HR Plays Moneyball

One does not have to research far to realize state and local agencies have been running into a budget problem since the 2008 recession – and although states are recovering, Texas faster than others,1 local governments are having to do much more with much less. The Virginia Department of Human Resource Management, for example, experienced a 37 percent in budget cuts and 41 percent reduction in staff all while experiencing an increased demand in performance.[1]There are a handful of reasons agencies are struggling and reasons why they need to take action now to plan for the future, but an important point to make is although “the challenges facing local governments are daunting [they are] not insurmountable”.2

            After reading about the situation most cities find themselves in, their situation seems to be an incredibly difficult, almost hopeless, situation.  States are still recovering from the great recession that occured a decade ago and do not seem optimistic about the future as these circumstances do not seem to show any signs of reversing.3 But this can’t be the first time states and local governments have gone through this kind of struggle. And upon reflection, these kind of problems are not limited to local agencies. Local agencies are playing an unfair game: limited funding, competitive recruitment, increased demands, and a tremendous amount of pressure from the public and unions. Most baseball fans know the term “Moneyball”. A story made famous by author Michael Lewis, tells a story about how an underdog organization won an unfair game. The underdog team, the Oakland Athletics (the A’s), have historically had a dramatically low budget. As Moneyball hero, Manager Billy Beane put it, “there is 50ft of crap, then there’s us”4 – and to make it worse, the team had to compete against power house teams like the New York Yankees with huge budgets. Billy Beane, and even more recently Jeff Lunhow with the Houston Astros5, changed the way baseball teams viewed the game by increasing reliance on technology, communication, and disregarding baseball’s reliance on outdated rules of thumb and gut feelings – but more importantly, employing workforce planning. If one imagines local governments (the A’s) competing with big businesses (The Yankees) for talent, then it is apparent they can use the same strategies to win this unfair game.

The Challenges

            The challenges facing local governments are clear: limited resources, outdated communication, an aging and changing workforce6 , employee and citizen relationships, and increased performance demands.7 State agencies and local governments are having to plan for the future to figure out how to transfer control from the retiring Baby Boomer generation all while trying to give their staff more autonomy and flexibility to do more with less. In some cases, agencies have to layoff their workforce or cut their benefits just to balance the books. These decisions are incredibly difficult to make and the repercussions are serious. One thinks of the 2012 protests witnessed in Wisconsin when Governor Scott Walker attempted to trim employee benefits which resulted in protestors, public employees, and union members occupying the state capital.8

            The local government and agencies “are responsible for critical public service commitments…and are at the same time dealt the deepest personnel management cuts”.9 And when dealt these deep budget cuts, agencies look to the least necessary expenses to balance the books which include employee cuts that affect human resources and customer support. The Internal Revenue service is a great example of increased demands for service with deep budget cuts and displays the same pattern of decisions when looking for expenses to cut. In 2015, the IRS decided to cut back on customer service which lead to over 8 million dropped calls, equating 60% of all calls handled by the IRS.10 No matter if the problem is with local or federal agencies, “when the goal is saving money, personnel costs are generally first” and have “both short-term and long-term implications for service delivery and societal outcomes”.11

            The solutions to these problems are simple to imagine, but difficult to implement. By the time I finish the end of this sentence, the reader has already thought of a number of ways to handle this – most of the solutions center around a highly trained and specialized workforce. It is not that simple, and just like the Oakland Athletics or Houston Astros, local governments find themselves in an unfair game to recruit and retain talent.

The Solutions

            Billy Beane and Jeff Lunhow, with an incredibly insignificant budget, had to recruit low-cost players, layoff overpaid veteran players, change the mind of the organization’s old recruiters, and keep the team’s fans and employees happy – all while competing against high budget teams who, in some cases, had a budget 5 times their own.12 Many organizations are doing the same thing to stay alive in these troubled times. In fact, an organization called “Moneyball for Government” is trying to push the same principles. The organization asserts that less than one dollar out of every one hundred is spent by government with evidence the money is spent wisely. This reliance on gut instinct “at a time when our nation is facing enormous social and economic shifts, budget constraints at all levels of government, an increasingly competitive workforce and growing demand for government services, young people, their families and communities are especially vulnerable”.13 The goal for local government is to create evidence-based policies, programs, and practices that will achieve effective results.

            The first solution is to create a strategic plan in order to align an agency’s vision, mission, goals, and objectives with three basic questions: Where is the agency now? Where does the agency want to be three, five, and ten years from now? How does the agency get there? Taking the environment of change (that is, the anticipated changes in the agency or community) into consideration, the agency needs to hold strategic planning sessions to communicate the goals with the entire organization.14

With an agreed strategic plan, operational objectives need to be determined to make their plans a reality. These operational goals address the organization’s service, quality, and effectiveness and how they flow from team behavior to primary activities of agencies to the collective activities.This is where most of the problems occur as reasonable decisions are bounded by political compromises, bureaucratic challenges, and fiscal constraints – not to mention that “it takes time to change minds”.15 Through the difficult decisions, agencies need to consider the kinds of skills and competencies needed to implement goals now and in the future and what programs and activities need to be reviewed, changed, and implemented. The operational objectives will always end up being a “coordinated set of actions aimed at integrating an organization’s culture, organization, people, and systems”16

And finally, organizations need to employ some form of workforce planning which is the process of identifying positions, skills, and competencies needed now and in the future to accomplish the organizational objectives.17 This is where organizations would employ more technology, automation, and specialization to accomplish their goals.18 Agencies generally follow five basic steps19:

  1. Analysis of Human Capital – a deep evaluation of the workforce
  2. Demand Analysis – determining what human capital is needed in the future
  3. Gap Analysis – what are the current and future workforce needs and how will the agency accomplish them
  4. Solution Analysis – The strategic implementation, ways to address the gap problems
  5. Follow through and feedback – determining if the solution is working

Conclusions

            The problems of local governments are not new, nor are they impossible to solve – no matter how bleak it may seem now. By aligning organization goals with the human capital, agencies can accomplish the increased demand with the limited resources. If the Oakland A’s and the Houston Astros can recruit, train, and retain talent to win an unfair game, so can local government. The key is workforce planning to align human capital with the agency goals.

Notes

  1.  Derek Thompson, “How Texas is Dominating the Recession”. The Atlantic, Retrieved September 2, 2018 from https://www.theatlantic.com/business/archive/2010/07/how-texas-is-dominating-the-recession/60721/
  2. Sally Coleman Selden, Human Capital: Tools and Strategies for the Public Sector (Washington, DC: Sage, 2009) pp 14.
  3.  Richard C. Kearney, Jerrell D. Coggburn, Public Human Resource Management: Problems and Prospects 6th ed. (Los angeles, CA: Sage, 2016) pp 87.
  4.  Ibid. pp 87.
  5.  Simon Kuper, “Inside Baseball”. The Slate, Retrieved September 3, 2018 from http://www.slate.com/articles/sports/ft/2011/11/michael_lewis_and_billy_beane_talk_moneyball_.html
  6.  Ben Reiter “How the Houston Astros Invented a New Method to Build a Champion” Sports Illustrated Retrieved September 3, 2018 from https://www.si.com/mlb/2018/04/18/houston-astros-astroball-ben-reiter-book
  7.  Claudia Megele, “Local Government in 2020: Challenges and Oppurtunities” The Guardian, Retreived September 3, 2018 from https://www.theguardian.com/local-government-network/2012/apr/11/local-government-2020-challenges-opportunities.
  8.  Ibid. Selden, pp 19.
  9.  Ibid. Kearney and Coggburn, pp 83.
  10.  Ibid. Kearney and Coggburn, pp 79.
  11. Stephen Ohlemacher, “IRS Dropped 8 Million Calls during Tax Filing Season” PBS News Hour, Retrieved September 2, 2018 from https://www.pbs.org/newshour/nation/irs-dropped-8-million-calls-tax-filing-season.
  12. Ibid. Kearney and Coggburn, pp 81.
  13.  Ryan Wright, “Moneyball: A Look inside Major League Baseball and the Oakland A’s” Bleacher Report, Retrieved September 3, 2018 from https://bleacherreport.com/articles/858470-moneyball-a-look-inside-major-league-baseball-and-the-oakland-as.
  14. Moneyball for Government, “Moneyball for Government Principles” Retrieved September 3, 2018 from http://moneyballforgov.com/moneyball-principles/.
  15. Ibid, Selden, pp 16-17.
  16. Ibid, Selden pp 18-19.
  17. Ibid, Selden pp 20-21.
  18. Ibid, Kearney and Coggburn pp 85.
  19. Ibid, Selden pp 24.

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