Tuesday, September 8, 2009

Moving to Cleveland

Recent news stories have highlighted some of the absurd results that current labor contract provisions and civil service rules create as the Postal Service deals with workforce management today.
  • The East Hampton Star reported the experience of two postal employees that were transferred from Manhattan to the far reaches of Long Island. The story was picked up by the New York Times and New York Post, which made it a national story. The commute that these employees face is not uncommon for businesses that have union agreements that guarantee jobs during a period of declining demand. Employees with guaranteed jobs at the Penn Central could be transferred from Delaware to Ohio if the jobs close to home disappeared. Similarly airline employees regularly are transferred from base to base when shrinking demand bumps an employee from a base closer to home.

  • The Federal Times provided a detailed account of the practice placing employees in "standby rooms" until they can be assigned. The story notes that 11,000 can be placed in this position at any time or about 4.5% of the clerks and mailhandlers the Postal Service employees. The article illustrates the absurdity of union rules that prevent the Postal Service from using this standby time to train employees to be more productive at what they now do, or for other jobs that may become available in the future.

  • The Akron Beacon Journal illustrated the challenge that the early retirement incentives will have for workforce planning in northern Ohio. Cleveland has 1,100 employees eligible for retirement incentives out of 1,700 working in the Cleveland processing plant. That's right. Sixty-five percent of the workers in Cleveland are eligible to retire. Another 550 are eligible in Akron and Canton. Similar figures likely exist throughout the Northeast and Midwest creating the possibility that the Postal Service could find itself in October needing employees in this region to fill vacancies created by early retirements.
The three stories combined raise the possibility of significant movement of employees once eligible employees take advantage of early retirement incentives. While some employees will see long commutes, like what happened in New York, others may be offered paid transfers to locations further away. As it is unlikely that Florida postal facilities will have retirement rates anywhere near what will be experienced in northern Ohio, the Postal Service may find it cheaper to pay to move an employee from Key West to Cleveland than to pay for an excess employee in Key West and a new employee in Cleveland. (Can you imagine making that move between November and January?)

Combined the articles raise two important issues as it relates to workforce planning.
  • Why aren't lay-offs used to reduce the workforce?
  • Why doesn't the Postal Service have more part-time jobs?
Why aren't lay-offs used to reduce the workforce? All of the articles note the roadblocks that the union agreements place on layoffs. Employees with six-years of employment have protections against layoffs outside of a more rigorous process. What these articles miss is the roadblocks that the civil-service RIF process place on rightsizing staff and the up-front costs that any workforce reduction causes.

Layoffs within the Postal Service must occur with the guidelines of civil service. This allows employees to bump employees with lower seniority, including seniority related to preferred classes of employees. The employees that are laid off are eligible for severance pay and unemployment benefits that could total far more than the early retirement incentives that the Postal Service is now offering. Finally, the civil service layoff of RIF process is time consuming and fraught with procedural land mines that can delay the reduction in staff or add costs to the process.

The early-retirement incentives that the Postal Service is now offering is a lower cost and more quickly implemented solution but not without its own challenges. The Cleveland example illustrates that the Postal Service will have challenges in some locations where potential retirements could create staffing challenges. The Postal Service has already noted the $450 million in cost for employee incentives. Additional costs will come from training new and existing employees and possible paid transfers to facilities that will be short staff after the retirements.

The Postal Service is not alone in using early retirement incentives as a preferred option for reducing the workforce, especially when the reduction has to be substantial. Similar incentives were offered to employees of GM, Chrysler and FedEx.

Why doesn't the Postal Service have more part-time jobs? One of the key highlights of the Federal Times article is a description of what is happening in Key West, FL. "Standby time, for now, is largely confined to mail processing facilities — though it is beginning to spread to retail post offices. The three post offices in Key West, Fla., employ 27 people. But under a schedule recently drafted by postal supervisors, 15 of them would spend at least part of their week on standby time." Here the issue is the labor agreement that limits the number of part-time clerk jobs. As noted in a previous post, the APWU contract limits part-time employees in a district to 2.5% of employees. While Key West may conduct some mail processing, most of the activity will involve window service with significant peak periods of customer demand. Most retail employers would use part-timers with regular schedules to deal with peak demand issues but the APWU contract does not allow for hiring a significant number of part-time retail clerks. Even the provisions for part-time/flexible did not work as the mail business needs part-time employees on regular schedules.

Layoff procedures and part-time jobs will likely be key issues negotiated in the next agreement with the APWU. Pressure from current employees give APWU leadership little incentive to back away from provisions in existing agreements on these subjects. Acceptance of changes by union leadership only if they are either imposed as part of an arbitrated contract agreement or if Congress demands that the parties negotiate changes as one of the conditions for relaxing retirement payment schedules and raising loan limits. The first possibility leaves leadership with clean hands. The second one will give them the opportunity of negotiating a seat at the table in deciding the future of the Postal Service and postal service jobs.


joe said...

they could be trained if management put them on training time...why not? because putting them on stand by doesn't hurt the projected work hours...thereby keeping management bonus pay in effect..that's the biggest problem bonus pay and to many managers..ups has about 1 for 70 post office 1 for 15..someone report the real facts please

Anonymous said...

Management has put people on standby even when there is work to be done. This is being done so the Post Office can sell their agenda. The one thing they aren't doing so getting rid of the non productive high paying management positions. I would like to see an independent study on how much savings would be produced by doing this.

Anonymous said...

They are putting them on "Stand By" to show an arbitrator these folks are not needed. The USPS will go after labor costs like never before. The news has been full of stories like these letting folks know how much USPS hands are tied by the current contracts.

The next round of negotiations is going to be brutal.

Coleen said...

As a retired postal employee I can tell you no matter how you slice it, the USPS needs new management from the PMG on down. The system is BROKEN. All the management care about is their bonuses, and make really stupid decisions based only on that. You can fix all the rest, but if the current management is left in place, it will all be for naught. They have the attitude that they need to get rid of craft, while maintaining the same number of management. STUPID! Time to clean house and CUT THE FAT!!!!!

Anonymous said...

The writer of this article said, "why doesn't the Post Office have more part-time jobs?..."
My question is, why doesn't the Post Office has LESS management? There are always 2 if not 3 managers in our office managing 15 employees. Someone needs to follow each manager around all day and find out what they are doing and why they are working here. It is so wasteful!

Anonymous said...

Coleen, I agree with you %100. This is what I have been telling fellow co-workers for quite some time now. This PMG was in my opinion, was placed in office with one primary goal, and that was to privatize the postal service. The present condition of the economy is just a tool to further their agenda. The postal Management has been systematically dismantelling the postal service for years.Why would you elliminate a vast portion of your core business by handing it over to private companies.They are giving away our retail services and trying to break down our Bulk mail services, which may I remind you have surpassed the first class mail in volume over the pass few years. This PMG is free hearted in destroying all the actual workers jobs who are actually doing all work, while padding managements pockets with bonuses and perks. come on PMG $800,000 give me a break. And if our mail voulme is falling so fast, why are we still spending all of this outrageous money on new processing systems that we don't keep more that 3 to 5 years. Spending untold millions on new equipment and the training of the mechanics and ET's. The LSM lasted for over 30yrs and was still effective up until the day that it was fazed out.I would think that Lockheed Martin, Siemiens, Martin Marrietta, and the Giulianni group would really like to thank the stupidity of postal Management for dumping untold millions of dollars into their laps.

Clerk in MO said...

Time to get rid of Management, they are the reason the Post Office is in such bad shape. They make stupid decisions all the time. Where I'm at the Plant Manager got sent to KCMO and theirs took his place ( temp ) so obviously money is being wasted there on hotels etc. The one that came hasn't done anything productive. I asked for him to fix one small thing, and nothing. If you can't fix the little things you are not going to fix the big things. KCMO is consistant in sending mail to our plant with the mail in the tray facing the wrong direction. There should be an SOP that the mail faces the label. Not difficult! We have to send it out with the mail facing the label for the carriers, why can't KCMO send it out to us that way. About 75% of the time it's in the tray backwards. Or, even sometimes upside down. Come on people! I have noticed that those trays with the mail upside down are usually direct mailers. Have they not been told nobody reads it upside down? So why put it in the tray upside down. Sloppy work people, I've always said: Neatness counts. You might not get acknowledged for it, but you sure won't get criticized. It's time to put the pride back into the work, if you want to be sloppy, do it at home.

Anonymous said...

Why because its in the "Contract" stupid!!! And there is too much mail to process...no go back and tell your cronies that privatizing the post office wont work!!!

Anonymous said...

1. why did/do the 'mega-mailers' jump ship on the Postal Service?

2. do they still deserve a "preferred mailing rate"?