BY MADHUKAR VABLE
Large classes, replacing tenure-track faculty with contingent faculty without fringe benefits, and subpar wages have not put brakes on tuition increases in excess of inflation, because the cost drivers prior to the pandemic were not in the instructional part of the universities. Administrative bloat is one of the cost drivers, but there are great variations in this bloat among universities. Accurate measures of the bloat presented in a way that the public can understand could reward fiscally prudent universities and embarrass spendthrift universities into making changes.
The two components of administrative bloat are the number of administrative personnel and their salaries. Salaries of university presidents are symbolic statements about the value of administration in the university. High compensation of a university president is followed by high compensation of other administrators. If the measures of the bloat are to be independent of the size of a university, then the salary and number of employees need to be measured relative to the number of students and the number of scholars. The term scholar is used here to refer to tenured and tenure-track faculty because it is easier for the general public to understand.
I propose using the following five ratios as a measure of administrative bloat. For each university, the appropriate amount preceding each of the slashes below would be divided by the amount following each of the slashes.
B1 = university president’s compensation / number of full-time equivalent students
B2 = university president’s compensation / number of full-time scholars
B3 = number of full-time equivalent employees / number of full-time equivalent students
B4 = number of full-time equivalent employees / number of full-time scholars
B5 = number of full-time equivalent students / number of full-time scholars = B4 / B3
The smaller the ratios B1 through B4, the leaner the university administration will be. Scholars are expected to integrate their scholarship into their teaching. However, universities are replacing scholars with poorly paid, overworked contingent faculty. A smaller ratio B5 is indicative of a greater commitment by the administration towards the education of their students by scholars.
The above ratios can be easily understood by the general public and can be benchmarked with respect to other universities as below average, average, and above average. The percentage change in each of the ratios over five or ten years can be calculated to show the rate of increase of administrative bloat for a particular university. The information gathered by these measures would be of interest to various members of a university community and to the public.
State legislators could use this information to evaluate how the taxpayers’ money is being spent and could require state-supported universities to report the data. A university’s trustees and the university president could collect the data to assess how well the university is doing in controlling administrative costs. Faculty could question the administration about cost-cutting measures in academic programs as opposed to administration, particularly if class sizes are increased and tenure-track faculty positions are replaced by hiring contingent faculty. If the data is made public, then the students and their families would know whether tuition increases are financing the growth of administrative bloat or not.
If I have convinced you that such ratios, which would facilitate benchmarking with other universities and tracking percentage changes to the ratios over time, can reduce administrative costs, then my arguments should also convince others who are concerned about the cost of higher education. Please draw attention to this blog post by sending the link to your colleagues, your government representatives, your university trustees and president, and presidents of your faculty senate and undergraduate and graduate student governments.
Everyone wins with a lean university administration.
Guest blogger Madhukar Vable is professor emeritus of mechanical engineering and engineering mechanics at Michigan Technological University. He hosts the educational website madhuvable.org.
An unusually good write up. I like your reference to “lean” manufacturing methods, which is a very helpful framework originally from the genius of the Japanese manufacturing culture, and popularized and taught in the US market by MIT Ph.D Jim Womack. In addition to labor costs, certainly corporate debt is a significant component of fixed costs. At the University of Chicago, for example, this tops $5 Billion, largely for construction. Many universities also made large “bets” on undergraduate housing, dining, recreation and other infrastructure. I continue to believe that there is significant redundancy and opportunities for merger and cost rationalization. A complete diagnostic is a good first step. Bu there is another inherent cost distortion that is forcing tuition inflation (outside of poorly prioritized state budgets for higher education) and that is total cycle time and associated costs of degree programs, compared, for example, to the UK, where law is a 3 year undergraduate degree, and the PhD is on average a 3-year research undertaking, versus 7 years in the US. NYU finally reduced the MD by one year, and other efficiencies must be pursued if the cost/debt problem is to be reliably addressed. The cost differences, including student debt of course, are enormous. Thank you and Regards, ’96, UChicago; ’84, UTexas Austin
I think you need some additional ratios for a university (such as mine) with a teaching hospital, along with nursing, medical, pharmacy, dental schools, and the like, because these are all interconnected with the rest of the university, but staffing ratios to scholars will be high where patient care is concerned (and will include staff who are also scholars). Thus, these numbers cannot be excluded, but are also not properly measured against either students or scholars alone, but also against patients. If the calculations have no way to deal with health care complexes, then all universities with them will look artificially bloated by comparison to any university without.
Yes, quite so and very good point. Some of those ratios include intra-university transfer payments and cross-subsidization, which may blanket a number of cost inefficiencies and hide waste in a “Lean” program such as the author invokes here. The university hospital is otherwise a special case, and can be candidates for a “carve out” from the university as far as investment, revenue and management. They can also create conflicts of interest. At the University of Chicago, for example (or Harvard, Hopkins, and may others) the biosecurity regime finds a complex mix of active research interests that may or may not be appropriate to include in the larger university.