We at OPM took the lead in passing buyout legislation that thus far has been used by more than 35,000 nondefense employees. Buyouts, as you know, are not only more humane than layoffs, they are more cost-effective and less disruptive. Let me just say there is a right way and a wrong way to downsize, and the right way is with concern and compassion for every employee involved. You do not have to reinvent the wheel. We and others will be glad to help you.
Privatization offers another way to downsize with concern for our employees.
We at OPM, working with the National Performance Review staff, determined late in 1994 that two of our units, investigations and training, were performing work that could as well be performed in the private sector. We therefore helped seven hundred members of our investigations staff start an employee-owned company which will carry out investigations in the private sector. This Employee Stock Ownership Plan, or ESOP, was the first such privatization of a government entity and I believe it will be the model for others. As for our training staff, they chose not to pursue an ESOP, and we instead helped them negotiate a contract whereby 145 of them joined the staff of the highly-regarded, nongovernmental USDA graduate school at comparable pay and benefits. Others joined the equally distinguished Brookings Institution.