Tuesday, September 28, 2010

Outsourced Libraries?

Sunday there was a fascinating article in the NYT about a company called LSSI that now runs 14 libraries systems encompassing 63 locations, and for the first time they've taken over a library system that isn't (yet!) in dire financial straits in Santa Clarita, CA. The knee-jerk reaction is that this is horrible. People are being fired, and it's just horrid to have libraries be for-profit (no, they are not "private." They are still public libraries.) But as I was reading this article, I realized I have an interesting angle into this topic.

When I was in high school in the summers, I helped my father, an Economics professor, with a research project, on whether colleges and universities self-operated or contracted our their auxiliary services (dry cleaning, parking, day care, cafeteria, janitorial, bookstores, and so on.) At that time (early 90s) most were self-operating. I asked him about it recently, and he said now it would be so swayed towards contracted-out that it wouldn't be worth it to study this again. While in college, I worked at the Vanderbilt University Bookstore (where my father taught, not where I went to school.) I worked the customer service desk where, in addition to refunds and exchanges, I was in charge of class rings, Cross pens, diploma frames, graphic calculators, stereos (anything expensive that needed to be locked up), student employment, newspaper subscriptions, and anything else that didn't fall neatly into a category. (The picture with the brick wall and the trash can is the best picture I can find of the VU bookstore, which is in the building to the left.)

A year after I left the VU Bookstore, I went to work at Bookstar, a B&N. I was shocked. Physically the stores were roughly the same size. But managerially, they were worlds apart.

Bookstar had a store manager, two assistant managers, and two associate managers. That's five altogether. The store was open 9AM-11PM 7 days a week, and we always needed one manager on duty to cover 98 hours.

The Vanderbilt Bookstore had a manager in Customer Service, Gifts, Sundries, Office Supplies, Textbooks, General Books, a manager over the Cashwrap, and in EACH of these department there were about 4 assistant managers. The store had a Director, who had a Secretary, and the store had a Receptionist. There were two people (manager level) working the check cashing window, and 3 in Accounting. I think at the Vanderbilt Bookstore there were about 30 managers, and 5 hourly employees. It was open 8AM-5AM 5 days a week, only 40 hours. Whereas Bookstar had 5 managers and 40 hourly employees. Which store do you think was a better place to work? Which store do you think had higher payroll costs? Here's a hint: the answer is different to those two questions. Believe me, you do not want to be one of the 5 hourly employees. Funny how everyone thinks they're your boss.

The Vanderbilt Bookstore is now run by Follett. Am I sad about this? Not one bit. Did people lose their jobs? Yes. But some of them should have. There was a woman in Gifts who came back to customer service 2-3 times a week to ring up phoned in orders. I had to retrain her on the register every single time. For 3 years. "How do I get rid of the tax?" "You push the button that says 'Tax Exempt.'" "How do I get the total?" "You push the button marked 'Subtotal.'" This was not rocket surgery. And yet she made more than I did. And everyone was afraid to hire her. Why? Because she'd been there forever and might sue. Even though Tennessee is a "right to work" state (which means you don't even have to be told why you get fired.)

So, do I think contracting out is evil? Nope. Bad habits get entrenched. Without caps, annual salary raises can get ridiculous after just a few years. Someone does a good job and you want to reward them so you give them a promotion. Do that a few times over ten years, and you'll end up with 25 managers. It can be really hard for the current management to overhaul an operation without lawsuits and just really hurt feelings. This isn't the case for a private company that comes in.

Plus there are economies of scale. One way Bookstar could get away with only 5 managers was that 95% of the purchasing was done by Corporate in New Jersey. Our store didn't have to buy books, pay invoices, reconcile accounts, deal with payroll, or any of that. Were there occasional errors with things done remotely? Of course. But believe me, there were just as many local mistakes.

I love libraries (just signed up yesterday to start volunteering at mine), don't get me wrong. But right now it's time to get creative. For a lot of these systems, it's contract out or shut down, not contract out or keep going as they've been. Given those choices, I hope LSSI turns out to be as good at their job as Follett. As long as it keeps libraries open!


Lesa said...

I've always been a library girl-- hadn't heard of libraries contracting out but I also hope it helps keep the doors open!

Carin Siegfried said...

@Lesa, I agree on both counts! This made not be the best option, but it might be the only option for some districts. Sad but true!

Christy said...

Great post! I think the recent furor over LSSI has been overblown. I knew of the company before this article came out. I ran across them a couple of times, once when they were recruiting Masters of Library Science students for positions. Hopefully, the changes to management will help keep the libraries going in these hard times. Though I'm sure there are valid concerns, the knee-jerk demonizing of the company is uncalled for.

Anyway, thanks for going against the grain on this one. It was refreshing.

Andrew said...

If outsourcing libraries helps keep their doors open and is able to provide free books to more people, I'm all for it. While we should be careful not to allow too much corporate influence on the selection of the books made in libraries, having a library make a profit is not a bad idea, and might help revive many libraries that are in desperate need of funding.