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December 1, 2008

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AROUND THE INDUSTRY

Saving Money by Hiring Drivers?
By Allison Hewitt
Special to Passenger Transport


It seems that at every recent transit industry gathering, a major topic of conversation revolves around the question of how to meet rapidly rising demand with shrinking revenues.  The good news of increased ridership comes directly with the difficult news of the impact of such demand on existing capacity.  And the bottom line in all of this is, literally, our bottom line – with many of us looking for ways to cut costs.

Given that context, it might seem like an odd time to ask: “Is your agency fully staffed with drivers?”  Before I elaborate, let me provide some background.
In Florida, an initiative passed last year dictated rollbacks in the basic property tax rate and a doubling of the homestead exemption. For an agency that has historically received two-thirds of its operating budget from the property tax, this presented a serious problem.  Meanwhile, ridership – growing at seven percent a year for the past four years – turned upward even more sharply in the past six months.  Something had to give. 

Under the leadership of CEO David Armijo, the board of the Hillsborough Area Regional Transit Authority (HART) took an aggressive cost-cutting approach rather than cutting needed service.  Since the largest slice of our budget is operator wages and benefits, we looked for ways to lower those costs without cutting either.  One such opportunity, and one that might have implications for other transit operators around the country, was to reduce overtime.
HART began by examining the reasons for, and costs of, employee overtime.  We were looking for how to manage costs while maintaining as much service as possible.  One such factor was high turnover, which had caused the average number of operators to fall below optimum levels.  That resulted in higher levels of scheduled – often mandatory – overtime, which next led to increased absenteeism, which in turn resulted in greater use of “extra board” operators – which again increased overtime payments.  Being understaffed was leading HART into a vicious cycle in which trying to save money had just the opposite result.

HART determined that staffing at the full 100 percent level might actually save money, a conclusion that would seem to fly in the face of conventional wisdom. So what did we do to fix it? And did we actually save money by hiring more people?
Two years ago, we held our first on-site job fair, a big change for HART.  Previously we had always relied on word-of-mouth, newspaper ads, and walk-up applicants.  Using that method, we generally heard from unemployed people with spotty work histories.  This job fair, held deliberately on a Saturday, attracted mostly people who were already working but looking for a better job with benefits.  We received a significant number of applicants, screened them all on the spot, and offered them jobs if they qualified.  That was Step One.

David Armijo then instituted Step Two, which was simply the commitment that HART would hire a sufficient number of operators to cover all shifts, vacations, anticipated illnesses, and scheduling variations.  Full staffing has allowed us to reduce split shifts, virtually eliminate forced overtime, and reduce the number of chargeable incidents.  Further, because our bus operators are less stressed, we have received fewer customer complaints.
Did we save money? Yes. Even taking into account additional salaries and benefits, HART projects a savings of approximately $750,000 in the first year. To promote further improvements in employee attendance, HART is partnering with union stewards to provide counseling to employees with absenteeism problems and developing an incentive program to be funded by the savings from reduced overtime.  The savings also translated into more service, which led to yet more hiring. We added 14 operators and five mechanics last March and plan to hire 27 more in FY 09.

As a transit agency board member, what did I learn from this? If you interact with the rank and file of your agency (and I encourage you to do so), you may find that the folks behind the wheel of the bus can often identify problems quite clearly. Several of our operators had come to me concerned about being forced to work overtime. It was making them unhappy and affecting how they performed their jobs.

Because unhappy employees begat unhappy customers, my role as a board member was to work with agency management and come up with a solution to the problem.
An engaged board of directors, working with a solutions-oriented agency leader, can arrive at innovative approaches to fixing some of the agencies’ problems. Even if it means doing things that may seem contrary – like hiring people to save money. 

The author is Interim Vice-Chair-HART (Hillsborough Area Regional Transit) and Secretary to the APTA Transit Board Member Committee.


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