Business / Economy

OPINION: The dangers of balancing budgets on vacant positions

High percentages of perpetually-vacant positions promote underlying budget problems

Budget time for San Benito County and Hollister is rapidly approaching which means we will have another opportunity to deal with the issue of planned or perpetually vacant positions. A high percentage of perpetually vacant positions promotes budget problems.

Budget hearings usually focus on total personnel costs because that is, typically, the largest operating expense, but sometimes there are planned and/or perpetual vacancies even during normal or robust economic times.

Allowing perpetual vacancies without budget adjustments can lead to compensation cost inflation where individual compensation is allowed to rise as long as the total remains within the budget. As time goes by, the unused funds look more and more like a slush fund that can be used for accelerated promotions, overtime and other financial goodies. The typical defense — “we are still within the total budget” – does not address the underlying problem. That happens everywhere, but less so in the private sector where the difference between what you take in and what you spend is either profit or loss.

Later, when a department needs to fill vacancies, the personnel budget is already fully committed and the only options are to increase the budget again or do without. The upshot is that the vacancies never get filled and that sharpens the question; do we need those positions? If we do, why didn't we fill them? If the funds are used elsewhere, how can we ever hire the people we need?

When a department is short a significant number of personnel, many agencies do not and/or cannot do less, so they just do worse. Things move slower, fundamental and long-range improvements do not take place as planned and many times managers and employees start skipping steps altogether. Overtime goes up, productivity goes down, unit costs rise and stress sets in.

As one analyst put it, “some number of vacancies is inevitable.” Any system with normal turnover will have vacancies. There are also many potential unplanned vacancies such as leaves of absence, extended sick leave and/or on-the-job injuries, retirement, etc.; these can add more vacancies, sometimes for long periods.

Small agencies such as Hollister and San Benito County simply do not have the reserve manpower to shuffle around especially if a large proportion of positions are perpetually vacant. At some point every organization can become so shorthanded it is ineffective; that tipping point is both closer and harder to see when vacant positions become the operating standard.

Good management means either working to fill the perpetual vacancies so the necessary personnel and flexibility are available or removing the surplus empty positions from the budget. Perpetually-vacant positions in normal or robust economic times make no sense.

Marty Richman

Born and raised in Brooklyn, NY, Marty (Martin G.) spent his teen years in northern New Jersey. He served more than 22 years on active military duty, mostly in Europe, and is a retired U.S. Army Chief Warrant Officer 4, Nuclear Weapons Technical Officer. Marty then worked 25 years in various engineering and management positions in the electronics and energetic materials industries supporting the communications, computer, aerospace, defense and automotive sectors. He is a graduate, summa cum laude, from The College of Hard Knocks, among his numerous awards and accomplishments. He was a regular weekly Op/Ed columnist and feature writer for The Hollister Free Lance for seven years and a member of its editorial board for five years. Marty is a frequent commentator and contributor to BenitoLink on a wide variety of local, state, national and international subjects.   Marty was elected to represent the City of Hollister District 4 on the City Council in November, 2018. Marty and his wife, Joyce, have been residents of Hollister since 1996.