When “Cost Cutting” and “Staff Cuts” Are Passed Off as Reductions in Administrative Bloat

At the end of December, the Wall Street Journal published an article by Steve Herbert titled “Colleges Trim Staffing Bloat.” So, if you did not read any further than the title, you might think that all of the attention to administrative bloat as a cost-driver in American higher education was finally producing some results.

Think again.

The article focuses on cost-cutting measures at four institutions that seem to have been selected as much for their geographic diversity as for their relevance to the stated topic: the UC-Berkeley, Kansas, Michigan, and the SUNY system.

UC-Berkeley seems actually to have cut some administrative positions, but those cuts receive the least attention—the least space—in the article. And there is some ambiguity in the seemingly large numbers being reported. First it is reported that the university “restructured its management chain,” eliminating 280 middle management positions and thereby saving $20 million per year. But, several paragraphs later, it is reported that the university has saved $70 million since 2011 by “centralizing purchasing and laying off a layer of middle managers, among other things.” So, almost too predictably, there is some ambiguity about how much of the savings has been realized by the elimination of administrative positions and how much by changes in structures and procedures not requiring a reduction in personnel.

At the University of Kansas, the reported savings have nothing to do with administrative positions. The university saved $1 million per year by centralizing the locations of its 800 computer servers and thereby reducing the energy costs need to keep the rooms at an appropriate temperature. In addition, the university “revamped its back-office operations,” saving $5 million per year by reducing its paper use by 11 million sheets per year.

The only reported savings at this university having anything to do with personnel has involved an average reduction of one-hour per day among maintenance workers in the time that they spent driving to and from the sites to which they are “deployed” (which seems a strangely military term to use in this context). The university was thus able to “trim” 30 positions and save $1 million per year. It needs to be emphasized that maintenance workers are not administrative support staff—that they are paid much less than administrative support staff and that the category to which they belong, which would include, for instance, food-service workers, has been dramatically reduced nationwide largely through the outsourcing of those services to private companies. Those companies pay their workers considerably less than the universities paid the eliminated workers, but the actual cost to the university of maintenance services, food services, and other basic services is typically only very marginally reduced (if, over the somewhat longer term, it is even reduced at all). So, in terms of the institution’s bottom line, this outsourcing is largely an accounting change that suggests much more significant savings than it actually produces.

The reporting on what has been occurring at the University of Michigan is rather perfunctory and raises more questions than it answers. The university administration has contracted with Accenture, a consulting firm that focuses on eliminating inefficiencies. Of the firm’s recommendations, only this is reported: “Ryan Oakes, who directs Accenture’s education business, declined to comment on the Michigan proposal but said the inefficiencies at universities are ‘an order of magnitude’ beyond those found in corporate America.” But, apparently, those “inefficiencies” have focused as much on the instructional side of things as on the administrative side because a faculty member in engineering has posted a letter of protest that has been signed by more than 1,000 other faculty. That faculty member, Fawwaz Ulaby, asserted that in attempting to apply corporate models to the university, the consultants have simply demonstrated that they “are ignorant” about how a university operates and “out of their element.” So, at the risk of being cheeky, it sounds as if the university has attempted to address the problems caused by corporatization by consulting with a firm committed to corporatization.

Finally, the article reports on the savings achieved across the SUNY system by paying for 200 software licenses, instead of 10,000, producing a savings of $3 million per year. The article reports the following assertion by “SUNY stem spokesman David Doyle”: “The work is only beginning. SUNY is halfway towards its goal of returning $100 million in administrative and cost savings back to the classroom and student services.” It sounds terrific, but to be honest, I’ll believe it when I see it—when positions on the administrative side are eliminated and the savings are straightforwardly used to fund positions on the instructional side, preferably tenure-track faculty positions. For what typically occurs is that “savings” are announced with great fanfare and the reallocations end up funding things that are ostensibly instructional but, in actuality, are just another type of administrative expense, a further expansion of administrative staffing.

One can, of course, dismiss this article out of hand simply because the Wall Street Journal is a very unlikely place to expect any meaningfully focused examination of the effects of corporatization on higher education. But I suspect that we face a much broader problem with insufficient public awareness of what administrative bloat is, of how it is consuming resources previously allocated to instruction, and of how it is contributing to higher direct costs to students and therefore to rapidly escalating student indebtedness.

Moreover, some of my own colleagues have complained when I have focused on the bloat in presidential salaries, arguing that doing so deflects attention from the much broader problem and smacks of “class warfare.” My counter-argument has been that we first need to get everyone’s attention, before we can start explaining the less easily grasped and less easily explained dimensions of the problem.

2 thoughts on “When “Cost Cutting” and “Staff Cuts” Are Passed Off as Reductions in Administrative Bloat

  1. Yes. One of the more diffuse challenges we face is getting people to understand terminology we use every day, like “staff.” Not everybody who works on a university campus is “staff” or “faculty,” and “deans” don’t do the same thing “professors” do, and [yada yada yada]. But most people don’t think twice about those differences, and that makes it easy for publications like WSJ to conflate all kinds of things willy nilly.

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