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Finding a Path to HR Savings

University Business, June 2012

The fact that every campus has a human resources department could lead to inefficiencies within large university systems. Or at least that’s how officials at the University of California saw it. The system is consolidating routine payroll, benefits, leave management, and workforce administration functions from across 10 campuses at a single location near the Riverside campus.
The UC Path project (Payroll, Academic Personnel, Timekeeping and HR) is part of the “Working Smarter” initiative, which has the goal of redirecting $500 million from administrative costs back to campuses within five years.

Technology use and head count reduction are expected to result in savings of $100 million once the center is fully operational. “Savings of this magnitude will allow us to redirect resources to our core academic mission of teaching and research,” UC Riverside Chancellor Timothy White said during a press conference about the project. “It will also allow us to keep costs as low as possible for students and their families.” As part of the project, the institution is moving from a legacy mainframe payroll system to a PeopleSoft system.

“Right now about 6,000 people in the system have some part of the payroll and benefits function as part of their job, and they are operating with about 11 different technology systems,” explains spokeswoman Kris Lovekin. “Instead, we will have one center of about 600 employees and one technology system.”

Head count reduction is coming through attrition as people retire or otherwise move on. Existing staff will have the option of training for other duties on their existing campus or applying for a position in the new UCPath center in Riverside.

A call center will be part of the new location resulting in many routine HR functions being handled online or over the phone.
“Parts of HR that must stay on each campus will still be located locally. For instance, employee recruiting and orientations must take place on each campus. Labor relations still must take place on each campus,” Lovekin says.

UC Consolidation By the Numbers
 Estimated jobs created in Riverside:  600
 Number of HR systems being replaced:  11
 Estimated annual savings on technology:  $30 million
 Anticipated annual savings at full implementation:  $100 million
 Estimated annual costs to implement:  $25 million