Customer-Centric Reforms for the Employment Development Department

August 19, 2020

The economic fallout caused by the COVID-19 pandemic is unprecedented. Nearly one-third of California workers have filed for unemployment benefits through the state’s Employment Development Department since mid-March, yet outdated technology, poor customer service, and chronic inefficiencies are preventing many Californians from receiving the financial help they desperately need. In the 2015 study where the Commission explored solutions to these and similar challenges plaguing state government, our Chairman Pedro Nava commented, “California state government has fallen behind, embarrassingly behind, on providing its customers – Californians – excellent experiences in their interactions with government.” Correcting these inefficiencies at the Employment Development Department provides California with an important opportunity to demonstrate the value of a customer-centric government.

Currently, over one million unemployment claims have yet to be processed by the Employment Development Department, some of which were filed in March and April. And Sharon Hilliard, the head of the department, recently told legislators that it could take up to 20 weeks to process any additional unemployment benefits from the federal government. The department’s 30-year-old technology system is cited as the primary reason for these delays despite years-long efforts to modernize the system. Since 2010, the Employment Development Department has spent $161 million on numerous contracts with consulting firm Deloitte to improve its electronic systems to more quickly process claims, and, most recently, expand its call center. Yet project delays and rising costs over the years have plagued these efforts, leaving the department struggling to assist the millions of Californians now seeking its assistance.

To make matters worse, reports of poor customer service from Employment Development Department representatives are rampant. A concerning amount of Californians have called the department thousands of times seeking updates on their unemployment claims with little success. Unemployed workers have taken to online platforms such as Twitter and Reddit to vent frustrations and share tips on getting through to department representatives. And those who finally do get through to a representative are sometimes met with rude treatment, conflicting information, or temporary workers lacking adequate training to resolve issues. One man said he called the department 600 to 700 times a day for weeks before finally speaking to a representative, who simply told him to learn how to manage money better and hung up. It was only after emailing California Labor Secretary Julie Su that he was able to receive assistance on his claim. Despite hiring thousands of temporary workers and redirecting hundreds of current state workers to help the department, the situation has not improved.

These problems, unfortunately, are not new. The Employment Development Department has been struggling to provide efficient services for years. Technology problems caused delays in processing unemployment claims for hundreds of thousands of Californians back in 2009 and again in 2013. The California State Auditor reported in 2012 that millions of callers were experiencing difficulties reaching department representatives despite recent upgrades to the phone system. The next year, funding cuts caused the department to reduce the operating hours of its call center to just four hours per day, an inconvenient reality that has continued ever since. Staffed by unemployment benefit experts, this key call center is well-equipped to clarify specific questions about the benefits process and resolve issues with filed claims, information that temporary workers in the department’s newly expanded, general call centers are unable to provide.

In response to these chronic inefficiencies hampering a crucial aspect of California’s response to the COVID-19 pandemic, Governor Newsom recently announced the creation of an Employment Development Department Strike Team to develop a plan to “transform the customer experience of applying for and receiving unemployment benefits.” The Little Hoover Commission recommended such a transformation of the customer experience across the whole of state government in its 2015 report, A Customer-Centric Upgrade For California Government. Lessons from that work provide a helpful blueprint for reform:

First, the Commission recommended that California emulate the customer-centric cultures of Fortune 500 companies and federal agencies by designating and empowering customer champions within the state enterprise. Appointing a statewide Chief Customer Officer, and designees within each agency, will ensure leadership and accountability for consistently evaluating the quality of customer experiences.

Second, top innovators need to be recruited into state service. Whether through fellowships or in-house consultancy teams, the state must think creatively to build attractive environments in which technologists, engineers, and designers can thrive. Once hired, these innovators can work alongside customer officers to identify priority projects for improving program efficiency and customer experiences in offices throughout California.

And third, California must actively work to cultivate and maintain a customer-centric culture across its many agencies. Empowering public servants to share their ideas and suggestions for improving customer services, seeking feedback from Californians on their interactions with government programs, and providing succinct and culturally competent communications to the public are just a few of the many actions California should take to create a more responsive system of government.   

It isn’t difficult to imagine how different the Employment Development Department might be today if it actively prioritized and responded to the needs of Californians, especially in times of economic distress such as this. A customer officer within the department could result in the accountability necessary to ensure that customers’ needs inform improvements to the unemployment benefit process, while the expertise of top innovators could troubleshoot solutions to the department’s aging technology system and redesign a more efficient application process. The Commission urges policymakers to consider these customer-centric reforms as they seek to improve Californians’ experiences with their government.

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