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The new realities of downsized organizations in the public sector

Dave Childs

As organizations try to cope with the worst recession experienced in our lifetimes, we are witnessing organizational change of a magnitude never seen before.

Businesses are retrenching, and many are forced to implement massive personnel changes. Layoffs have been the approach that businesses have taken in the past, and these layoffs have tremendous impacts on employees, who find themselves searching for employment in a challenging job market. These job losses also have significant effects on the families of affected workers.

Today, in this staggering downturn, one thing that is becoming commonplace (and something we have never seen before) is that sometimes both of the wage-earners in a family have been laid off or are in danger of being unemployed. This double whammy is a new dynamic in our community and sends ripples through the economy in a pervasive way.

It’s also important to note that this phenomenon of job loss (or danger of job loss) for both wage earners is something that has a significant impact among those who remain behind inside the downsized organization. One of the effects is that the stress levels rise markedly among those who are still employed, but who continue to live and work with the fear of the next round of layoffs.

Another difference is how this recession has impacted local governments. While in the past, the services that we’ve come to expect to be delivered without fail such as street maintenance, libraries, parks, water and sewer service, jails and courts and public safety have been able to continue without drastic reductions; this time things may turn out to be very different.

Nothing in my experience over the past 36 years as a leader in cities and counties around the country even comes close to what we have dealt with in Washoe County during the past 24 month, or in terms of what we will face in the foreseeable future. Previously, when our nation was in a recession, local governments would use tools such as hiring freezes, cuts in training budgets and delaying maintenance of roads or other short-term fixes. As a result, local services continued without any noticeable inconvenience to the public.

During past economic slowdowns, counties were particularly challenged because many of the services they provide represent the “safety net” for the very people who became unemployed, lost health insurance, or now need food and housing services. During these downturns, the demand for human services always rose … but because the recessions were less severe and the duration of the downturns was shorter, somehow we got through it.

Today it’s different a world. For the first time in my career we’re looking at significantly downsizing our organization. Two years ago our Building Inspections Department had 36 employees and today there are 13. And, in addition, we’re looking at a 20 percent reduction in pay for the 13 who remain. If we were to close all the libraries and parks in the Washoe County and lay off 100 percent of the employees in those

departments (which we’re not going to do) we wouldn’t even get half way to the cuts needed county-wide.

It’s true that businesses have experienced this kind of downsizing before. One of the differences, however, is that employees in the private sector have traditionally had more of a “transactional” relationship with their employer. Public sector employees have historically experienced a relationship based, in part, on a sense of job security. Many public sector employees have chosen security over the rewards that come from being in an entrepreneurial environment. And, of course we need both types of workers to keep our communities vibrant and growing.

Some key questions that arise regarding the impact of significant downsizing in the public sector include:

* What happens when the sense of security that led to an employee’s choice of a career in the public sector simply disappears overnight?

* Does the passion for public service (another key driver for choosing a career in local government) just evaporate or become irreparably damaged?

* Does organizational loyalty become corroded?

* Are service impacts exacerbated?

Although I don’t believe that these public servants would actually lose their passion for making a difference

in their communities, I do think that part of the implied contract with the organization could fundamentally change. With the employees who are still with the organization, we see that they are waiting to hear who and how many will get layoff notices. It’s a chilling anticipation resulting in some employees becoming psychologically disconnected from their organization. The work is still getting done, but for their own sense of security, they have disconnected themselves from the “employee relationship” that previously existed throughout their career.

The emergence of this potential “worker disconnect” creates challenges for management that go beyond just making the downsizing decisions. Closing swimming pools or reducing library hours are hard choices, but managing employees whose implied contract with their employer has been fundamentally transformed presents organizational leaders with very different challenges.

These are new days for local government managers and leaders. We’ll be looking to the experience of those of you in the private sector to help guide us as we navigate the new realities of employer/employee relationships. Of course, open, regular, consistent communication is critical in managing these changes; along with transparency; innovation; accountability; objective data-based decision-making; which all lead to a sense of shared responsibility for solving the challenges. But more importantly, one of the key factors that we need to learn from the experience of the private sector is that leadership in these times requires a strong “bias for action”. We don’t necessarily need to make perfect decisions, but we do need to make good ones. And we need to make those decisions without unnecessary delay. As a result, once employees have been shown the path to the future and feel a sense of movement toward the goal, the problems that the organization faces will appear more solvable and the “can-do spirit” needed get the work done will return to the workforce.

We, in the public sector, need to take action and we need support from leaders in the private sector to help make these needed changes happen.

Dave Childs is assistant county manager of Washoe County and a faculty member at the University of Phoenix. Contact him at 328-2010 or dchilds@washoecounty.us.