Efficiency at City Hall
All large organizations, whether private or government, tend to grow their bureaucracy over time. Policies and procedures become more prevalent and complex, innovation is stifled, and the ratio of support personnel to front-line service providers increases. Private sector organizations periodically conduct efficiency reviews with the aim to create more cost-efficient policies and procedures and organizational structures. Governments also do efficiency reviews but these tend to be very rare.
One way to assess the efficiency of an organization is to look at the percentage of employees undertaking support functions such as HR, Finance, IT and Supply Chain. These ratios can then be compared to external benchmarks to determine whether the organization is efficient.
Here is a snapshot of two of the City of Calgary’s support services. Keep in mind that the City supports approximately 16,000 employees (including the Calgary Police Service).
Human Resources (HR) employs approximately 300 employees at a cost of $37M per year. This translates into 1 HR employee for every 50 employees. A private sector company of this size would employ approximately 100 HR employees.
Information Technology (IT) employs approximately 450 employees at a cost of $60M per year. This translates into 1 IT employee for every 35 employees. A private sector company of this size would employ approximately 150 IT employees.
A few short years ago, the City conducted a review of its organizational structure (called Rethink to Thrive) but this review did not look at cost efficiency. A cost efficiency review, preferably by an outside consulting firm, is long overdue. The potential for more efficient delivery of services at lower cost is significant.