For most of its 100 years in business, the Atlanta Fed operated with a traditional, hierarchical management structure. After all, for about 90 of those years, a large part of the Bank's identity was being an operations center, a processor of items—of paper checks, cash, and, later, electronic payments. It was staffed accordingly, with layers of managers directing large groups of operations employees.
As recently as the 1990s, "we were known for being an operating district," noted Jim McKee, a senior vice president who joined the Atlanta Fed in the 1970s. And as such, the majority of employees were in operations.
A smaller, different staff
Times have changed. From 1990 to 2013, the Atlanta Fed staff shrank by more than a third, from 2,500 to about 1,600 employees. The staff is not only smaller, but its composition has also changed dramatically.
Most of the jobs eliminated involved the processing of paper checks. As consumers eschewed checks in favor of more convenient electronic forms of payments (and the Federal Reserve led the way in supporting the move from paper to electronic payments), the Atlanta Fed had to adjust its infrastructure and staffing. Over a period of roughly five years starting in 2004, the Atlanta Fed consolidated check processing centers at each of its five branches into the Atlanta headquarters. This consolidation reduced operations employment by nearly 500 positions.
As the ranks of operations staff declined amid consolidations of check and cash processing, the Atlanta Fed has hired more "knowledge workers" in areas such as bank supervision and regulation, economic research, payments research (through the Atlanta-based Retail Payments Office), and public affairs. For example, the Atlanta Fed in 1989 employed 15 PhD economists. Today, it employs more than two dozen. Because of changes in financial regulations and the increasing complexity of the U.S. financial system, the supervision and regulation staff has nearly quadrupled over the past 25 years—it has grown by more than a third just since 2009.
Not the norm for the Fed
"Those are dramatic shifts in staffing," McKee noted, "and things like that were certainly not the norm for the Federal Reserve for years and years."
Throughout the 20th century, operations areas of the Atlanta Fed, such as checks and cash processing, exerted considerable influence over internal policies and personnel decisions. The path to upper management tended to go through those business areas. Until the 2000s, operations managers spent most of their time and energy not on strategizing but on supervising workers and on the processing function.
This operations-centric culture permeated the Atlanta Fed. "We have traditionally been very much a command-and-control kind of environment," said Lois Berthaume, an Atlanta Fed executive who retired in 2012. Watch Lois as she talks about the transition.
But as the makeup of the workforce has changed, so too has the culture. Simply put, the emphasis has shifted from "always keep the boss happy" to "think for yourself," Berthaume reflected.
McKee agreed. "We've made what we had, which was good already, even better. And as a result, we make more informed decisions and are better able to carry out our mission."