Chapter 6: Reduce Administrative Staff

Recent studies by Daniel Bennett of CCAP, by Jay Greene of the University of Arkansas, and by the Delta Cost Project substantiate what many faculty have long claimed: administrative costs are soaring at universities, mainly through the growth of staff, though also by large increases in compensation, particularly at the highest levels.  For example, from 1997 to 2007, the proportion of full-time equivalent employees in the categories “executive, administrative, and managers” and “other professionals” rose from 22.6 percent to 26.1 percent, continuing a trend that had begun still earlier. Universities and even many liberal arts colleges suffer from a huge bureaucracy that is not only expensive, but contributes to slow and often non-innovative decision making. It is not uncommon for schools to have more people working in an administrative capacity than serving as faculty members.

In the private sector, businesses facing intense competition often slash administrative staffs—the auto companies are a good recent example. Administrators do not make cars, nor do they teach classes. You can have a university without administrators, but not without students or faculty. The minimization of administrative costs and bureaucracy should be sought in any university reform. A few decades ago, few universities had more than a small centralized public relations staff. The typical mid- to large-sized school today has PR people in units throughout the university. Similarly, the number of people involved in affirmative action, diversity coordination, or serving as multi-cultural specialists has soared. As the nation shows continued and often spectacular progress in eliminating the vestiges of discrimination, is it still necessary to have all of these people? Do campuses really need to hire sustainability coordinators? Do they need associate provosts or vice presidents for international affairs?  All of these types of jobs simply did not exist 40 years ago.

A related problem is the explosion in salaries, particularly for senior administrators.  Even five years ago, $500,000 was considered an extremely high salary for a university president, whereas today a growing number make $1 million or more. Chief financial officers of universities that made $175,000 five years ago often make $300,000 or more today. Universities argue they need to pay these amounts to keep up with their peers and to be competitive with the private sector.  But universities offer benefits including higher job security not available in the private sector and for decades were able to attract very competent administrators for salaries that, relative to other workers, were far lower than they are today.

The expanded version of this work offers some suggestions on combating administrative bloat. No doubt the root problem is that there are few incentives to reduce administrative costs, and little or no accountability of top administrators to external forces, in part because of huge amounts of third party subsidy payments.

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