February 26, 2009

Univ. Banks on Faculty Reduction

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These are difficult financial times — the University faces a $200 million budget shortfall, 10 percent of the operating budget for the Ithaca campus. But administrators have emphasized it is important to keep a sense of proportion.
Salaries and benefits for faculty and staff represent 60 percent of that budget — approximately $1.2 billion. With such a significant sum allocated to salary, the administration also faces a number of hard decisions that will affect the state of employment at all levels, and thus will also shape the future character of the University.
Even President Skorton, as reported in his Jan. 25 Progress Report on the Financial Situation at Cornell University, voluntarily reduced his own salary by 10 percent, a number representing approximately $51,623.
Varying levels of employees operate under different employment conditions. Tenure and tenure-track faculty — typically assistant professors evaluated for a six-year period, after which tenure is decided — cannot be laid off. Non-tenure professorial staff, lecturers for typically have several year contracts, which may or may not be renewed at their conclusion.
Attrition, an initial strategy being used to cut budgets, refers to reducing the number of faculty or staff naturally through voluntary retirements or leave and not hiring to replace the loss.
Provost Kent Fuchs said in a Feb. 12 interview with the Cornell Chronicle that attrition will also condense the size of the faculty over the next three years.
Several weeks ago in a meeting with The Sun, Fuchs alluded to a previously and recently perceived “retirement crisis;” due to the large number of “baby boomer” professors hired in the 60s and 70s, over 600 professors were projected to retire in the next decade. Yet, unexpectedly, in this new economic context, this perception has translated into a concern about non-retirement.
“It’s interesting. Three months ago we thought there would be too many faculty retiring. Now we’re concerned there won’t be enough,” Fuchs said.
According to Opperman, about 40 percent of tenure and tenure- track faculty are of retirement age, currently set at 55. Such a percentage represents a significant cost to the University.
Prof. Kenneth Birman, computer science, was head of the Engineering Policy Committee when federal statutes determined that faculty were exempt from a forced retirement age.
“The issue [of non-retirement] is very difficult,” Birman said. “[T]here is no doubt that a great many faculty members have chosen to remain active long beyond the historical retirement age, which used to be 65 to 68.”
Birman described the issue of faculty hesitation to retire as partly financial and partly psychological.
“The financial issue is easy to understand,” he continued. “As a tenured faculty member on the University payroll, your retirement funds accumulate. During a period when we’ve seen a sharp market downturn, you can easily imagine that many older faculty who might have been ready to retire would suddenly be wondering if they’ve really saved enough to afford that step.”
According to Birman, under the current Cornell faculty retirement plan, managed by TIAA-CREF, individuals control the investment of their own retirement portfolio. Many such portfolios have taken big losses.
“There’s a general joke that [current faculty] look at their retirement account and say woa, maybe never,” said Dean of University Faculty William Fry. He described his position as a liason between the faculty and University administration, that deals with such concerns that transcend college bounds and “has no authority and no budget … not involved in hiring, or firing.”
The psychological aspect of retiring noted by Birman may be one such concern across the University.
“The psychological challenge is that after a lifetime as a faculty member, any shift in status can seem like the end of one’s career … If so, I would hope that we could revisit the issue and try and address it,” Birman concluded.
“Encouraging incentives is something you can do if it’s their choice,” Opperman said. “The downside of that option is one of few things you can do when you give choice to a person, [it] slips into seeming as though you don’t need people who are older. They are some of your most talented workers. You don’t want to braindrain your organization and lose your most valuable people.”
Another aspect of this method of attrition is hiring. Thus far, initial efforts have focused on instituting an external hiring pause – extended to June 30, 2009, internally hiring staff dislocated by program cuts, and providing resources those adversely affected by the cuts, according to Skorton’s report on Jan. 25.
“Some faculty searches will proceed, but significantly fewer across the entire university,” Fuchs told the University. “We need to manage the reduction in the number of faculty strategically, so that high-priority areas don’t lose critical faculty.”
Many have expressed concerns about preserving the quality of education at the University given this decrease in faculty and staff and combined with either the maintenance or the potential increase of student enrollment.
“My concern and other people’s,” said Student Trustee Michael Walsh grad, “is the reduction in the number of staff and faculty. Now you have less people carrying the exact same load that the University was pushing forward before.”
According to Fuchs, vice presidents and deans have until March 2 to spell out how they will cut their budgets.
“We’ve also asked the deans to keep as their top priority retention of staff positions and faculty searches. But they still have to meet the budget goal, so I know that both the size of the faculty and overall workforce will be reduced,” Fuchs said.
Loren Tauer, chair of the Applied Economics and Management Department in the College of Agriculture and Life Sciences, said that her department is hoping to reduce the number of paid undergraduate teaching assistants, believing she can encourage more students to serve as T.A.s for free. In addition, CALS hopes that through attrition, it can reduce the number of professors in the college by about 40 to 45.
Many of the colleges will reduce hiring as a strategy to meet their budget reductions. Christopher Ober, interim dean of the College of Engineering, explained how the economic downturn has affected his school’s hiring plans.
“The College of Engineering has six searches for new faculty instead of the 12 searches we expected to have going forward,” Ober stated.
ILR also needed to cancel two of their three faculty searches for this year.
Some deans have chosen to combine different programs, schools and even positions in order to secure cuts.
Other universities, such as Dartmouth, the University of Pennsylvania and Harvard, have also struggled to find ways to reduce their spending. On Feb. 9 Dartmouth announced in a press release that staff will not receive salary increases, 60 staff employees will be laid-off and 28 will work reduced hours. Penn. President Amy Gutmann has discouraged new faculty or professor searches, except when absolutely necessary, and has discontinued discretionary and recruitment bonuses. Both Harvard and Dartmouth have recently released incentive based programs to encourage retirement as one strategy to cut budget.
Cornell has developed a number of initiatives to both deal with the repercussions of actions to balance the budget, such as a hardship fund to help employees who are facing financial difficulties and also to ease the impact of the suspension of raises for many employees under the Salary Improvement Program for fiscal year 2009-10, as announced in Skorton’s report on Jan. 25.
Several administrators declined to comment on an incentive plan for encouraging retirement, noting a public announcement to be released in the coming days.