1. RESHAPING THE WORKFORCE John R. Mularski July 30 – 31, 2003

2. Labor Relations Conference Managing complement is a key driver for our financial performance Future changes require that we put in place a sound complement management process now

3. Labor Relations Conference Why VER? - Why Now? Tool to Reshape Complement Challenges FY 2003 and Beyond Option that encourages voluntary movement

4. Labor Relations Conference Assessing Approximate Potential : – Who meets the age and service requirements for VER? – 58,000 APWU employees – 8,400 NPMHU – 7,600 supervisors

5. Labor Relations Conference Purpose of Meeting –Greater use and understanding of tools that are available –Making data driven decisions –Better Planning –Exploiting Attrition

6. Context and History Historical ability to manage growth Less success in static or downturn environment Complement growth, freeze, more growth cycle Sustained period of complement management

7. Total Career On Rolls Prior AP variance: -2,392 EPLY variance: -18,007

8. Repositioning Tools & Techniques We’ve Come A Long Way…….. –FY 02 Complement Reduction 22,954 –FY 03, YTD (AP 11) Complement Reduction 18,007 OVER 40,000! Over 40,000!

9. Repositioning Tools & Techniques No “magic pill” No “secret formula” Instead……… Combination of ALL the tools and ALL the techniques!

10. Repositioning Tools & Techniques How Was It Achieved? –Complement Coordinators –Complement Review Committees –Managed Conversions –Managed Hiring –WebCoins –Reassignment Plans –Learned From Others

11. Repositioning Tools & Techniques Additional Reshaping Tool (VERA) Voluntary Early Retirement Authority –Provides for voluntary employee movement –Provides complement optimization flexibility –Complement challenges remain in FY 03 and beyond

12. Repositioning Tools & Techniques Identify Excess Complement Operations Challenge Identify the positions that are excess Identify the placement opportunities Assess the FT/PTF ratios – complement mix

13. Repositioning Tools & Techniques Identify the Eligible HR Challenge Verify eligibility for an early retirement Significant workload which requires dedication of resources Errors are costly

14. Repositioning Tools & Techniques Staffing & Scheduling Issues –Repositioning and Reshaping within Labor Contract provisions –Managing the conversion process –Managing the hiring process –Reassignments

15. Repositioning Tools & Techniques Legal Issues –Legal obligations under voluntary early retirement authority –Avoiding challenges resulting from failure to follow VERA procedures

16. Repositioning Tools & Techniques Complement Management Tools –VERA Tracking –VERA Modeling –AIR (Automated Impact Report)

17. Repositioning Tools & Techniques Recap –VERA SOP/Timeline/Rules –VERA Modeling –Staffing & Scheduling Issues –Repositioning Legal Issues