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Hidden Cost Implications: What’s the impact?

Gregg Gordon, author of the book Lean Labor and blog Lean Labor Strategies, recently attended (and presented at) the Maryland Leadership Forum on April 17th.  He came back with an interesting perspective on what he observed.  Take a look at his blog titled: Government employees are making good labor decisions, they just don’t see the whole picture, and get a first hand look at some the challenges, particularly around how labor decisions now impact pension costs later.

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K12, ACA, and Outsourcing – Part 2 of a 2 part series

Written by Adam Brittain…
It is not terribly difficult to see why outsourcing has come into consideration as an ACA strategy. Most Districts are not budgeted to offer healthcare to their substitute (or variable hour) workforce, and the Affordable Care Act would require offering healthcare to all such employees working more than 30 hours per week (or pay a penalty). For those districts keeping substitutes in-house, a commonly discussed approach is to limit substitutes to three or four days of work per week. This allows principals and teachers to continue to exercise more control over who gets an assignment, and allows the district to more directly control the employer-employee relationship.
Districts choosing to cut hours for substitutes to ensure they remain under the 30 hour mark must now consider the impact to their students of losing consistent long term substitutes or popular substitutes who have learned the culture and approach of a specific school. As an example, if a popular sub has reached their weekly or monthly limit, the district will have to find another.
This raises the question of continuity in the classroom- if a teacher is out for an extended stretch and substitutes are restricted to three days of work per week- how will student achievement be affected* by not only the teacher’s absence but also the cycling in and out of substitutes throughout that absence? This same logic could apply to those outsourcing- what happens if an agency cannot give a school their preferred substitute?
*In the Journal EDUCATIONAL EVALUATION AND POLICY ANALYSIS June 2008 vol. 30 no. 2 181-200, Harvard University authors Miller, Murnane, and Willett estimate “10 additional days of teacher absence reduce mathematics achievement of fourth-grade students by 3.2% of a standard deviation”.
Districts should avoid applying “either/or” logic when choosing between outsourcing versus keeping the status quo and simply cutting hours across the board. *The concept of avoiding “either/or” decisions is explored in depth in the book Decisive, by Chip and Dan Heath, and it focuses on widening options when making decisions.
For example, districts looking to keep their substitutes and variable hour employees in-house might consider an absence management strategy in addition to restricting hours, as improved absence management tracking often improves overall attendance- which supports greater classroom continuity and reduces the need for substitutes. Also, rather than cutting all substitute hours, could districts use talent management tracking to help identify the portion of variable hour employees who excel at their trade, and absorb the cost of benefits for this smaller group of employees while limiting hours for the rest?
While several ACA strategies may be employed, including better workforce management as a whole or completely outsourcing- which factors will weigh most heavily in the hearts and minds of the decision makers in your communities? How can your district avoid an “either/or” decision and leverage several strategies to help bring ACA compliance within reach of a limited budget?

K12, ACA, and Outsourcing- Part 1 of a 2 part series

Today’s guest blogger is Adam Brittain.  Adam received his MPA from the University of Colorado-Denver, where he helped launch the state’s flagship welfare fraud program. A former auditor, Adam now serves the public sector as a Principal Consultant at Kronos.

Some school districts are considering outsourcing all teachers’ assistants, substitutes, and other variable hour employees to staffing firms or agencies (agency), while others are just considering outsourcing substitutes. Such controversial measures are being considered as a potential strategy to comply with a controversial law.
Support for outsourcing is mostly financial- for what is advertised as a fraction of the cost of offering benefits, paying penalties, or both- districts can pay a fee to an agency who will furnish substitutes. However, there is a student achievement angle as well, whereby districts choosing to limit substitute hours may see a dip in student achievement when a long-term sub is needed (but their hours are capped). Substitute teacher agencies are outwardly focused on supporting district educational plans and maintaining continuity of instruction of the classroom.
Opposition to such plans varies- but appears to be largely rooted in the human realm, rather than the financial. Variable hour employees are used to getting a specific type of benefit package from the districts they work in, which usually includes more than just the opportunity to purchase health insurance (think retirement, time off when the schools are closed, and working for the same employer as everyone else in the building). Principals may be wondering how easy it will be to obtain a qualified resource when they need it, or whether they will be able to continue to access their favorite substitutes once they have ceded control to an outside firm.
There is, however, more to it than that. Under common-law rules, which have been developed to determine whether an employer-employee relationship exists, employees provided by agencies have largely been considered to be employees of the agency, and not the client. Would school districts be willing to cede their right to personally discharge a substitute who performs unsatisfactorily? The substitute would technically be an employee of the agency and not the school. What if the district wishes to engage a substitute over a long period of time to cover maternity leave? Since duration of relationship is a factor in common-law determination, would this be a consideration for long term substitute assignments?
Also, districts moving to an agency model solely to avoid the implications of ACA may find this strategy backfires, as the district may ultimately be considered the employer (and not the agency), which would land them back at square one.
What are the pros and cons to this approach? How is your district acting to avoid a gut-check reaction to the new regulatory landscape?

Ever thank that teacher who influenced your public sector career?

Question: Who inspired you to get into public service?
I know for some what brought them into the role is its importance of making a difference and having a lasting impression on the community in which they live and serve. But who inspires this kind of spirit? Teachers, that’s who. They are leaders who impress upon us to do good with our lives. They are mentors who take us under their wing and educate us to be a better person. They are advocates of our ability to change the world.
View this short video clip and thank a teacher today.