Tuesday, November 3, 2009

Cutting Costs to Raise Salaries

The University of Texas system has dealt with the budget crisis with a new approach. Instead of attempting to weather the current downturn with budget cutting, minimized layoffs, and no salary increases for any faculty the current UT President, William Powers Jr., said “tough choices are essential if the university is to make progress in its quest to compete more effectively for talent with other major U.S. research institutions”.

According an article in the Austin American-Statesman newspaper scores of jobs at the flagship campus in Austin are likely to be cut in the coming months as UT retools its budget in an effort to free up money for retaining and attracting top faculty members. And in the next few years, the job losses could run into the hundreds. Besides lecturers, some of whom are part time, the cuts are likely to affect some graduate students who draw salaries for serving as teaching assistants or assistant instructors. In addition, some university staff members already have been dismissed, and more stand to lose their jobs.

The decision was made to cut costs and use the savings to increase salaries of those faculty that are highly regarded and whose pay hasn't kept pace with the market and select female faculty members whose salaries lag behind those of men. According the American-Statesman article raises totaling $6 million will be restricted to tenured and tenure-track faculty members, who make up about two-thirds of UT's faculty. As a group, these professors are the highest-paid faculty members at the university, with full professors averaging $132,253 a year, associates $85,328 and assistants $81,800. Twenty-five to 35 percent of the tenured and tenure-track professors are expected to get raises.

Some of the cuts and proposals being made:

Dean Gregory Fenves stated that The Cockrell School of Engineering has dismissed 13 staff members, mostly in computer-related support roles. The layoffs, coupled with the elimination of 12 vacant positions, freed up $1.6 million - 8 percent of the school's $20 million operating budget - for targeted raises, new faculty members and research support.

The McCombs School of Business plans to lay off 20 people, or 5 percent of its staff, to underwrite faculty raises. The school's budget of about $90 million is projected to remain flat through 2013. But overall expenses tend to rise 2 to 3 percent annually, so additional savings will be sought by combining some billing and other back-office operations, according to Dean Tom Gilligan.

In the College of Communication lecturers and graduate assistants in will be losing their jobs. The number of lost jobs is still being determined by the departments in the college. Faculty in the department were required to submit updated resumes to be considered for salary increases.

The College of Liberal Arts, UT's biggest unit, could eliminate 78 to 300 employees, depending on whether the cuts fall mainly on higher-paid lecturers or lower-paid graduate assistants.

Kevin Hegarty, vice president and chief financial officer, stated for American-Statesman article “While you can always cut some fat, I don't believe there's that much fat to be had. You really have to rethink your core business model, and that's what we're doing."

Reference

Layoffs loom amid UT belt-tightening. (Oct. 4, 2009). Austin American-Statesman. Retrieved October 30, 2009 from
http://www.statesman.com/search/content/news/stories/local/2009/10/04/1004utcuts.html

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