TIGHTER BUDGETS. CUTS TO PROGRAMS. LAYOFFS. Frozen salaries. The list goes on and on as to how colleges and universities are being affected by the country’s recession.
No one seems immune from the economic pain. When the National Association of Independent Colleges and Universities surveyed 371 private institution presidents in late 2008, half reported a hiring freeze, and 22 percent froze salaries. Another 42 percent gave smaller than usual salary raises. Eleven percent laid off faculty, and 16 percent laid off nonfaculty. Seven percent cut salaries and benefits.
Public institutions aren’t fairing any better. “Many institutions are scrambling to meet current year budgets by freezing or significantly limiting hiring [and] limiting or eliminating temporary employee budgets,” says Andy Brantley, president and chief executive officer of CUPA-HR (College and University Professional Association for Human Resources), adding that he’s seeing some layoffs as well.
The future seems dismal. But not everyone is looking at it that way. Some human resource departments at higher ed institutions are taking advantage of the struggling economy by testing more effective programs and delivery systems.
So no more bad news—at least, not in this two-part column. Here’s how HR professionals are improving their schools in the midst of a deteriorating economy.
J.J. Davis, vice president of administration, which oversees HR, at the University of Delaware, doesn’t need a crystal ball to peer into the future. The state government is facing a huge shortfall, and the school receives approximately 20 percent of its funding from the state. Her gut instincts predict a 5 percent budget cut for 2009-2010. So HR at the university, which has 4,000 employees, is in the process of playing out different “what-if” scenarios.
For example, what if some paper-driven processes were automated? What if trainers worked with larger classes? What if people moved from being transaction-oriented to being problem solvers? “I sort of have the perspective that everything’s on the table, everything’s fresh,” Davis says. “In my view of the world, [nothing] is sacred. You work systematically through what are essential operations, what is very important versus nice to have. If you say, ‘This is off the table,’ then you really don’t drive innovation or efficiency.”
One change under consideration is using existing faculty or staff to train the university’s employees as needed instead of hiring outside trainers. Classes could focus on anything from CPR to management skills. Davis says that many employees are stepping forward, revealing skills that could be applied outside their jobs.
Another area is recruiting. It used to be a very decentralized process, with each dean developing separate marketing and hiring materials and then paying for off-site printing. Now standard materials are being created and posted online. Davis’s team is also exploring ways to “create more synergies” between student and employee programs that address the same issues or provide similar services. For instance, could employee and student wellness programs cross lines yet still be effective?
As of late December, Davis said she had no plans to eliminate HR programs or lay off staff. Her quest is informal, initially focusing on creative ways to maximize the value of current employees. She solicits ideas and opinions from her own staff and others about their impression of HR , what drives them crazy and what areas need improvement. “It’s always challenging at first, but good leaders rise to the challenge and find opportunities within it,” she says. “It allows you to ask the tough questions, to work with your team, saying, ‘Wipe the slate clean,’ and [to] probe in-depth about whatever you’re doing and how are you doing it.”
With more than 500 full- and part-time employees, Alamance Community College (N.C.) just received a 3 percent budget cut, reports President Martin Nadelman. But every action has an opposite reaction. Student enrollment is “bursting at the seams,” he says, adding that it rose by 10 percent this past fall. He believes out-of-reach university tuition is actually driving more students to his school and other community colleges nationwide.
Still, the school may not see a dime of that increase, since the state collects its tuition. “The fact that our enrollment growth is higher than the state average will probably be helpful to us,” Nadelman says. “As long as the state gives us increases for enrollment growth, we’ll be OK.” Those schools with less than average growth will be hurting more, he adds.
To keep enrollment growing and potentially minimize budget cuts across the board, not just for HR, the college designed a new course called Career Transitions. Offered through continuing education, the 100-hour course teaches unemployed workers new skills, such as computer and resume writing, and helps them transition into new careers. “A lot of people had a mindset that they were going to retire in two years,” says Nadelman. “All of a sudden, that mindset changed. Colleges need to work with them saying, ‘It’s not [necessarily] a bad thing.’”
The recession has made its mark on The University of Tennessee Health Science Center in Memphis, a state-funded school with more than 2,700 employees that must now closely monitor every new hire, says Jerry Hall, director of HR. “We’ve had to take a very different view of not hiring as many individuals because the money just isn’t there. Our budget cut looks to be around 15 or 20 percent.”
HR administrators have gone back to the drawing board, evaluating all department programs, including employee reward and recognition programs. Up to now, employees with more than 20 years of service have attended a luncheon and could select a gift from a catalog. Then there’s the annual employee appreciation day, which costs roughly $20,000, he says. HR leaders realize the importance of recognizing employees but are searching for a more cost-effective approach to delivering the same message and value.
But HR goes to the head of the class for creating a temporary help pool of roughly 45 people who range from groundskeepers to child training assistants.
In the past, various departments used temporary staffing agencies, paying them approximately $30 an hour per worker. Hall says each of those workers received approximately $10 an hour and the agency kept the remainder. Now, each department pays HR $15 an hour per temporary worker. Those employees typically receive between $10 and $13 an hour while HR keeps the rest, which helps boost its own coffers.
In addition, the pool solves a labor problem for HR: what to do with retired workers interested in part-time employment—such as “those who have retired from the university who aren’t quite ready to throw in the towel,” says Hall. “They just want to work part-time. They know the institution.” Another area being explored includes a nonpaid furlough for senior administrators.
In November, HR also helped set up UTalk, a program that encourages employees to e-mail cost-cutting suggestions directly to the school’s president. So far, hundreds of responses have been received, reports Hall.
He notes that HR needs to promote top-down meetings with senior management and remaining staff so that everyone understands how budget cuts are affecting the school, each department, and their own jobs. “It’s kind of like a marriage. You have to communicate,” he explains. “Worker bees need to know these are hard times, that HR is looking at different avenues.”
Funding for the College of Southern Idaho comes from three sources: the state, property taxes, and student enrollment fees. For 2009-2010, the college is facing a $2 million budget cut, says Monty Arrossa, the college’s HR director.
To deal with the reduction, his team has implemented a 90-day hiring freeze for its approximately 1,200 workers and is exploring ways to maximize staff skills. For example, instead of each department having its own part-time office specialist, one person may rotate between several different departments.
Likewise, the college has a lofty student enrollment goal: increase by 25 percent this year, from 7,500 to 10,000. HR is training all employees to serve as campus recruiters by educating them on the college’s benefits and programs. “We’ve been really hitting this pretty hard,” Arrossa says. “This campus initiative goes from our janitors all the way to our president. Every person here is a recruiter.”
To accommodate the influx of students, he says that the faculty has also agreed to increase class sizes by 10 percent. Specialty programs that meet local community needs are also being offered, such as a wind energy course that trains students on how to operate and repair wind turbines.
“We’re asking people to be even more mindful about budgets,” he says, adding that the college is adopting a zero-based budgeting system. “We’re doing everything we can not to participate in the recession.”
How is HR helping your school thrive, not just survive, in these tough economic times? Here’s a chance to boast about your creative programs and accomplishments. Write to email@example.com by March 13.
Carol Patton is a Las Vegas-based freelance writer who specializes in covering HR issues.
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