• on May 26th, 2014 in Labor | 7 comments

    Offering workplace benefits such as health and retirement programs and paid vacations is a well established way to attract and retain talented workers. But the structure of these offerings has been changing in the public and private sectors over the past 20 to 30 years for several reasons, including rising pension debts; a more mobile workforce; and a move towards simplified administration of benefits.

    Employers have been looking to shed excessive pension expenses and give workers more control over their own retirement programs. Increasingly, private, local, and state employers are moving away from defined benefits plans that generally pay a guaranteed sum based on wages and years of service. They are increasingly favoring defined contribution plans, such as the 401(k) plan, a pretax fund built on employee and employer contributions. Meanwhile, retirement benefits plans for federal workers, including postal employees, have generally remained unchanged since the Federal Employees Retirement System was enacted in 1987.

    Similarly, the U.S. Postal Service’s leave benefits have stayed primarily the same for decades. Days off are organized into categories – annual, personal, sick, military (if applicable), and federal holiday – and the rate of leave accrual depends on the category. When taking leave, a postal employee has to indicate which category the leave falls into. But many companies are moving toward fewer categories, such as just vacation days and sick days. This simplified approach cuts down on administrative costs.

    As the Postal Service looks for ways to tighten its belt, it is considering changes in benefits, such as a new retirement program for future workers. But it is in a bit of a Catch-22. It is required to offer compensation and benefits that are comparable to those in the private sector, but it cannot change its benefits programs unilaterally, due to legal requirements and union agreements.

    At the request of the Postal Service, we issued two white papers that benchmarked its benefit programs against those of several comparable organizations. Specifically, we looked at retirement benefits and leave policies. We found many similarities in benefit offerings, but key differences, too. For example, retirement expenses make up a larger portion of total benefits for the Postal Service than for the other organizations we studied. Also, postal employees can carry over 55 or more days of annual leave each leave year and an unlimited number of sick days. But the other organizations had far more restrictive leave carryover.

    Share your thoughts or experiences on leave programs that consolidate all days off into one comprehensive plan. Might such a program for postal employees offer flexible benefits while reducing costs? Or does the current system work well? What changes, if any, are needed to the Postal Service’s retirement plans? 

  • on Mar 24th, 2014 in Labor | 7 comments

    When long-term, experienced workers leave companies, they take their know-how with them. It’s called “brain drain” and it happens at organizations of all sizes and kinds, most notably companies with a large number of baby boomers getting ready to retire and industries that are restructuring. The newspaper industry comes to mind, as does manufacturing, as does the U.S. Postal Service.

    Since 2004, the Postal Service has reduced the number of career employees by more than 200,000, primarily through attrition, early retirement incentives, and some contractual changes. This is part of its ongoing effort to right-size its workforce to better match the number of employees with a declining workload. Many of those who left were seasoned workers who took with them a wealth of experience and knowledge essential to running a vast and complex organization.

    Given that nearly 31 percent of current employees are eligible to retire now, and Postmaster General Patrick Donahoe plans to shrink the workforce by 10,000 positions in fiscal year 2015, it’s likely this brain drain will continue for a number of years. Is the Postal Service adequately prepared for this loss of institutional knowledge? What more could it do to ensure it has a comprehensive approach to collect, maintain and disseminate this information?

    Our recent audit, Postal Service Knowledge Management Process, looked at the subject and determined the Postal Service could do more. Notably, by mimicking the best practices of eight large organizations we reviewed, including the General Services Administration and Walmart, the Postal Service would be able to ensure important knowledge and expertise stay within the organization. These practices include conducting exit interviews aimed at gleaning key information; designating a knowledge management officer; developing knowledge maps that offer visual representations of the organization’s pockets of expertise; and conducting mentor-based training.

    Are you concerned about the flight of human capital from the Postal Service? Do you think it should do more to preserve the knowledge of its most experienced workers? What are your ideas for the Postal Service to retain and share valuable knowledge and expertise? 

  • on Sep 2nd, 2013 in Labor | 4 comments

    For many Americans, Labor Day marks the end of summer and a day to grill hot dogs or enjoy the pool one last time before it closes for the season. Labor Day’s history is often overlooked. It was started to salute the social and economic achievement of American workers, and to pay tribute to the contributions workers have made to the strength and prosperity of the country.

    The Labor Department says on its website: “The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pay tribute on Labor Day to the creator of so much of the nation's strength, freedom, and leadership — the American worker.”

    So we take the opportunity in our annual Labor Day blog to salute all the postal workers who keep the mail moving and ensure the Postal Service fulfills its mission of binding the nation together. We also note the Postal Service is the foundation that supports a larger $1 trillion mailing industry. Keeping the mail moving means another 8.4 million workers are enjoying Labor Day as well. Among the other industries that rely on a healthy Postal Service are the paper and printing industries and their suppliers, direct mail design, fulfillment companies, private delivery services, and mail management departments across all industries.

    While the Postal Service is the engine that drives a major industry, it is also often an important part of the local community. The annual Stamp Out Hunger food drive is so effective because of the Postal Service’s presence in every community. Postal workers are often the first people back at work in areas affected by a natural disaster, providing critical deliveries of medicine and checks even when power is out and roads are blocked. Every year, postal employees around the country risk their own safety to save the lives of customers they serve. In 2012, the Postal Service recognized 313 of these employee heroes. The Carrier Alert program relies on the presence and awareness of letter carriers to monitor the well-being of elderly and disabled customers. And so many other deeds go unheralded.

    So on this Labor Day we salute not only America’s postal workers, but the American workforce.

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