Recent USPS Hiring Practices Make No Sense

February 22, 2015

If you’ve seen the recent Dead Tree posting related to USPS’ hiring binge, it should cause you to ask, “Why would any company that is losing total volume each year and has supposedly (*see footnote) consolidated more than 300 facilities in the last couple years need to hire 125,000 new workers, regardless of whether they are full-time or non-career/casual?” They wouldn’t if they were accountable to a board of directors, shareholders and their customers.

It should be noted that total mail volume across all products is decreasing every year (was about 210 billion in 2007 and now is about 150 billion), but the USPS has a higher total headcount today than they did 2 years ago. The increase in parcel volume does not offset the loss of volume in all other classes.

Sure, we’d all love to be able to hire away and give everyone good paying, permanent jobs. That’s the American Way. But it’s not the way of the world today, particularly in the business of delivering printed products to consumers. We’re all doing more with less. If you can’t do that, you can’t survive. Unfortunately, that means jobs are being eliminated. No one is “entitled” to their jobs anymore – from the top executive to the shop-floor or office worker.

About 80% of the total costs for the Postal Service are attributed to labor. That number has not wavered noticeably for as long as I have been involved with postal issues, which is more than 30 years now. In a mature industry with declining volumes, more employees = more cost = higher prices. It’s a simple formula, and it is not sustainable. And you definitely don’t make up the difference by increasing prices (exigent surcharge) because you couldn’t adjust to the “new normal” … 8 years after it became the new normal!

So what’s the Postal Service to do? For full-time employment, maybe there needs to be a movement toward consolidating the 4 postal unions into 1 or 2, such as carriers and production. Has this ever been part of the USPS discussions with labor? One of the reasons for having to hire so many people is the inability to shift workers to open positions across different unions. We’ve heard that because the USPS has hired so many casual workers in the last few years, the training has not been sufficient. That has resulted in lower productivity, delivery problems, low morale and very high turnover. If experienced employees could be moved into those areas where more skilled bodies are needed (i.e., parcel processing and delivery), it would seem like many of those problems could be avoided.

Casual/part-time employees are the new normal for any manufacturing/production-related businesses today. So the USPS, with the support of its labor unions, has moved in a direction that parallels the rest of industry. However, integrating them into their jobs and responsibilities is a huge challenge. The sheer numbers that the Postal Service needs to hire creates a challenge that may not be overcome. Therefore, having the option of moving full-time, experienced workers into many of those positions as their jobs are eliminated, could prove valuable to the USPS and their labor unions in the long term.

Something needs to change, and everything needs to be on the table. I’m by no means a Human Resources expert and I didn’t stay at a Holiday Inn Express last night. But I do know that if the USPS can’t do what is needed to manage costs while improving service without greater than CPI price increases going forward, parcels might be the only thing that mail carriers will be delivering 10 years from now. That’s not what anyone wants.

*The USPS has now “repurposed” more than 150 facilities that were on the closed/consolidated list in Phase 1 Network Rationalization, and has designated them as cross-dock Hubs.