US Postal Service 2010 Annual Report Download - page 14

12 2010 Annual Report United States Postal Service
PROGRESS AGAINST THE PLAN
OUR CHECKLIST
Workforce
Over the past few years we have made
great progress in aligning our workforce
to the lower mail volumes we are expe-
riencing. We have been fortunate to be able to
do so almost entirely through the orderly attrition
of retiring workers, rather than through a disrup-
tive process of lay-offs.
Over 39,000 career employees retired or
departed on their own last year, and we are well
positioned through attrition to reduce the size
of our workforce at rates that match the pro-
jected future decline in mail volumes. Based on
current trends we project that nearly 300,000
Postal Service career employees will become
eligible to retire in the coming decade – each
year we expect approximately fi ve percent of
employees will elect to retire.
However, reducing total headcount is only
one part of the equation. Marketplace demands
require that we have a more fl exible workforce
that allows for a greater ability to reposition and
reassign employees. This is especially important
as we consolidate our networks of mail pro-
cessing facilities and realign our retail footprint.
On September 1, we began labor contract
negotiations with the largest of our four unions,
the American Postal Workers Union, AFL-CIO
(APWU) with the goal of reaching agreement on
actions to increase the Postal Service’s work-
force fl exibility and reduce costs. Similar nego-
tiations with the National Rural Letter Carriers’
Association (NRCLA) began on September 13.
Our past record of working successfully with
labor to together to help transform the Postal
Service provides encouragement that we will
jointly reach agreement on these important
goals.
While we prefer in all cases to manage these
changes through collective bargaining, under
existing law arbitration is always a possibility.
Our fi rst priority in any arbitration ruling must
always be the fi nancial health of the Postal Ser-
vice and the affordability of postal products for
the customers we serve. As such, we have also
asked Congress to require that any arbitrator
take into account our fi nancial condition before
making any decision.
As we move forward, our ultimate goal is
to ensure we have the right people in the right
places at the right times to deliver the products
and services our customers need, where and
when they need them. We are hopeful that our
current discussions with our labor partners will
lead us toward the realization of this critical goal.
Finally, we never for a minute forget that our
employees are the Postal Service. They deliver
for America with commitment, dedication and
purpose, and it is to their credit that the Postal
Service has met extraordinary standards of
performance during the past decade, including
last year. ■
CHALLENGE
The rigidity of our
current workforce
structure leaves us
little fl exibility to
adapt to changing
circumstances and
economic downturns.
SOLUTION
A more fl exible
workforce that allows
for a greater ability to
reposition and reassign
employees would allow
us to better respond to
marketplace demands.
Workforce Costs Are Expected to
Rise Between 2010 and 2020
Percent increase per year
Source: McKinsey analysis, Global Insight
1.3–2.5
2.0–4.0
4.7–5.2
Infl ation
(CPI at 1.9%)
wages
workers
compensation
health insurance
premiums
Greater fl exibility in repositioning employees
will drive major productivity and service
improvements in the coming decade.