympathize with your position nearly everyone in the entire nation has taken some kind of hit from this recession. Government employees are not the lazy losers that they are made out to be by leaders that want to privatize government functions. They are no different from private employees most are dedicated to doing the right thing on the job.
So what is different its the bureaucratic style of management that is to blame here not the employees. Yes it is true that private industry has bureaucracies too and they are just as bad to work for. My recommendations for government reform replace the bureaucratic style of government with a simpler type of organization while inspiring then empowering employees to do continuous innovation. The best examples of this type of organization are found in industry using Total Quality Management. Most notably Honda and Toyota but I have found that TQM even works better in health care and education than it does even in the automotive industry. See my Article 116. Private Industry Example of Total Quality Management and Article 128. Using Private Industry techniques to Privatize (Reform) State Government.
Now back to Atlanta. The Atlanta government is very poorly managed its per capita costs for running the government is 46% higher than the average city its size. Its property taxes are 39% higher and it takes more than 30% more to run its schools. In private industry the Atlanta government would have been shut down years ago for being unable to compete. So now when the city must act what does it do? It raises taxes another 40%. In this case its the bureaucracy that caused the over staffing and its not the employees' fault but now it has to be faced or it will end in a melt down of the government.
Employees love a 10% cut in income?
As a public employee who received furlough days this year that amounted to a 10% salary cut and anticipates more of the same for 2010, I am skeptical of David Edwards's claim that City of Atlanta employees "love" their furlough days. While I'm sure, like us, they understand that revenue is down and prefer furloughs to massive service cuts and lay offs (hundreds of our colleagues lost their jobs last year, after all), nobody "loves" a salary cut, even if it means some extra free time.
One constructs ones life and finances in accordance with one's anticipated income. Although we all know we should, very few of us have a 10% cushion built into our budgets. My car, mortgage and student loan payments have not decreased along with my salary. Among my colleagues, our furloughs and, in some cases, other family job losses, have led to everything from "staycations" to canceling the cable to pulling kids out of private school to mounting credit card debt to mortgage restructuring to selling homes to make ends meet. Meantime, the workload hasn't changed and, not surprisingly, morale is down. I can't help but believe that impacts productivity.
Of course, all this just puts us in the same place as many of the citizens we serve - struggling to make ends meet. I chose to go into public service because I believe it matters. I am concerned about decreases in public services at this time when people need them the most. My concern for the well-being of my own family does not take away from my concern for the public or my commitment to my job.
I frankly resent the implication of a couple of the articles in this issue, which seem to be saying that public employees who don't like budget cuts are selfish and, oh yeah, don't work hard enough anyway. I would think that of all publications, Governing would have a little more respect and understanding for public employees, our work ethics and our motivations.
Reform of Atlanta City Government Versus 40% Increase in Taxes
From: Lawrence Rosier Management Consultant Government Reform 573 364 8789
Government Reform website: http://managementconsultant.blogsome.com
Let’s take another look at what is going on here city employees working 36 hours per week still produce the same as when they worked 40 hours per week. This proves that the city is at least over staffed by 10%. I have stated in numerous articles that where Work Measurement is not used there exists at least 10% over staffing. But since the city of Atlanta does not do Work Measurement over staffing is most likely more than 10%.
My recommendations for Mayor Franklin is to continue the 36 hour work week, repeal the 40% increase in city property taxes and implement the following reforms to the city of Atlanta government.
I recommend two major reform initiatives one is the streamlining of service to the public. You can reduce their number of offices by the implantation of a Customer Relations Management 311 telephone portal and give 24/7 service to the public. Read
how Hampton Virginia did this in my Article 101. The Hampton Virginia Innovation Story. See other articles: 102 and 141.
The objective of the second reform is to replace the 19th century bureaucratic structure of the Atlanta city government with a downsized streamlined 21st century organization with fewer levels of management that encourages innovation by empowering both management and employees. This method requires little investment by the city but the redirecting of training efforts for the implementation of Total Quality Management. The method uses Work Measurement to establish a staffing base for the city’s functions. See details of how to do this in my articles: 103,104,106,119,132,135 and 137.