Los Alamos Workforce Dynamics

By Jeff Miller, Jeff is President of local business Ngenuity, Chair-Elect of the Regional Development Corporation

The economy of Northern New Mexico is directly related to the health of Los Alamos National Laboratory. Any disruption in the Lab’s budget causes an instant reaction in the community. Sometimes we over-react; we never under-react. It has been said that when the Laboratory catches a cold, Northern New Mexico goes on chemotherapy.

To help address the current budget shortfall, Los Alamos National Security, LLC (LANS) has been restructuring the Laboratory workforce to reduce total labor costs. The restructuring started last fall with the announcement that 400-500 contract labor assignments would not be renewed. In addition, LANS placed constraints on external hiring of new employees. As LANS employees leave the Lab for retirement or to take a new job, they are often not replaced creating savings through attrition. Given the severity of this year’s budget shortfall and the projections for future budgets, the workforce restructuring will likely continue through Fiscal Year 2008.

What impact is this having on our local economy? First, we have seen a number of contract workers leave our community for work elsewhere. That is the nature of the staffing business; by definition the relationship between a contract worker and the Laboratory is temporary. Contract labor provides a flexible component to the Laboratory workforce and is a critical management tool for times like these. All major employers use contract labor and LANS has simply exercised their option to reduce contract labor to help meet budget constraints.

Temporary, contract workers for the Laboratory will continue to be an important element of our workforce and I expect the demand will stabilize once the current reshaping is completed.
Second, the population of LANL retirees will grow at an accelerated rate. There is an underlying demographic that will make this a reality, independent of the current Laboratory budget problems. Throughout several U.S. employment sectors (including the Federal Government) the workforce is populated with a disproportionately high percentage of baby-boomers (those born between 1946 and 1964). The oldest will turn 65 in 2011. From that point forward, the number of employees eligible for retirement, and thus the rate of retirement, will steadily increase for 20 years. This would not be a problem except that there currently are not enough qualified U.S. workers waiting in the wings to fill positions vacated by retiring baby boomers.

Los Alamos is getting a jump-start on this phenomenon because several hundred LANL baby boomers have achieved retirement eligibility well before reaching age 65. These people are buy-in-large financially well-off, well educated and in good health.

Whether this retirement wave has a positive or negative impact on the Laboratory and our community depends on how we manage the challenge. If poorly managed, the Nation will loose much of the critical knowledge that retiring scientists and engineers have gained throughout their careers. That knowledge must be captured and transferred to younger workers.

If well managed, retirees will have the option of remaining in the workforce in a less than full-time capacity that is compatible with their desired lifestyle. We will also have more citizens able to launch second or third careers with start-up companies commercializing technology developed at the Laboratory and we will have a larger pool of volunteers for not-for-profit agencies and government leadership positions. Some retirees might elect to work in our severely short-handed service businesses. Perhaps we will have the only hardware store in America where the electrical department is staffed by an electrical engineer, the paint department by a polymer chemist and a materials scientist is selling lumber.