Governments considering a hiring freeze would do well to take a look at a report that was discussed at a Pennsylvania law enforcement and judiciary committee meeting this week. The report looked at overtime in the Department of Corrections. It found that a hiring freeze, which was put in place in 2014, added about $4.6 million in costs to Corrections spending in Fiscal Year 2015 and $9.1 million in costs in FY 2016.
Here are the details provided for 2015: With 300 fewer new hires, Pennsylvania cut back on training costs by $15.3 million: That’s a tidy savings. But here’s the rest of the story: With the freeze in place, overtime costs escalated by $19.9 million. (Net cost: $4.6 million). The report noted that overtime also added to ultimate pension costs for retiring corrections officers as it increased final salaries, which are part of the formula used to calculate future pension payouts.
The report, which was produced by Pennsylvania’s well-respected Legislative Budget and Finance Committee had several recommendations. The first: “Avoid imposing hiring freezes on security staff.”
One more note on this topic. Last spring, we did a Governing column about the positive and negative effects of overtime. There’s no question that it can be used constructively for an unexpected event (such as a blizzard) and is often regarded as a plus by cash-strapped employees. But on the downside, excessive overtime can add to an employee’s level of stress, lead to burnout and compromise performance. That’s especially true for corrections officers, police, firefighters and others whose work in tension-filled, potentially dangerous, settings.