Operating Expenses for Policy Teams

As part of his company’s annual budgeting process, a friend was asked whether he wanted to request an Operating Expense (OpEx) budget to hire consultants or non-enforcement contractors for his policy team. This post is a sanitized summary of the spending categories I suggest he consider.

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Before we start, I need to note some important caveats.

1. Operating Expenses vary significantly across industries and companies

Each organization has its preferred approach. To understand what your organization does, talk to the people who run the company’s annual budgeting process. You’ll usually find them in teams with names like Corporate Finance, Strategic Planning, Financial Planning and Analysis, or Strategy & Operations.

2. This post is not intended to be an exhaustive list that applies to all teams.

Instead, I attempt to capture the operating expense categories of particular interest to policy teams.

3. This post does not go in-depth on several Operating Expense spending categories

While I mention these expense categories in this section, I will not be going into more detail on these items in this post because:

• they are big-ticket items that deserve a separate discussion, such as vendor contracts to outsource enforcement work; or 
• they are run-of-the-mill expenses that you’ll see in the budgets of most teams (and which you’ll have in yours). Examples include:
  • user licenses or annual subscriptions for content management systems, office productivity software, and off-the-shelf tooling suites; 
  • team swag and events, some of which may require travel. These include annual planning meetings, all-hands events, and team-building activities.
  • team education, training, and conferences (note that each policy area will have its own specific set of conferences and events); 
  • interns, fellows, research assistants, and the like; 
  • memberships to professional organizations;  
  • subscriptions to journals, publications, newsletters, and research; 
  • salaries and wages, and other OpEx arising from employing people; 
  • costs arising from stakeholder engagement, which may require travel for meetings and educational outreach with advisory boards, government representatives, and civil society stakeholders; and 
  • corporate donations and/or PR-related spending.

Questions to Consider

Use these questions as a checklist after you’ve crafted your budget. I share some thoughts about each category below.

1. Do you have non-core work that is better performed by an outside services provider? 
2. What specialized software or services does your team use to work more efficiently, effectively, and safely? 
3. Do you need to quickly ramp up on a new subject area, business model, or jurisdiction or fill a short-term gap in your team’s capacity?
4. What employee resilience and wellness programs do you provide?
5. Do you need to take additional precautions for your team?
6. Will you require the services of an independent auditor?
7. Are there Management and HR Advisory services you would benefit from having on retainer?  

Categories of Operating Expenses

1. Do you have non-core work that is better performed by an outside services provider? 

I use the term “non-core work” to refer to work outside your team’s core expertise, but for which many professional service providers are available at a reasonable cost. Someone on your team could likely do a passable job in-house at a basic level, but assigning the task to employees would occupy time that’s better spent doing more important, policy-specific work. 

Some possibilities to consider:

• Media Monitoring. While you can expect the company’s press team to track mentions of your company, your policy team will be interested in specific keywords, people, or events that happen on and off your platform or service. Rather than asking someone on the team to do this media monitoring labor, consider retaining the services of a company specializing in this work. You may also want to add a clause in your service agreements that allows you to request “deep dives” or “briefings” into specific subjects when major events or incidents occur so your team can get up to speed on a hot topic quickly. 
• Localization. If you serve the world, you will translate the material you publish (policies, help center forms, transparency reports, etc.) into languages your company considers high priority. Localization sounds straightforward on the surface, and you may be tempted to ask a French team member to translate a document into la langue française, for instance. The job of localizing your content consistently across multiple languages, documents, and formats, however, requires discipline and nuance and the use and maintenance of an integrated glossary, especially if your materials have legal implications (e.g., terms of service and compliance reports submitted to the government). 

2. What specialized software or services does your team use to work more efficiently, effectively, and safely? 

Due to the nature of your team’s work, you may require specialized software or services designed to meet the team’s specific needs. 

Some examples:

• Platforms for secure and anonymous online investigations. Analysts who need to study and investigate sensitive topics, personalities, or sites may run afoul of company IT policies and geographic IP restrictions or potentially expose the corporate network to malware and other intrusion if they use their company-issued desktop or laptop to access such sites directly. Consider issuing separate computers or devices that team members will use solely for investigative purposes. Some firms also provide secure and isolated platforms for your team to use during investigations. 
• Specialized APIs and technology to augment the team’s detection and enforcement tools. As the content moderation industry has matured, companies have emerged to address specific technical needs, such as the proactive detection of violative content through machine learning models. Whether it’s through an Application Programming Interface (API), a Software-as-a-Service (SaaS) setup, or a self-hosted on-premises instance, these solutions will incur both an initial set-up cost and an annual operating and maintenance cost.
• Specialized monitoring services and tools. Given the increased interest in and risk of influence operations as well as misinformation and disinformation campaigns, you may find value in supplementing your threat detection capabilities through partnerships and agreements with firms that specialize in these areas. Note that if you decide to use a product or technology solution, you’ll need to: (a) understand any technical integration requirements, (b) get a handle on the annual maintenance costs, and (c) have staff who can review the output, such as alerts and trends, to take full advantage of its capabilities. 
• Contract engineering resources to build and maintain systems and tools to support policy, investigation, and enforcement work. It’s not unusual for internal Engineering, Data Science, and Research and Development (R&D) teams to have more work than they can handle. If your tooling needs are frequently unmet due to insufficient in-house technical capacity, it may be appropriate to get some outside help. Work with your counterparts in these teams to see how you can jointly build a compelling business case for contract engineering resources to focus on your engineering needs. 

3. Do you need to quickly ramp up on a new subject area, business model, or jurisdiction or fill a short-term gap in your team’s capacity? 

For many legitimate reasons, your team may lack subject matter expertise in new areas, and you won’t always get approval to hire additional full-time employees (FTEs) to address this gap. In other cases, you may have a pressing need for expertise or staff augmentation in the short term—one that you don’t expect to be an ongoing or recurring need that would justify hiring a permanent employee.  

Some scenarios to consider:

• Jump-starting a new content policy area. All policy teams will need to take on new policy areas as the content on their site or service evolves, and new challenges emerge or become more pressing. Rather than assigning someone to spend weeks researching a new policy area, consider retaining the services of an established expert in the field on a short-term contract to help you craft policies, conduct knowledge transfer to your team, and propose initial enforcement options. This arrangement is typically a fixed-bid consulting engagement with a pre-agreed timeframe, cost, and list of deliverables.  
• Introducing a new revenue model. If your company plans to launch a product or service that introduces a new line of business or a new revenue model that’s based on user content, consider retaining the services of someone with deep policy experience in this area via a short-term advisory contract. A new revenue model introduces a different set of risks and enforcement challenges and may require entirely new policies covering revenue-generating and organic user content. Similar considerations exist when you launch an online marketplace that takes a fee or a percentage of every sale or purchase.
• Entering a new country or jurisdiction. If you’re looking to expand into a new country or jurisdiction, you’ll want to ensure that your content policies and data retention policies meet the regulatory obligations of your industry in that location. In this scenario, consider retaining the services of local, in-country experts in your policy area. Note that this need is particularly pressing if you have revenue–generating policies targeting heavily regulated industries.
• Addressing short-term capacity gaps. Not all short-term gaps can be planned for, but some, such as parental leaves and sabbaticals, are usually known several months in advance. If you have sufficient notice, consider allocating some budget to augment your staff on a short-term basis through fixed-term contracts or consulting engagements. For critical functions that require specialized skills, consider re-assigning an existing employee in an adjacent position to step into the vacant role (it can be a growth opportunity for them), and assigning the contractor to cover for the re-assigned employee. Good capacity planning will also account for a number of vacations and sick days for every member of the team.  

4. What employee resilience and wellness programs do you provide your team? 

When your team deals with troubling content, you have a moral obligation to do right by your team members. In jurisdictions where a duty of care exists, employers are legally required to take reasonable precautions to protect their employees from any foreseeable risk of injury, disease, or death. Employers face the risk of lawsuits, reputational damage, difficulties with hiring, and high employee turnover when they fail to support employees who deal with troubling content as part of their jobs. 

In light of the above, you’ll want an employee wellness and resilience program that’s tailored specifically to employees who perform this work. At a bare minimum, consider a combination of voluntary group and individual therapy sessions from qualified and vetted providers that are made available at no cost to employees, with the appropriate privacy safeguards in place. 

5. Do you need to take additional precautions for your team? 

Due to the access that team members have to private customer or user data and because your team’s role can occasionally be controversial, you may need to take additional precautions.  For example:

• Additional online privacy protections for team members. Individuals who work in this field, especially those with public-facing roles, can become the targets of disgruntled customers and bad actors. Employees in sensitive roles who maintain online professional profiles can also be targeted. Help protect your team by allocating some budget to avail of services that request the removal of personal information from data brokers and search engines to help reduce the risk of doxing and threats. Include information about these services when you onboard new team members, and send an annual reminder.
• Background checks as part of the hiring process: the more sensitive the role, the more extensive the check. Team members with elevated admin rights or access to systems that store private customer data create potential internal risks when they can be coerced, threatened, bribed, or otherwise compromised. Depending on the size and maturity of your company, you may rely on an internal corporate security function that performs this work, retain the services of a firm that specializes in background checks, or use a combination of both.   

6. Will you require the services of an independent auditor? 

As a matter of good business practice—and, in some cases, for regulatory compliance reasons— your team may need to retain the services of an independent auditor. 

Some possibilities include:

• Auditing vendors of outsourced enforcement operations. As part of your contract with vendors of outsourced operations, include a clause that entitles you to audit your vendor’s performance and ensure that contractual obligations around quality, training, volumes, response times, and employee wellness are being met.
• Auditing clients and partners for compliance with data privacy obligations and usage restrictions. In cases where your company provides data to clients or partners (especially where you charge a fee to access such data), include a stipulation in your contracts that gives you the right to trigger an audit by an independent party, and then allocate a budget for the cost of a handful of such audits. As new regulations are passed, they may require you to audit your partners and clients to confirm compliance with your (and their own) stated data collection, usage, and privacy practices. 

7. Are there Management and HR Advisory services you would benefit from having on retainer?

Depending on the maturity of your company and team and on the major initiatives you have planned for the coming year, you may benefit from retaining advisory services that support your leadership team. Some examples:

• Coaching and training for fast-rising leaders and managers. Many policy teams promote from within to recognize exceptional performance, retain talent, and preserve institutional knowledge. Such a practice, however, can lead to a management team that is heavy on subject matter expertise but light on the skills and experience needed to manage a growing team that works across locations, time zones, and borders. As the team grows, the planning and coordination overhead likewise increases. To better support the development of your leaders, consider retaining an executive coach and investing in management training programs that target the specific management shortfalls and challenges you’ve observed.  
• Compensation Surveys. People inevitably wonder if they could earn more money doing the same work elsewhere. If you often hear this sentiment, you may want to talk to your Human Resources team about joining a compensation survey offered by a firm specializing in your industry. The results will either justify adjusting your pay scales or assure you that your compensation packages for different job levels and locations remain competitive.   
• Major reorganizations. When your team’s organizational structure gets in the way of effective decision-making, clear lines of ownership and accountability, and fast-paced execution, it may be time to revisit the structure. Whether you need to downsize, reallocate headcount, or refine the team’s structure after a rapid expansion, consider getting advice and help from organizational consultants who can help you avoid common pitfalls and complete these changes as smoothly as possible. 

Some parting thoughts

This post focuses on operating expense categories and is intended to serve as a checklist you use after you’ve crafted your budget. It is not meant to be your starting point. 

Instead, your company will have an annual strategy to develop, launch, and improve products and services or enter new markets. This strategy is your ideal starting point.

As part of your team’s planning, you will review the company strategy and assess how things will change next year compared to this year. You will figure out the work needed to launch these products safely, enable these new business models, and comply with local laws in new markets. You’ll craft and revise policies and update enforcement guidelines. You will keep the lights on for existing work, address known threats and gaps, and determine how best to comply with new regulations.

And yes, you will very reluctantly identify the list of things you simply don’t have the resources to do and then have painful conversations to set realistic expectations with your stakeholders.

Only at this point—when you know your team’s strategy and priorities—should your plans be translated into budget requests.

When you set your team’s strategy, you effectively make hard choices about where to concentrate your limited resources. It’s impossible to do everything, but a well-crafted strategy will make it easier to explain to stakeholders why you will prioritize some things over others and allocate the dollars accordingly.  

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_{Author’s note: my sincere thanks go to BC, JC, AD, WN, IR, YR, and CW. This post is more useful and comprehensive because of their feedback. Any errors and omissions are mine.}