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State hiring freezes tend to melt away 23, 2011

State hiring freezes tend to melt away 23, 2011

Rich Pedroncelli)
California Gov. Jerry Brown, shown addressing a labor conference Monday in Sacramento, has imposed a state hiring freeze with tough provisions. It prohibits hiring outside contractors to make up for vacant positions, converting jobs from part-time to full-time, and transferring employees among agencies and departments. All exemptions require approval from the office of the governor. (AP photo: Rich Pedroncelli)

Display of discipline is fiscal and political necessity these days

Oklahoma state government has been under a hiring freeze since 1991. At least technically, it has. The degree of frozenness has varied enormously from agency to agency. Some departments have brought in huge numbers of people while the freeze has been in effect. The directive hasn’t been lifted because no governor wants to see a front-page headline, “Governor Ends Hiring Freeze.” It doesn’t sound fiscally conservative.

“We all know it’s silly, but it’s one of those political realities. And if I were governor, I, too, would not want to end the hiring freeze because of the fallout you’d get,” says Hank Batty, deputy administrator for programs in the Oklahoma Office of Personnel Management. While Batty says “I’m not proud of this,” he notes that the freeze has had some effect. For example, “it has added a bureaucratic process through which you have to get the approval of a Cabinet secretary to hire a correctional officer.”

Oklahoma’s freeze is unusual in its duration, but hiring freezes, at least nominal ones, have become a way of life for many state governments. In a January 2010 survey of personnel managers by the Center for State & Local Government Excellence, hiring freezes were found to be the most common cost-cutting measure, with more than 65 percent of those surveyed indicating that their state or locality had implemented some kind of freeze in recent years. In contrast, 40 percent said they had laid off employees and 30 percent had implemented furloughs.

Some of the freezes have been short-term affairs, and largely symbolic. Others have been launched as multiyear cost-cutting efforts. But these sometimes have reverse consequences, adding new, semi-permanent layers to the bureaucracies they’re tasked with trimming.

Even the strictest hiring freeze is somewhat of a misnomer, as it would be impossible for states to truly halt all hiring. Prisons and other 24-hour facilities couldn’t continue to function without adequate staffing levels. Even in the current economy, with less competition from the private-sector job market and many retirement-eligible employees working longer, turnover through attrition makes continued hiring necessary to perform core government functions, no matter what the proclamation may say.

Vermont Gov. Peter Shumlin, who took office this year, announced a hiring freeze the day after his inauguration, but his administration quickly realized that the freeze needed to be modified to allow agencies greater flexibility to fill positions. “It’s not accurate to say the hiring freeze is over,” Administration Secretary Jeb Spaulding told the Burlington Free Press in February, but he acknowledged that some agencies are now being given the flexibility to hire without explicit approval from the governor’s office for each position, as originally envisioned.

Rules to the exceptions

Everyone involved in a hiring freeze knows that there are going to be exceptions. The key to realizing some benefit from the exercise, says Paul Campbell, a former director of the Illinois Department of Central Management Services, is making the exceptions on the basis of accurate numbers and administration strategy. “It’s far more effective,” Campbell says, “when you rely on the data and the decision about which positions to freeze is supported with a proper business case.”

California state government functioned under hiring freezes at various points in the past decade during the administrations of Govs. Gray Davis and Arnold Schwarzenegger, but none of the freezes proved to be particularly effective at shrinking the state’s payroll. So when Gov. Jerry Brown announced a hiring freeze soon after taking office this past January, there were plenty of skeptics.

But Brown’s freeze, unlike Schwarzenegger’s purely advisory directive to state agencies, was done by executive order and has some tough provisions. It prohibits hiring outside contractors to make up for vacant positions, converting jobs from part-time to full-time, and transferring employees among agencies and departments. All exemptions require approval from the governor’s office.

The freeze has already caused problems for a few high-priority IT projects, including an overhaul of the state’s accounting systems. “It’s an important project, and it has been difficult to get the staffing levels that they need in order to roll it out,” says Nick Schroeder, of the California Legislative Analyst’s Office.

More than temporary

Washington state has what may be the most serious long-term hiring freeze anywhere in the nation right now. Put into place in 2008 as a temporary measure to help the state regain its fiscal footing, it was accompanied by other cost-cutting measures, such as a ban on out-of-state travel, discretionary equipment purchases and personal services contracts.

After three years, the hiring freeze has begun to feel less like a temporary precaution and more like a standard way of doing business. The freeze was temporarily lifted in 2009, but the Legislature returned it to law soon afterward, and it has been in effect ever since.

But in Washington state, as everywhere else, there are inevitable exceptions to the freeze. It does not cover many positions in law enforcement, public health or environmental protection. It does cover higher education, but there are a number of exceptions there as well.

Still, the process of granting the exceptions can be complex and time-intensive. Outside the exempted areas, an agency director must fill out a detailed form explaining the need for a new hire and appeal to the Department of Personnel, which analyzes the position and makes a recommendation to the Office of Financial Management. The request is then analyzed by budget and policy analysts and approved or denied by the state budget director.

Julie Murray, legislative director of the Office of Financial Management, says the process has eased up in the last couple of years as agencies have gotten better at anticipating which positions have a chance of being approved and which are not worth the hassle.

“No one is trying to boost their FTEs,” she says. “The agencies are just trying to get by.”

Still, says Murray, these decisions would be best left to the agencies now that the situation has stabilized and the state has a more accurate projection of its long-term fiscal outlook. “It’s better to let the agencies manage to a budget,” she says. “At this point the return on investment on this [freeze] process is severely diminished.”

Part of the challenge with all hiring freezes is that it is difficult to measure success. A December investigation by The News Tribune of Tacoma found that Washington state had granted 1,700 hiring freeze exemptions since last March. No one knows how much the state has ultimately saved through its strategy, or how many positions would have been filled or created without the freeze because of retirements, turnover or other business needs.

Delaware is another state that has a history of hiring freezes. But House Minority Leader Greg Lavelle, a Republican, says most of them have lacked transparency, with conflicting data about hires and cost savings during the freeze period. This includes a recent freeze that was implemented soon after Democratic Gov. Jack Markell took office, he says.

“It’s always done with a lot of fanfare … and it either ends quietly or extremely quietly,” Lavelle says. “Then when you look at the numbers, it’s hard to tell if it even accomplished anything.”

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