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Staff and program reviews inform expense decisions

Rethinking higher education expenses: A focus on people and programs

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In this article, the third in our series of articles with insights from Robert Scott, President Emeritus of Adelphi University and senior advisor to Grant Thornton’s Higher Education practice, our focus is on ensuring that cost decisions about people and programs are mission based and student focused. --   Dennis Morrone
National Managing Partner
Not-for-Profit & Higher Education Practices





Group of Students Walking Together and Chatting In the previous article about rethinking higher education expenses, Scott delved into areas for an institution’s president to focus on before engaging in budget decisions. He discussed the role of Purpose (mission) in the reassessment of the cost structure. Here, Scott moves on to the next two P’s — People and Programs.

Faculty members are considered the core of a collegiate institution; however, the structure is incomplete without the students, the administration and the staff.

When it comes to controlling costs, especially in difficult times, it can be tempting to cut support for faculty and students. Yet, full-time faculty represent the institution’s commitment to student success. They nurture younger faculty, are responsible for the curriculum and serve as advisors to individual students and campus organizations. While part-time faculty can provide significant benefits in teaching subjects that are highly specialized but in insufficient demand to warrant a full-time instructor, they too often are hired to save money and are not available to advise either students or the institution.

While it may be appealing for institutions to cut faculty positions, they must respond to state and federal compliance requirements and other pressures by adding staff. These include Title IX administrators and HR, legal and IT staff. In addition, colleges add staff for recruiting, marketing, advertising, fundraising and other functions related to enrolling the freshman class. Nevertheless, it is the faculty who most closely align with the mission.

A review of the cost structure can be organized around five Ps — Purpose (Mission), People, Programs (and Services), Processes and Place (or Plant). While the analysis differs between a single-campus private college and a multicampus public university system, the variables to be examined are the same. The need is for “position control,” a routine analysis, perhaps conducted weekly, of open positions. The alternatives are to fill the position, move the position to another department or keep the position open, if not closed altogether to save money.

Support your People Every institution should have a plan for the professional development of faculty and staff. For faculty, the programs should not only help enhance the professional standing of teachers and scholars, but also help prepare faculty members for positions of leadership such as department chairs, and governance such as service on the faculty senate or a board committee. Administrators and staff members also require professional development. One of the means used is membership in professional organizations and societies. These memberships incur additional costs — dues, travel, lodging, food and time away from the job. A careful cost-benefit analysis should be undertaken to ensure that the institution and its mission are enhanced by these expenditures.

An essential component of professional development is the annual review of performance and compensation. Even with collective bargaining agreements that specify procedures and pay, post-tenure reviews can be valuable. For administrative and other staff who are not members of a collective bargaining unit, such reviews are essential for positive reinforcement. In determining where to shave salary costs, it’s wise to look for less-than-obvious value provided. Too often, the lowest paid staff are the actual “front door” for visitors and prospective students and families. These employees become the face of your institution, making them key to connecting with students, families, faculty and other staff and stakeholders.

It is prudent to have an annual or biannual review of executive compensation, as well. The public and politicians are right to be concerned about multimillion-dollar contracts for campus and system presidents who appear to be more chief executive officer than chief purpose officer.

One method for analyzing the effective use of faculty and staff positions is to engage in a “Brown Paper Wall” exercise. The idea is to rough out ideas rather than to create a detailed plan. A conference room wall is covered with brown paper for drawing the organization chart, showing all positions in all departments. As the leader of the practice, count the number and type of positions. Ask your senior team to step back and, using sticky notes, place comments about the tallies that raise questions about equity and efficiency in staffing. Are there too many senior staff or middle-management positions relative to needs? Is an area understaffed?

The same methodology can be used to review the course schedule with enrollment data in order to see, by faculty rank, what level of faculty member is teaching which level of course and to how many students are attending. Again, the goal is to attain equity, efficiency and effectiveness in course offerings and the faculty deployment.

Using visuals like brown paper to map what exists and prompt questions about what might be is to engage in “design thinking,” a way to imagine alternative means of organizing people and resources.

A final component of the People category consists of consultants and other vendors of specialized services including accounting, insurance, law, architecture, lobbying and research. The institution’s audit firm is an important, independent resource for assistance in conducting cost structure analyses and recommending alternative courses of action for strengthening and improving operations.

To learn more about keeping your purpose statement and goals relevant, achievable and sustainable, read “Budget cuts alone won’t amount to financial stability.” Review all Programs In addition to the ratio analyses, institutions should engage in routine academic program reviews, with each program reviewed on a cycle of five to seven years, corresponding to accreditation visits when relevant. Such reviews should involve outside experts who review a department or program-level self-study regarding goals, priorities, resources and results in relation to institutional mission and student success, in terms of retention and graduation. The outside reviewers’ recommendations should be presented to the provost and president for approving an action plan. The results should be reported to the board of trustees in the year following execution.

Academic program reviews can be helpful in determining a program’s strengths and weaknesses, as opportunities to build, consolidate or eliminate. One of the areas to focus on must be degree requirements. Some universities have difficult-to-achieve required credits that deter students from graduating in four years.

In addition to the review of individual programs, it is useful to examine the balance of academic units. Think of schools and colleges as “lines of business” and examine how each succeeds in terms of revenues and expenses, duplication, and opportunities.

As a parallel to academic program reviews, each institution should adopt a routine cycle of administrative unit reviews. Such reviews should include outside reviewers and focus on the quality or effectiveness of operations and services, as well as on issues of need and efficiency.

Some campuses have pursued a merger or have combined assets with another institution to save money, especially on administrative costs. While there are examples of successful mergers, there are many examples of plans for merger that stumbled on the shoals of cultural differences and alumni protest.

Finally, ceremonies can be costly. Inaugurations, matriculations, graduations, major lectures and even meetings of the board of trustees can involve significant expense. The questions for each are these — How does the ceremony or meeting help fulfill the mission in a cost-effective way? How does it benefit students?

Focusing on people and programs can help your institution maintain its financial position, purpose and goals.

 
In this series, Robert Scott mobilizes his expertise and insider understanding of higher education to help boards be better equipped to face new challenges. In the next article, Scott identifies a person who can add unique value to your budget discussions — your librarian.

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--   Dennis Morrone
National Managing Partner
Not-for-Profit and Higher Education Practices


Contact:

Dennis Morrone Dennis Morrone
National Managing Partner
Not-for-Profit and Higher Education Practices
T +1 732 516 5582