Postal Services St. Maarten have too many employees

The newspaper Today reports today, that the transfer of employees from Nieuwe Post Nederland’s Antillean to Postal Services St. Maarten (PSS) in 2010 has had dire consequences for the current organization. There are indications that Saba and Statia maybe very lucky in that their postal services are handled by Flamingo instead of PSS. This appears from the Quick Scan report the government accountant bureau Soab submitted to the Minister of General Affairs on January 2 of this year. Soab issued seven copies of its report – most likely one for each member of the Council of Ministers. Today obtained a copy of the confidential report that gives a candid insight in the state of affairs at PSS.

The government holds one hundred percent of the shares in PSS and Prime Minister Sarah Wescot-Williams, in her role as Minister of General Affairs, is the shareholder representative. “Although the shareholder signed the agreement of the 1-to-1 transfer (of employees from NPNA to PSS – ed.), and thus accepting the negative consequences of this choice, minimal provisions were provided to assist PSS in dealing with the outcome,” the Soab-report states.

The personnel PSS had to accept under the agreement with NPNA is now hanging as a millstone around the organization’s neck. When the Soab did the quick scan the postal services had 35 employees that included two managers and two supervisors. “Seventy-five percent of the employees were employed before 2009 and most probably have a permanent contract,” the report notes.

The strategic business plan mentions 29 fulltime employees (FTE), including two directors and five supervisors. That leaves 22 FTE’s for the operational level. The Soab-researchers found however that PSS has 32 FTE’s including one department head. “There are 9 FTE’s more than in the desired situation on the operational level.” In other words, the PSS has nine employees too many on the payroll.

The numbers mentioned in the strategic plan assume a fully operational postal service. This makes the surplus of personnel even more significant, the report states. “PSS currently performs all of the postal services, but only five of the thirteen non-postal services.”

This explains the shortfall in revenue from non-postal services; according to the report this revenue is 82 percent below budget.

Nevertheless, the external financial controller confirmed that the salary expenses are fixed because “personnel are permanent or the persons on contract perform tasks that cannot be executed by the permanent staff.”

The result of this situation, is that PSS is “unable to make key decisions concerning the current level of FTE’s,” the report points out.

The 1-to-1 transfer agreement with NPNA  turns out to be a bad deal for PSS. “As part of the terms of the transfer the personnel shall maintain their current salary and all other current benefits,” the report states. “Additionally their legal position and labor conditions must be guaranteed by PSS for the duration (of their) employment.”

Because most tasks on a strategic level were performed at the NPNA headquarters in Curacao, PSS is stuck with too many employees on the operational level.

As we reported yesterday, PSS did not manage to secure funding for investments or for hiring key staff members. Many of the key support and management positions were vacant at the time the report was written. The statutory director told the researchers that he did not have the expertise in house to form a management team. The director explained the vacancies are the result of a lack of funds.

The strategic management group (SMG) that existed within PSS at the beginning of 2012 “is not validated by the PSS articles of incorporation and the corporate governance code,” the report notes.

PSS asked advice about the legal standing of its SMG. Attorney Richard Gibson Jr. reported that the structure is not against the articles of incorporation or the corporate governance code, because the SMG has an advisory role and the director remains responsible. Attorney Roeland Zwanikken opined that the legal standing of the SMG conflicts with the background of the articles of incorporation and the corporate governance code. He also noted that there is no legal basis for the SMG and that its exact rights and obligations are not transparent.

The report notes that the SNG has in the meantime been dissolved “because agreements made within the SMG were not being executed and it seemed that the various responsibilities of the different bodies outlined in the articles of incorporation were shifting to the SMG.”

The Soab-report concludes that “there are more permanent employees working on an operational level than desired and with higher related fixed personnel costs. The shareholder has not provided provisions to mitigate the risks of the 1-t-1 transfer of personnel.”

The Soab-researchers advise in their report to “alter the organization structure to a minimal structure to contend with current key tasks and services of PSS.” This seems to hint at downsizing, though no measures in this sense have been taken since the report appeared. The report furthermore advises to re-evaluate the added value of support departments like human resources, internal audit and compliance.

To get out of the quandary with too many operational-level employees, the report advises to research which employees have the potential and the motivation to fill position on the tactical level and to see how they can be trained to fill these positions. The report also urges to fill key positions as soon as possible and to discuss with the government measures “to mitigate the established financial and operational risks.”

In their Editorial Today adds:

The Soab quick scan of the postal services makes clear that PSS did not stand a chance from the get go. Without funding, but with a task to perform, the organization was more or less left to figure everything out all by itself – without any money to speak off.

To add insult to injury, the government also made a bad deal with Nieuwe Post Netherlands Antilles by accepting the transfer of all NPNA-staff in Sint Maarten to PSS.

This decision has saddled PSS with a rigid payroll, with too many employees on the operational level and – due to the lack of funding – with a revenue stream that is unable to match the expenses.

Is there a way out of this quandary? The Soab-report provides several suggestions but to make something happen decision makers have to spring into action before this ship sinks forever.