Individual & Organizational Scarcity

The Relevance of Scarcity to Human Services

The concept of scarcity is fundamentally important in the Human Services system at the individual and organizational levels. Many people experience scarcity in their personal lives without having a specific name for the phenomenon or clear understanding of the consequences, yet it can lead to significantly negative results. In our experience working with a range of Human Services organizations, we believe that a similar process occurs when organizations are faced with scarcity of resources they consider important for their operations.

“Scarcity,” as defined in classical Economics, is the gap between limited resources and the wants or needs people have for those resources (Investopedia.com). If a person does not have limitless money or time, that person has choices to make, leading to opportunity cost (The loss of potential gain from other alternatives when one alternative is chosen). These are choices we make every day of our lives, but they become more salient when we are faced with shortages of resources we consider important to our health and security.

Individual Scarcity

In their 2013 book, Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan and Eldar Shafir define ‘scarcity’ as “having less than you feel you need.” The critical word in that definition is “feel.” And that is because scarcity is a subjective and relative experience for an individual. Mullainathan and Shafir’s work demonstrates that the impact of feeling like you have less than you need, whether it is time, money or any other resource in your life, turns out to be a very powerful feeling that can lead to some otherwise irrational behaviors.

When we feel we have less than we need, that feeling may be based in observable facts, but the feeling comes from our perception of the situation. It may not be easy, but since our perceptions are among the few things we have some control over, they are fundamental to working our way out of the cycle of scarcity.

Through awareness of our perceptions, we can take the first steps toward managing and preventing the effects of scarcity. Addressing the effects of scarcity is akin to any process of behavioral change. While the events that lead us to feel scarcity might be out of our control, much like natural disasters that can be counted on to appear periodically, individuals can develop tools and strategies to prepare for and mitigate the effects of a scarcity mindset when it occurs.

However, in order for an individual who has experienced chronic scarcity to become aware of and address the effects of scarcity, they will most likely need a supportive environment. The integral role that support systems play is true for all behavioral change, but it is especially important for individuals deep in the throes of scarcity. This is where human services organizations can be tremendously valuable in assisting people in the process of breaking the scarcity cycle.

Organizational Scarcity

If human services organizations are systems of people who may feel like they have less resources than they need to provide adequate services to their clients, feelings of scarcity manifest themselves much like they would for an individual. When tunneling occurs and bandwidth, cognitive capacity, executive control, and fluid intelligence are compromised within a human services organization, resources are likely to be inefficiently utilized. Just like, in the example above, when John became homeless because of a series of scarcity-influenced decisions, human services organizations can make decisions that are less than optimal.

Frequently, organizations feel like they could be more successful with more resources. This sense of having less than they feel they need can influence operations at every level, from the Board of Directors to administration to line staff. Whether the funding received is $1,000 or $100,000, if those resources are perceived as not sufficient to meet needs, a sense of scarcity can lead to a negative process that resembles the effects of scarcity for an individual.

Generally speaking, human services workers’ main goal is to help people stabilize and improve their life situations. This may mean working with clients to help them overcome barriers, achieve goals, change behaviors, coordinate referrals, and so much more. Human services workers provide significant emotional support, which requires fostering an interpersonal relationship with their clients and building rapport and trust. Human services professionals deal in the business of human lives. Their product is the service they provide to people. However, the effectiveness of this service is frequently dependent on how an organization copes with the effects of scarcity and manages its resources.

If perception is the key to understanding, preventing and mitigating scarcity effects for individuals, and if organizations show similar reactions to scarcity, perhaps there are related actions that organizations can take to understand, prevent and mitigate the effects of organizational scarcity.

Organizations are comprised of individuals, so it is not too surprising that they show similarities in the ways they are affected by scarcity.  Organizational awareness of how scarcity affects the clients served can become a primary driver for change. This awareness can advise the development of effective and efficient programs that may help prevent and mitigate the effects of scarcity when they occur.