Avoiding Negative Effects of Policy Changes

FAAA couple weeks ago, while facing a three-hour flight delay because of the sequester-induced FAA furloughs, I became interested in how the budget cuts were impacting air traffic controllers. I found a quote from a representative of the air traffic controllers’ union that listed the effects of the $600 million FAA cuts, including: cancellation of training, delays in modernization projects and increased overtime that could end up costing more than the savings associated with the furloughs.

This reminded me of instances I’ve experienced with corporations implementing workforce policies, such as employee headcount restrictions, or contingent worker tenure limits, resulting in unintended consequences that often limit or completely offset the expected benefits.

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For example, when an organization mandates employee headcount freezes without related controls in place to manage the number or cost of temporary workers, consulting engagementsor business process outsourcing solutions used, the company’s total costs often rise — not just in the short-run, but in the long-run as the increased size of the contingent workforce becomes the new normal even after the hiring freeze is lifted. In other cases, imposing a tenure limit for one category of the contingent workforce, temporary workers for example, results in a commensurate increase in other categories of contingent workers, such as project-based SOW engagements, that aren’t subject to the same policy. The cost of equivalent resources is often higher for these SOW engagements, purely based on the label they’re given.

Often, those implementing a new policy don’t foresee the consequences on the overall organization, as managers seek other ways to get work done within the ground rules established. When the policy zigs, they zag. This is an understandable but unfortunate “cause and effect” dynamic when the big picture isn’t fully considered. In other cases, those implementing the policy do foresee the unintended consequences, but feel powerless to address bigger picture organizational effects that cut across many different functions beyond their controllable boundaries.

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In either case, adding a formal step to the policy creation process can help mitigate these negative results. When drafting a workforce policy, be sure to brainstorm all of the possible effects, both positive and negative, that could result from the change. As with any brainstorming exercise, don’t immediately filter or prioritize the results until your list is exhausted. Then, note who has control over each of the listed effects (whether it’s a person or a function), and identify how either a modification to the draft policy, changes to existing policies, or the parallel creation of a secondary policy might help. Ideally, you’d work with a cross-functional team to create this list. If that’s not practical, consider asking colleagues to review your initial draft after it’s filtered and prioritized. Someone with different responsibilities and professional experiences can bring new thinking to the process. Then, when a draft policy is being reviewed by leadership prior to approval, they’ll be armed with a bigger picture perspective that can at least inform their final decision about whether to implement a new law of the land.

This post first appeared in Contingent Workforce Strategies 3.0, May 8, 2013.

Ben Walker

Ben Walker
Ben Walker is vice president of operations at Brightfield Strategies which consults with Fortune 500 companies on contingent workforce strategy initiatives.

Ben Walker

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