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Too many non-union managers, not union members, drive up Alberta government costs

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The late Peter Drucker, management guru

Did you know that last year there was one manager for every 5.4 people employed directly by the Alberta government?

Think about that ratio the next time you're tempted to blame unions for the cost of providing public services in this province, as we have been conditioned to do by 40 years of neo-conservative brainwashing that assails unions and lauds the dubious benefits of "free markets."

Throughout the private and public sectors in other North American jurisdictions a more normal ratio would be about one manager for every 10 employees. When Bill Clinton was president of the United States, he made an effort to increase the manager-to-staff ratio in the U.S. public service to one to 14. Oft-quoted management guru Tom Peters suggests that an ideal ratio is about one to 25.

But here in Alberta, in addition to that group of approximately 19,500 unionized civil servants directly employed by Alberta's provincial government in 2010, there were 4,437 direct government employees officially designated non-union "managers" in the middle of that year. The resulting management-to-employee ratio was thus about one manager for every 5.4 civil servants!

The impacts on any enterprise of having too many managers and too many layers of management are well known. A number of the symptoms found in a variety of sources on management practice include:

-    Higher costs
-    Lower productivity
-    Slower decision making
-    Muddled communications
-    More paperwork
-    More meetings
-    Bad staff morale
-    Lower employee satisfaction

The opposite side of the equation is worth considering too. The late Peter Drucker, another well-known dispenser of management advice, argued that having more staff per manager leads to improved organizational performance -- and results in better management too.

The impacts on the costs of government in Alberta are particularly severe, since non-union managers are not only paid more, they receive more generous benefits, more generous pensions and more generous perks.

Moreover, as alert readers will recall, back in 2009 the matter of $44 million in "achievement bonuses" -- read "free money" -- for civil service managers in Alberta became a political problem for the government of then-premier Ed Stelmach. It was revealed that between 2006 and 2009, nearly $160 million of taxpayers' contributions were paid to civil service managers -- who were already much better compensated than their union counterparts.

Indeed, even those sums did not reflect the true cost of the achievement bonus program, since it extended back to the late 1990s under Premier Ralph Klein, who pushed the idea that the civil service should be run in a similar manner to the private sector. This was to be done, I guess, to get the same lousy results. Because your average rank-and-file Alberta public employee is well educated and motivated, she doesn't really require a lot of supervision to do a good job.

After the brouhaha in 2009, the bonuses were suspended for a time. It seems likely they will return, if they haven't already, driving costs up even more.

Arguably, the ratio is actually somewhat worse than these numbers alone suggest because there were another 2,337 government of Alberta employees in mid-2010 who were excluded from union membership -- some for legitimate reasons, and some for reasons that are not so legitimate.

These included close to 600 IT staffers, whose exclusion from union membership makes no logical sense, and 275 members of the personal staffs of senior managers, whose exclusion can be more readily understood. Other categories of employees excluded from union membership include people working in personnel policies and programs, employees of the Legislative Assembly, personal staff of cabinet ministers, labour relations officers, staff of the Lieutenant Governor and the like.

Include these people, and you get a ratio of one non-union employee for every 3.9 members of the provincial public employees' union.

Of course, some of those 4,437 managers may manage non-union employees, and the number of unionized employees fluctuates seasonally and over time -- though not that much. Without being privy to the government's latest private information, we can't really know with perfect accuracy, but it's safe to say that such variables would not make much difference in the final ratios.

We need to remember numbers like these when we hear the likes of Catherine Swift, president of the so-called Canadian Federation of Independent Business (which, as has been noted in this space before, consistently works against the healthy and flourishing middle-class communities that make independent businesses prosper), saying, "what would be ideal is getting rid of public-sector unions entirely."

After all, right-wing bloviators, "think tanks," media and politicians have all become sophisticated at getting middle-class citizens to blame public employees and their unions for the level of taxes required to pay for the cost of government.

To a significant degree, this is a conjuring trick, in which the illusionists (all the usual suspects noted above) direct the attention of their audience to the modest salaries and benefits of unionized public workers so that they aren't looking at the elephant on the stage -- the vastly more expensive tax dodges, giveaways and subsidies available to the wealthy, not to mention the incredibly low royalties charged for resources that belong to us all.

Still, there's some truth to the popular notion that we could help preserve our quality public services at lower cost through better allocation of resources -- especially since we know the number of unionized Alberta government employees has barely changed since Klein's destructive privatization spree in the mid-1990s.

A good place to start finding ways to use our resources better might be by looking at the excessive numbers and layers of unproductive and expensive non-union managers in the public service.

Instead, Premier Alison Redford's emphasis has been once again to talk about looking for services that can be privatized -- a guarantee both of higher costs in the long run and deteriorating, profit-driven, unaccountable public services in the shorter term.

She would do better to focus her famously steely resolve on culling the glut of overpriced managers from the civil service.

This post also appears on David Climenhaga's blog, Alberta Diary.

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