The N.C. Division of Workforce Solutions, the state agency that provides assistance to job seekers at local offices across the state, laid off 353 workers in recent months as part of an ongoing, extensive overhaul.
The overhaul was triggered by a reduction of about 25 percent in state and federal funding, or nearly $25 million. The bulk of the shortfall is another consequence of the new state law that ended federal extended benefits for unemployed workers, reduced the maximum unemployment benefits a laid-off worker can receive by roughly one-third, and lowered the maximum duration of benefits for workers who lost their jobs beginning July 1.
The cutbacks are coming as the state’s unemployment rate, although declining, remains high at 8.7 percent. In August, just five states had higher unemployment rates than North Carolina.
Discouraged jobless workers who aren’t actively seeking work aren’t counted as unemployed. So while “the unemployment rate may have gone down, it isn’t necessarily because more people are working,” said John Quinterno of South by North Strategies, a Chapel Hill firm specializing in economic and social policy.
Quinterno, who said that North Carolina’s job-search assistance generally has been held in high regard, fears that the agency will end up “doing less with less” as a result of the cutbacks despite its best efforts.
But Roger Shackleford, who runs Workforce Solutions, said the agency plans to do more with less.
“Our goal is to get better at customer service,” Shackleford said in an interview.
Shackleford admits, however, that the current transition period is a challenge.
“I think our local offices are going to have to adjust to these cutbacks,” he said. “We are getting calls from our local managers: ‘We need more staff.’”
Offices open fewer days
Between May and the end of September, the agency laid off 353 temporary employees at its 89 local offices – commonly known as the unemployment office – who had been hired beginning in 2009 to help handle the surge of unemployed workers arising from the recession. That represented a 39 percent reduction; 550 workers remain.
The cutbacks were spread out to lessen the impact, Shackleford said.
To date, the agency also has reorganized 16 of its local offices – nearly one-sixth of the total – to further cut costs, and Shackleford anticipates that another 30 to 35 offices will be reorganized.
One-fourth of the offices reorganized so far – in Bryson City, Sparta, Spruce Pine and Tarboro – are now open just two days a week. Previously they were open Monday through Friday.
Five other reorganized offices are staffed by Workforce employees only on certain days, with other state employees who toil on-site working on federally funded training assistance programs filling in during their absence.
“We’ve begun to do a lot of cross-training,” Shackleford said, adding that the “core services” offered by the employee groups overlap.
Another initiative for the reorganized offices is cutting lease costs – an effort that includes sharing offices with other government agencies, renegotiating leases or moving to cheaper space.
“Wherever we reorganized a local office, we didn’t leave town,” Shackleford recently told a legislative oversight committee. “The goal is to leave some level of services.”
Reduced federal funding, partially as a result of sequestration, contributed to the agency’s nearly $25 million funding shortfall. But the great majority – about $19.5 million – is a result of the elimination of state funding.
For years, North Carolina has been supplementing federal funding of the work performed by the local Workforce offices with state unemployment taxes paid by employers. But this year’s makeover of the state’s unemployment system – championed by the N.C. Chamber and pushed through the legislature by the Republican leadership over the objections of Democrats and advocates for the poor – halted that practice.
The driving force behind the unemployment makeover was accelerating payback of the state’s debt to the federal government, a debt that at one time reached $2.6 billion. That money was borrowed to cover state-funded unemployment benefits after unemployment soared beginning in 2008.
The new law barred using state unemployment taxes to subsidize the local Workforce offices, instead directing that those funds go toward paying off the debt.
After the merger
The Division of Workforce Solutions was created under Gov. Bev Perdue in November 2011 when the Employment Security Commission was absorbed by the Department of Commerce. The new division incorporated job-search assistance that ESC had provided along with the administration of federally funded job training programs that already were handled by the Commerce Department.
“The reorganization (of the local offices) is part of a broader strategy we have been implementing since the merger,” Shackleford said. “When we merged in 2011, we set forth on a course of broad changes to improve customer service.”
Services offered by the Workforce offices include resume preparation, career guidance and skills assessment. The offices also provide free computers and Internet access and specialized job-search help for veterans, older workers, migrant farm workers and others.
Shackleford told legislators that merging the services previously offered by different agencies will help the Workforce offices be more cost-effective.
“We are moving to what we call an integrated service delivery model,” he said. “We have wasted a lot of dollars over the years by being siloed. You could be in one of our facilities and have four or five different (programs) really working independently.
“We think it compensates for less staff.”
Another new wrinkle designed to improve efficiency is NCWorks Online, a new website designed to connect job seekers with employers that are hiring. It was launched Aug. 5.
Commerce Department spokesman Josh Ellis hailed it as “a quantum leap” over the website it replaced, NC JobConnector. State officials also are encouraged by the early response.
NCWorks was visited by 94,389 people looking for work in August, up from 25,926 who used the old software in July. And through Oct. 4 it has attracted 1,624 new employers who have posted job openings for free; they joined 7,944 businesses who already were using the service.
Unlike NC JobConnector, the new site also pulls in jobs posted elsewhere on the Internet – on company websites or by the likes of Monster.com. And it also has other functions, such as inputting your skills in order to find jobs you’re qualified for or checking out wage and employment prospects for various careers.
Shackleford said NCWorks will save an estimated $800,000 per year in information technology costs.
Quinterno frets that the agency may rely too heavily on NCWorks.
“One of the things the Employment Security in particular always provided was a lot of hands-on attention to people,” he said. “Are they essentially moving to a situation where people are going to be on their own?”
But Shackleford said that since the onset of the recession the state is serving an “expanded customer base” that has different needs.
That includes “more highly educated, white-collar folks … who can navigate getting re-employed on their own” and don’t even want to come into the local offices – but can make good use of the tools available via NCWorks, he said.
At least one legislator would like to see the agency eliminate even more employees.
“If you can drop 353 people out and still function,” Sen. Tommy Tucker, a Republican from Union County, said of the staff cuts implemented at the agency, “I suggest you can go deeper.”