Attrition, VERA, Retirement Incentives and RIF's

The Postal News blog corrected an impression of mine that the Postal Service may be changing its approach to reducing the workforce.
  
Donahoe told the Washington Post’s Ed O’Keefe that the 7,500 positions being eliminated would be cut by attrition. Eliminating an entire area office requires the use of RIF rules- it’s nothing new. Those rules were followed in all of the previous area and district consolidations, and don’t automatically mean that any employees will actually be involuntarily separated from the USPS. 

My confusion reflects the difficulty of understanding the options available to the Postal Service to quickly reduce the workforce.  Pat Donahoe's statement clearly is consistent is with the strategy that the Postal Service had used under PMG Jack Potter to rightsize its workforce.   In addition the correction reminded me that all options for reducing the workforce have costs and that the options that can reduce the workforce the fastest have the highest costs.   


The lowest costs relate to reducing the workforce via attrition as this method may result in a mismatch between the individuals that leave their jobs at the Postal Service and the work that continues to be required.   The Postal Service must then cover training, transfer and other transition costs to fill those positions that continue to be required from those employees that continue to be on the payroll.

VERA adds costs associated with running an early retirement program and may result in higher levels of transfer and training costs to the extent that a VERA increases attrition.    

Finally offering retirement incentives and and RIF's further increase the cost of reducing the workforce because of the expense of the incentives or the severance payments involved.

To the extent that the Postal Service continues to use attrition to reduce the workforce, Postal management will likely to be challenged by Congress, the GAO, the Postal Regulatory Commission and mailers who have focused on Postal Service cost management in the past to explain why they are not using more rapid means to reduce the workforce than attrition.   When that occurs, the Postal Service needs to be able to explain the difference in cost of reducing its workforce using each of its four options as well as why it was to cost effective to use a more rapid method to match the postal workforce to the Postal Service's actual needs.