Memo to Jim Flaherty: Please don't make it harder to manage through this recession

At Thornley Fallis and 76design, our payroll costs routinely run at about 60% of our topline revenues. That means that 60 cents of every dollar we receive for our services goes directly to create jobs. Good jobs. Jobs that employ creative people. Jobs that employ knowledge workers. Workers who help companies – and government – use the new social media to create communities of interest, accelerate knowledge sharing and get closer to the people they serve.

So, I was dismayed to read the following section in Finance Minister James Flaherty’s November 27 Economic Statement:

“There will be no free ride for anyone else in government either.

“We are directing government ministers and deputy ministers from every single department and agency of the Government to rein in their spending on travel, hospitality, conferences, exchanges and professional services.

“This includes polling, consultants and external legal services.”

Consulting. That’s me and my industry. The government contracts with knowledge workers as consultants. So, are we about to be on the chopping block? Does Minister Flaherty think that we are some kind of bureaucratic boondoggle?

When I read Finance Minister Flaherty’s statement, I fear that he and the government are failing to see the value of the economic activity our industry generates.

Clearly, he doesn’t understand:

  • the economic efficiency of our industry in creating jobs,
  • how important government is to our industry as one of the largest communicators in the country,
  • how communicating with Canadians to restore confidence is essential to the economic recovery, and
  • how government spending on communications not only is part of the solution in getting past the recession panic, but will also enable our industry to maintain employment levels.

Does Minister Flaherty understand that if he takes a broadsword to consulting contracts, he will be killing jobs – lots of jobs – at a time when we should be trying to sustain employment?

The Department of Finance announced last Thursday that it is conducting online consultations in advance of the January 26 budget.

This is my submission.

Mr. Flaherty, please don’t pull the rug out from under knowledge workers with one hand while with the other you are seeking to build up infrastructure.

Yes, please do invest in extending broadband Internet access so that more people can have access to the benefits of the Net. (And while you’re at it, please encourage innovation by supporting net neutrality.)

But while you are pouring dollars into building roads, bridges, buildings and bandwidth, please don’t undercut the knowledge workers whom you are counting on to use that infrastructure to create jobs in the future.

People like me are trying to preserve jobs for knowledge workers.

We aren’t getting any free ride. We help government to connect with Canadians. And we also help you to listen to what Canadians are saying. We are also very efficient at creating jobs. Jobs right here in Canada.

We count on you and our government to be wise and to legislate in the public interest. So, please take a closer look at small business and industries like mine before you act. I think you’ll find that it makes sense to provide us with stability, not the back of your hand.

And if you provide us with a stable environment, I’m sure you’ll find that we do our part. And isn’t that really how we’ll get through the recession? If everyone does their part?

  • It’s an interesting time. A time when physical jobs are more valued than mental jobs.

    To get out of the recession, governments are bragging about massive infrastructure projects. Hammer and nail type things that don’t require much more than working limbs and two legs to stand on.

    In a time of economic downturn, the government needs a fancy “see what we did” photo op at the opening of a new bridge or highway or tunnel to prove they’re on the problem.

    The things created by knowledge are just as valuable to society, but they’re not as visible.

    The “see what we did” photo op doesnt play so well if all you do is create an efficient way of spreading a message, or streamline a backend, or make the e-commerce one less click.

    I agree with you on this Joe, but the government needs things they can show people.

  • Hi Joe,

    Although I appreciate that as a consultant you don’t want to lose revenue, as a provincial government employee myself, I don’t mind any government using restraint.

    What you don’t mention is that governments already have their own communication departments. So it’s not like the Feds will stop communicating to the public. In theory, they already have good people in place.

    Flaherty also mentioned cutting back on external legal services. That doesn’t mean they will stop using lawyers. They will just stick to using their own lawyers.

    Consultants almost always cost more than employees. This is fine when there’s lots of money in the coffers. When there isn’t, it’s time for any business to reprioritize.

    I understand your point about the government needing to support knowledge workers to help support the economy. However, the general public has always been harsh on a government supporting “soft” skills and tasks, especially when the economy is suffering. Furthermore, the government can’t justify to the public why programs are being cut and still spend money on polls, consultants, etc. The optics are bad.

  • Over the weekend I encountered this article on UK local council spending on ‘external communications.’ That would include web sites, emails and other outreach to the general public, mailings, announcements sent out over newswires….

    Unless my math is very wrong, the ‘outrageous’ total comes to 7 pounds per person. As I said in my blog post on the subject, what wouldn’t I give to have local government attempting to keep me informed of the things I need to know about my own community. The optics are always bad when we don’t succeed in honestly putting things into perspective.

  • Joe,
    right on the money. I don’t know how we can do it, but somehow skilled “tech” workers need to get much more highly valued by governments.

    There was no suggestions of “bailouts” to the “tech wreck” of the early 2000’s when thousands of people were laid off. It seems that if you’re smart enough to get educated, then you’re smart enough to fend for yourself when times get tough.

    It’s a real good point that the “infrastructure” should include aspects of on-line and broadband. It will continue to pave the way for Canada to be an economic leader in the “new economy”.

    We should also take a look at what “manufacturing” infrastructure should also be included. Considering that with automated manufacturing the direct labour costs are a small portion, we should be able to compete with the anyone (including and especially China). The tech jobs to create the lean, profitable manufacturing tools, programs, equipment could/should/would be real Canadian jobs too.

    So yup, time to get looking at the big picture and realize that “Infrastructure” is a whole lot more than bridges, sewers and blacktop.