For agencies facing reduced staff sizes, the good news is human beings are not resistant to change, said Michael Chase, the former executive director for human capital at the Defense Contract Management Agency. The bad news is they won't change unless there is an imperative to do so.

"Now, with the decrease in budgets, there's your imperative for change," Chase said in an interview with The Federal Drive from the Human Capital Management Defense Conference in Arlington, Va.

Chase, who is now with the Department of Veterans Affairs, said DCMA spent the last 18 months figuring out how to cut workforce and budgets while increasing efficiency.

"It is possible to do more with less," Chase said.

From 18 months ago, DCMA's staff decreased from about 150 to 113 employees, Chase said. At the same time, the agency was able to increase its customer service rating in that time by 45 percent.

DCMA turned to new technologies. For example, work that used to be done on paper is now done online, Chase said.

What's more, the agency re-imagined its entire organization as if it were a start-up.

"Forget about what our workforce currently looks like. What would a 'to-be' organization look like if we were starting up from scratch without all these legacy systems and using the latest technology to be able to do this with the minimum people required," Chase said.

DCMA compared the to-be organization with the as-is organization and put metaphorical "red X's" on the as-is organization.

"What's critical when you do this is you have to keep faith with your people because if you just start cutting people loose left and right ... it sends a bad message to the remaining employees," Chase said. "They're looking very closely to see how you handle the people that wind up going away."

Employees were able to see both the to-be and as-is charts. Those with the "red X's" on their positions were told, as much as possible, the agency would allow people to stay as long as they were performing at a high level. DCMA relied instead on attrition to reduce its workforce size. Some people did "self-select" out if they saw a red X on the box for their position.

"Basically, when someone would leave on their own, we would look at the box. If it had a red X on it, you just didn't fill behind it. If it didn't have a red X in it, we would move someone internally into that box and then look at their box," he said. "What happens is, you find that you get there a lot quicker than you thought you would."

See more coverage of 2012 HCMD Conference