In recent years, states have placed increasing pressure on school districts to produce more with less, with a focus on reducing non-classroom costs. While the majority of expenditures focus on the classroom, a significant amount of money is spent on support functions including administration, business operations, human resources, transportation, food services, facilities maintenance, information technology, supplies and other non-instructional functions.
As school districts struggle to make ends meet, many are considering shared services as a method to reduce costs while maintaining or enhancing services is becoming a popular solution. Shared services, defined as collaborating on delivering one or more services like payroll or human resources, allows districts to maintain educational independence while using a more efficient means of providing necessary district functions.
Shared services models can increase the collective purchasing power, which lets districts buy most commodities at a lower price.
Implementing a shared services model can help your district:
- Reduce costs & gain economies of scale
Sharing services with another district, a consortium of districts, or a regional education unit typically results in a direct cost reduction (for example, two districts “sharing” the costs of a shared technology director). In addition, shared services models can increase the collective purchasing power, which lets districts buy most commodities at a lower price.
- Standardize processes
As many non-instructional services are not core to the educational mission, many educational leaders may not have expertise to implement best practices for these functions. A shared services model not only reduces each district’s costs but also allows each to benefit from the innovation of peer districts. Even good processes can be made more efficient from a standardized, best-practice approach.
- Attract & retain highly qualified employees
Due to financial constraints, school districts are often challenged to have deep resources to serve district needs. Through a shared services model, districts can achieve greater specialization and, as a result, develop a deeper bench strength of resources to serve the district. As an example, a regional service agency that provides business office services to multiple districts may hire fewer staff with deep expertise to serve those districts, thereby providing more resources than if each district were running its own full business office.
- Share the risk
With variations in needs for certain types of services, a shared services model can help spread out risk and allow your district to better “weather the storm” of funding, enrollment, or even environmental challenges, without having to make reactive moves due to concerns of too many or too few personnel. A shared services model can smooth out peaks and valleys that a single district is likely to experience, allowing time for the district to make proactive, strategic decisions.
- Community support for education
The shared services concept is a popular and expanding cost-cutting strategy for communities. As districts look for ways to have as many of their resources as possible in the classroom, shared services models should be fully discussed and analyzed to see whether they make sense for your community.
To be effective, the shared services operating model must be well thought out and carefully planned and implemented. We’ll have a future article on the critical success factors associated with shared services.