With looming budget cuts, the constant demand to do more with less, and the trickle-down effect of budget deficits at the state and federal levels, small governments are struggling to meet constituent demands. When resources are scarce, governments often apply budget cuts to programs that lack direct public value—training, human resources (HR), and other administrative overhead. Today’s fiscal reality forces government administrators to take a hard look at spending and focus only on services that contribute directly to the strategic development of the organization. But can cutting important functions like HR cost your government more in the long run?
A city government with a population of 4,000 recently hired Baker Tilly’s State and Local Government consulting team to assist with their HR difficulties. In this particular situation, the government lacked a dedicated HR function and, as a result, HR responsibilities became a component of city manager’s duties. Over time, this arrangement caused concern among the board, management, and staff that there was not enough direct HR experience on hand. The city encountered the following challenges:
Similar to many state and local governments, with this client’s tight budget adding additional staff was a challenging proposition. However, there are multiple methods to achieve a dedicated HR function. The following are three alternative options Baker Tilly consultants presented on this client engagement:
The recommendations Baker Tilly consultants made to this client reflected current fiscal and political realities of the city’s specific situation. We further evaluated the organization’s risk and the likeliness of legal action without dedicated HR expertise on hand. While not having access to specialized HR expertise may help your organization’s budget in the short term, the costs associated with increased risk exposure due to regulatory noncompliance and potential legal action could be unpredictable.
For more information on this topic, or to learn how Baker Tilly state and local government specialists can help, contact our team.