Potential Solution(s)
Some stakeholders have proposed options for reducing the Postal Service’s labor costs. While the OIG is not recommending or endorsing any course of action, those options include:
■ Increasing the share of pre-career employees: Pre-career employees are less expensive than career employees because they receive lower salaries and fewer benefits. Therefore, increasing their proportion of the workforce could significantly reduce the Postal Service’s labor costs. This could be achieved by hiring new employees at the pre-career level but ending the current practice of automatically converting them to career status after a certain amount of time on the job. However, the Postal Service has struggled to recruit and retain pre-career employees, so increasing the share of pre-career employees could potentially lead to a more unstable workforce.
■ Reducing headcount: The Postal Service could reduce its total headcount through various means including a hiring freeze, voluntary early retirement program (VERA), reduction-in-force (RIF), or layoffs, where contractually permitted.11 In FY 2025, roughly 79,000 employees across the four major postal unions were eligible to retire, and an additional 89,000 will be eligible within the next five years. Currently, many of the Postal Service’s CBAs significantly limit the agency’s ability to conduct layoffs. Additionally, the legal requirement to deliver six days per week to every address may limit the extent to which USPS can reduce its workforce.
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