Introduction

Good morning. Today I would like to talk to you about our vision of where and how the Department of Energy is heading in managing its workforce. This subject is the bread and butter of management: aligning mission and people. Every management guru has the same basic formula for good management: set an objective; assign the task and completion date; commit the necessary resources and guidance; finally, provide feedback. The reason why everyone is gathered here today is because of a different first step in this management scheme: with the end of the Cold War, many of the Department of Energy's missions have changed dramatically in a very short time frame. Thus, although our workforce restructuring began in earnest several years ago, we must step up our efforts to configure the Department to meet the nation's needs as we approach the 21st century.

The Clinton Administration has certainly invested a great deal of effort in managing its workforce. Although the media reported heavily on President Clinton's statement of the "end of big government" in this January's State of the Union, it was not the first time he's said this. He has been promoting the need for a more responsive and smaller government since March of 1993 with the beginning of his campaign to reinvent the Federal government. Since then, the Federal government has experienced a net loss of 214,000 civil servants, while continuing to meet the needs of the American people. The size of the Federal government is now the smallest it has been since John F. Kennedy took the oath of President. And, as everyone in this auditorium knows, the Department of Energy has shared in its contributions toward a smaller and more productive Federal government.

To focus on the future of the Department's corporate health, I'd like to begin today by outlining our corporate approach to merging workforce planning and the workforce structure. Then, I'd like to discuss what we intend to do to achieve the right mix of skills and experience to meet our needs; and how we intend to move to that endpoint, efficiently and responsibly. Moving to an endpoint in this process of workforce restructuring implies an eventual end to the Department's Worker and Community Transition program, and so, finally in my remarks, I wish to touch on the importance of its existence until we get to that endpoint, and with your help, attempt to persuade the Congress of its legitimate and necessary role.

You've already heard me refer to several 'corporate' allusions. I am not mis-speaking. One of the underlying themes of this conference is the need for more complex-wide and Department-wide corporate thinking. That means more private-sector type efficiency in our operations, as well as the notion of corporate responsibility. However, behaving as a corporate unit has very real challenges for a government entity that is spread out over 30 states. This challenge simply places more of a premium on integrating the planning and restructuring of the Department's workforce. My feeling about workforce planning and restructuring is that everyone has a piece in this, and so it is in everyone's interest to participate. Indeed, the momentum has been building for some time now, and no one will win by not participating. Cooperation, now more than ever, will be required for the health of 'Corporate DOE.'

How We Arrived at the Current DOE Workforce Structure and Where We Need to Go

Let me talk of where we, as a corporate structure, are now and where we are heading. But before we talk about the current situation, it is wise to link current and past practices. So allow me to briefly review our past workforce hiring practices and link them to where we are now.

If we go back about twelve years, the DOE hired a lot of Defense Program contractors, because--let's be honest--we were making bombs as fast as we could, and rightly so. The Cold War was at its zenith, in terms of our workforce producing what the nation asked of us. As the weapons production need eased off, and the growing awareness of the Cold War's environmental legacy took root, we started hiring a lot of environmental clean-up personnel. But this new staff was in addition to, not instead of, the complex's production workforce. So the situation we faced in 1993 was an overstaffing of the Department, and we commenced to reduce employment levels. Thus far, we have about 25,000 prime contractor separations and about 5,000 sub-contractor separations. I am personally thankful that, in 1993 and 1994, that 80 percent of these separations were voluntary. And up to this point, these separations have been somewhat non-discriminate. By that I mean they took place without any sort of integrated, strategic planning of Departmental mission; we could simply cut the fat, "firm up", and be better off.

But now the Department has finished cutting most of the fat. We are down to muscle. We could use the metaphor of competing in the Decathlon here in this summer's Olympics. Now that we're down to muscle, we have to 'exercise carefully' to build up the right muscles for all the right events. If our training is done wrong, as in the past, we could end up doing well in one or two events, but miss the boat by not having the right fitness and muscle balance, and fail in the overall mission of maximizing performance in all of the Decathlon's events.

So what the Department needs to do now is move toward the right skill mix in our workforce in order for us to meet our critical missions--under the constraint of ever-tightening budgets. Using our current training regimen in the Decathlon analogy, we need to shift our focus perhaps from less shot-putting and pole-vaulting to more long-distance training. In other words, we still have some adjusting to do in our corporate structure, and the only means to get there is through workforce planning. The ultimate objective is getting to the most effective and critical balance of employment numbers and skill mix, experience and performance,-- and we have some hard work ahead of us.

Workforce Planning in DOE

What is workforce planning? First let me tell you what it isn't. It is not an arithmetic exercise, certainly not arbitrary reductions or additions, and especially not a knee-jerk reaction to a deus ex-machina budget. Workforce planning is a proactive, corporate approach for projecting Department-wide work force requirements on the basis of mission, budget estimates and workforce skills. The Department's needs during the Cold War--weapons production--were met by the "turnkey" M&O companies, which included workforce planning. In those times, we had a guaranteed budget, a direct and visceral mission, which in turn drove the workforce skill needs. Now, just as we have been working to revise our contracting methods, procurement procedures, declassification policy, and all of our Departmental modes of operation, so too do we need to achieve the right numbers and mix of knowledge, skills, and abilities among our employees.

I am very heartened that all our sites and points of contact have been on board with this workforce planning from the get-go; as a corporate entity, we have finally created the synergy to develop an integrated process for workforce planning complex-wide, thanks to everyone's cooperation. At this conference, you will review all of your practices, heretofore, in how each of the different sites execute workforce planning. This first step of developing a Baseline Assessment of the Department's workforce composition will glean the best practices in planning from around the complex. This is not an empty exercise; in the end, all of the sites' workforce planning and restructuring plans will be rigorously reviewed by Headquarters, and if they don't contain "real" workforce planning, we won't approve them.

On a general level, some contractors could be more forthcoming in agreeing to supply their workforce information; I want to remind everyone that, in order for the Department to do its job, we need to have ample information on this account. We are accountable to the Congress, to the President, and to the taxpayer. The political reality is that the taxpayer has a right to know why we have the type of workforce that we do, and so I encourage more cooperation on that front. When all parties are involved, including the workers themselves, the potential for success rises exponentially. Workforce planning is simply too critical for the Department and our contractors not to be rowing with all of our oars together.

Moving to the Right Workforce Structure

Once the most effective Departmental workforce composition has been determined, with job shortages and excesses identified, we have to begin to more to in that direction. By the end of this year, these decisions will force us to move efficiently, and ideally with minimum pain, toward that endpoint. There is a right way, and a wrong way, to go about this, and I think it's instructive to compare how private sector companies have tried to do this--let's take a quick look at both a disaster and a success story.

The Arizona Public Service company, a privately-owned electric utility, faced a bleak future in 1988 with diving profits and high overheads, and decided to lay off 800 workers. The end result was that valuable employees left the company, overheads were still too high, morale sank lower, and work efficiency was not considered. Consequently, productivity went down, not up. After going through a further downsizing of 1100, they came to the conclusion that performance management, changing the culture of employee/management understanding, and planning the restructuring period was fundamental to its corporate health. They articulated the following lessons learned: a proactive approach to managing the emotional impact of change; a continuous effort to improve and reinvent; and that leadership behavior and skills are foremost deserving of the most attention. Instituting these changes led to a sounder financial position and a change-ready culture by 1993. In sum, this company blew it at first, but then recovered by discovering the question: how can we use the people we have most effectively?

The NYNEX Corporation offers a superb example of how to go about a restructuring. The company faced a 23 percent reduction in workforce due to technological advance and elimination of non-value added work. They took a proactive, organized approach in negotiating a new contract with their union two years before it expired. To avoid involuntary lay-offs, NYNEX offered early retirement incentives, managed other voluntary severance arrangements with its employees, instituted job-sharing, and established impressive worker retraining and education programs. For example, the company created a 4-day work week for much of its workforce; on the 5th day, participants in the program go to school at the State University of New York. When they graduate, employees receive a wage differential above the base wage specified in the contract. How did NYNEX and the union come to terms on such a program? They simply decided to act in the long term interest of both parties. That belief, ladies and gentlemen, is at the core of section 3161 of the National Defense Authorization Act of 1993. As you all know, this piece of legislation directs the Department to mitigate the social and economic impacts of major workforce reductions.

The Office of Community and Worker Transition: Meeting an Essential Need

While some people in both the Legislative branch and the Executive branch question why we still have the Office of Community and Worker Transition, I would like to justify briefly to our critics why it is good management and good policy. First, let me remind those folks that we didn't make this up; Congress legislated this approach. I look upon 3161 as constituting an investment in a strategic resource and thus, is funded accordingly as a means of achieving organizational mission. While Section 3161 is not an open-ended program, it has provided decent benefits to those Americans who helped win the Cold War. As we saw with the examples of NYNEX and APS, such a forward-thinking policy retains a modicum of positive workforce morale, and has reduced the risk of lawsuits. That is why the Secretary has also directed that the objectives of section 3161 applied to all workforce restructuring in the Department of Energy. At the most basic level, creating the Office of Community and Worker Transition is consistent with best business practices. As we move the DOE workforce to the final employment numbers and right skill mix, we have an obligation to accomplishing that objective with the interests of our workforce in mind. Like NYNEX, we plan to tailor our severance packages to incentivize those workers who are in excess of our strategic requirements. We will continue to provide retraining programs that cost-effectively transfer some of our workers within the complex. I am very proud to report that 3,535 workers have been internally placed within the Department's complex since 1993, and that an additional 1,704 workers were retrained by the Department and also internally placed. I hope your hard work in planning for the future, at this workshop and when you go back to your sites, can take advantage of these kinds of opportunities. However, the reality is the situation is that downsizing the complex will not be painless--but there is a lot we can do to minimize the pain, and we must work toward that end as we move to bring this effort to closure.

So, notwithstanding James F. Byrnes' line that "The nearest approach to immortality on earth is a government bureau," there is an end to the work of Bob DeGrasse's shop. Where is the light at the end of the tunnel? Well, there is no definitive answer, but a significant part of the answer lies in our appropriations. Any deviation from our projected budget means direct repercussions for our workforce; we begin to cut into muscle, and the decathlete loses critical performance. Not all Members of Congress are knowledgeable that reductions of our budget are directly related to reductions in jobs. We will be very fortunate in 1997 to sustain most of the purchasing power of the 96 budget--which is why we will need and count on the vigorous support and organizational abilities of everyone in this room today--especially our elected folks--in the coming budget cycle. So, between the need to complete the downsizing efforts begun three years ago, the need to fulfill our 3161 responsibilities, and the need to cope with the vagaries of the budget, I think it's fair to say that the path that lies before us is not without its thorns. And yet, as with many other aspects of the Department's mission, the challenges we face in this effort are really opportunities to excel in redefining the way the government serves its people.

Conclusion

Today I have briefly outlined the course the DOE is taking to merge our workforce planning and workforce structure. I've described the critical need to plan the right balance of numbers and skills in our workforce to meet our changing mission, and underscored the need to do that with compassion and reason for our workforce. And hopefully, I've made a case to have the Office of Worker and Community Transition around to meet these needs.

America, and the workforce serving the Department of Energy, are affected and buffeted by changes that are reshaping the world. The pride in producing a successful product is clear to those of us in the Federal government. The dedication which Federal workers show day-in and day-out help this nation succeed in missions, such as the operation of the Defense Waste Processing Facility at Savannah River that began operations yesterday. And the skills which our employees bring to their jobs is important to successfully finishing the task of cleaning up environmental contamination created during the production of nuclear weapons as the U.S. won the Cold War.

But pride, dedication and a proper skill mix are not necessarily enough as the Federal government and Department of Energy face a climate of budget constraints. We must continually seek to refine these qualities so that the Department can meet its mission quickly and effectively. We must not shy away from the hard job of ensuring we do our work with an efficient workforce, yet at the same time create opportunity for those employees whose skills no longer perfectly fit the task at hand. If we can continue retraining our workers and offering educational opportunities, the Clinton Administration will maintain its commitment to a diversified and skilled workforce prepared to meet the challenges of the 21st century.