Post Branch Network, Austria: a comprehensive approach
The Austrian Post AG is a government-run mail service with a total of 25,000 employees. In 1999, in preparation for market liberalisation, it changed from being a public company to a joint stock company, open to private partnership. Telecommunications and passenger traffic became individual enterprises, and the rest of the Post AG was organised into five operational fields.
The company introduced an age-conscious initiative in one of these fields, the Post Branch Network. This network comprises 2,400 post offices with 6,500 employees (made up of 50% men and 50% women) and 8,000 delivery people. The post offices still have the state monopoly for mail and parcel transportation. In addition, they provide savings, credits, leasing and insurance services for the Post Bank.
In the light of the planned liberalisation of the entire postal market in 2007, and the changes involving Internet and electronic mail, the management aimed to transform the Post Branch Network into a successful enterprise.
Traditionally, the culture of Post AG has been somewhat administrative, hierarchical and similar to other public institutions. Human resources management (HRM) and personnel development have not been well developed. In the monopoly enterprise, clients and quality processes were not prioritised, and the trade union and works council had much influence, especially in relation to recruitment and early retirement policy.
Although the official retirement age for men and women was 60 years, early retirement was traditionally taken at 56 years. In the last 10 years, the recruitment policy has been very strict and personnel reduction has been a goal of HRM.
The original initiative
The reorganisation of the Post Branch Network, from a network of public post offices to a private retail company, involved change on three levels:
- transforming staff from public servants to salespeople;
- transforming the branches from post offices to postal shops;
- moving from a state-controlled monopoly to a private joint stock enterprise.
This strategic change process had to be achieved while taking into account the needs of the company’s relatively old workforce. In 2000, the average age of the workforce was 41 years, and 52 years for managers. The early retirement age was around 55 years. Therefore, the management felt it was important to introduce an age-conscious reorganisation process. This consisted of the following elements:
- adjusting management’s attitudes towards ageing;
- ensuring that no dismissals were made because of this change process;
- encouraging participation in the process among the 700 regional and office managers;
- focusing on developing measures to respect age diversity and the needs of older employees.
Accordingly, middle management developed a roadmap for change – the so-called ‘Vösendorfer Manifest’. Several measures in the Manifest were aimed at age diversity and age management, arising from the needs of older employees. Such measures included:
- dual management of shops by a younger operative manager and a senior quality manager;
- regional teambuilding by closing single-person offices, which accounted for 27% of post offices;
- greater autonomy for shop managers and new retail business offering new challenges. The need for client orientation and behaviour were met by introducing psychological team training sessions. An internal benchmark procedure based on customer satisfaction proved encouraging for employees.
Good practice today
Due to the planned liberalisation of the post market in 2007–2008, a strategic reorganisation of Post AG was initiated, transforming it from a public office to a market-orientated retail company, to help make it more competitive. For the Post Branch Network, such a reorganisation was particularly difficult due to the high average age of the workforce.
To be successful in this change, the management initiated an age-conscious reorganisation process aimed at minimising the unfavourable effects of reorganisation and maximising the skills of experienced superiors and employees for a sustainable and successful reorganisation. The 700 regional managers and superiors (many of them delegates of the works council) designed the structures and the roadmap (the Vösendorfer Manifest) for the company’s transition to a retail company. Some examples of the age-conscious measures adopted are as follows:
- All employees are considered experts on clients and regional markets and have hidden potentials. The more of these experts that participate in developing a market-based retail company, the higher the chances of creating a deregulated postal market in the future.
- Work was made more meaningful. The competencies of all employees, their relations with clients and their innovative ability were challenged. The key focus was ensuring the survival of the company in a global market and enhancing employees’ personal growth through training.
- A recognition that change is stressful, particularly for older people. Stress prevention is thus based on providing social support and a broad range of options for employees. For example, the single-person offices were fused to create regional team offices, which provide joint working, social support, exchange of skills and knowledge and human relations at work.
- A change in branch management from single leadership to dual management, with a younger manager responsible for the operative business and the older manager responsible for quality, team development and client relations.
- In addition to mail and saving services, a retail business was built up as a third business field in the branches. New business, in turn, offers new challenges.
- The development of a customer-orientated attitude, which proved the most difficult challenge for former clerks, necessitating significant changes in behaviour, perspectives and values. Much effort was spent on training employees and teams to become more open-minded towards customers and their wishes, to behave positively and to offer consultation for different services. In line with the customer-orientated approach, the corporate design of the offices and employees’ uniforms were also modernised.
An overall evaluation of the period from 2000 to 2003 showed positive economic, structural and human resource outcomes, notably:
- no dismissals during 2000 to 2003 arising from the company’s transformation to a market-orientated retail company;
- 23% reduction in sick leave;
- an increase in the personnel development and training rate to 74%;
- 27% reduction in offices with only one employee;
- 5% increase in personnel productivity;
- reduction in personnel costs (sickness costs, overtime costs) by 8.7%;
- a sales volume increase of 10.3%;
- successful establishment of new retail businesses (18% share of annual turnover).
Overall, this age-adjusted reorganisation has proven to be sustainable. An internal benchmark system, the Customer Relations Index (CRI), monitored the company’s development. The best results were published and received recognition. There was no penalty imposed in cases of bad results: however, employees do receive support to help reduce negative outcomes. The CRI also helped to maintain a positive atmosphere in the company. Management was responsible for ensuring that this internal competition developed in a respectful and age-conscious manner, e.g. through social learning, recognition and benefits. Although a second phase had been planned by the company, it will not now take place, as the government has made no clear decision about the future of the postal sector.
In 2004, the Post Branch Network was awarded the Nestor Award by the Ministry of Social Affairs and Generations in the large enterprises category for its measures relating to ‘age-adjusted working life’.
Contact: Dr Herbert Götz, Vorstandsdirektor, Post AG, Bereich Postfilialnetzwerk
Österreichische Post AG Unternehmenszentrale, A-1010 Wien Postgasse 8, Austria
Telephone: +43 (0)151 5510
Fax: +43 (0)151 5513 0039
Company website: www.reifepruefung.at