This topic came up at lunch yesterday with Tyler Cowen. Could universities cut costs by firing half of their administrators?
I argued that administrators did not just descend on universities like a plague of locusts. In the economy as a whole, the ratio of middle managers to production workers is rising. You can see this by looking at the ratio of white collar workers to production workers in specific industries, such as automobiles.
In universities, I would argue that the growth in administrators is symptomatic, not an independent cause. The problem is what is known in the software business as scope creep or feature bloat. The more you add features to software, the more complex it becomes, and the harder it becomes to manage. Organizations are the same way.
Universities, like government, add new programs with alacrity, while almost never discarding old programs. Any university today has many more majors, many more activities, and many more technologies in use than was the case 30 years ago.
How do you introduce efficiency and cost saving at universities? Narrow scope and reduce features. Do students choose your school because of the chemistry department? If not, then get rid of it. Better to have three excellent departments than dozens of mediocre ones. Let students take courses on line in the ones that you do not cover.
What if a university unbundled its non-academic activities? Instead of using tuition to subsidize athletics, social events, and clubs, make students pay to participate in each of these activities. My guess is that participation would plummet. Students would find less costly ways to socialize.
If you want to reduce administrative overhead, you have to think in terms of radically reducing scope.
I do wonder how the budget process for these myriad programs affects the number of administrators needed. It’s been my experience that each program has a separate staff. This is probably to ensure that the budgetary expense of staff on the program is separate from other programs. But I suspect this means that brand-new administrative positions are not only required for each new program, but that the approved budget for a program can never be less than a certain number of administrators at some high pay grade. The budget starts out high enough to hire x number of administrators, then never goes away.
Would this picture change if the workload for any new program were added onto existing administrator’s job responsibilities, which (again, in my experience) is what usually happens in a business environment?
Also, this is how bad programs go away in business. No one works on them because they’re not important enough. They shrivel and die.
Beware of “pinning” or “forcing” effects derived from various non-obvious dependency paths.
Examples:
Your mission is to be a complete medical school (says so in the state charter right here), therefore you must have a sound premed program. Therefore you will have chemistry and biology departments. Therefore you will have lab animal welfare monitoring staff, lab staff, lab safety staff, hazardous materials staff. And whole slews of support (facilities, transport, HR)
You will also have facilities for storing dead bodies (used in physical anatomy), and an ethics department.
Or, your mission is to train oil field engineers (see page 4 of the state charter and page 1 of the “why students come here” report) You will, therefore, have welding science, materials science, and hopefully a machine lab. You will therefore have crews of people whose legally or morally mandated jobs are to maintain the function and safety of those labs.
Chasing the dependency graphs for various posts might be eye opening (and not in a good way.) How many of those “middle managers” are required by law, or practically required by honest externally imposed constraints?
Mission creep is surely a source of some bloat, but sometimes the creep comes from more-compelling-than-you-think external sources.
My experience at a private university is that the source of administrative bloat is not new programs, but a huge increase in the provision of services for students. Dean’s offices used to be small affairs, with a dean or two and a few support staff. Now each dean has at least two or three assistant or associate deans, and they are supplemented with additional administrators for tutoring and remediation, for students with disabilities, and for a dozen other forms of student services. I attribute this change to the competition between universities for students–they tell their students that the large staff in the dean’s office is a sign of how much the school cares for their welfare. In this way, bloat is at least in part a form of institutional signaling. At my university there has also been a great increase in the number of non-academic administrators, those who deal with planning, development, the endowment, and so forth. As universities have become more like corporations, they have needed more highly skilled professionals handling their money.
The trend, until recently, was clear: Offer more (though dubiously related to education), and charge more. Parents paid. Some even argued that higher tuition was a form of signalling quality.
Now there is a chance to break the trend. How could a private university (to keep it simple, as public universities also depend on the situation of the state coffers) jointly reduce services and tuition? If we believe the signalling story, say tuition could remain nominally the same, but scholarships and financial aid could increase, reducing the effective tuition paid by the average student (parents).
How can a university convincingly argue they are a better deal? Who will lead?
The forcing function will be the opportunity to offload (academic) costs by switching students to MOOCs. Indeed, any institution that isn’t aggressively trying to work out what its niches will be is whistling in the dark.
The drive to reduce costs has only begun. See the crash in law school applications (to the level of the 1980s) for a taste. Proposals such as turning law school back into an undergraduate degree are popping up all over.
Oddly, it’s admin costs that are harder to cut, because there is no online alternative to provide what admin provides. MOOCs may at least short-term to an increase in absolute and certainly relative admin costs as academic spending shrinks and schools work to administer their students in this new world.
What you have written is basically a brief manifesto for sweeping away the broken higher education bundling model and replacing it with a system that might actually reverse the downward trajectory in non-elite colleges’ value.
As much as I love dear auld ISU and the tradition and the fond memories of my own happy college days, the choices we’re offering young people today are criminally poor and getting worse. And, per the old adage about “if someone owes you a million dollars, that’s your problem,” likely to rebound to all of our misfortune soon.
Can we get started on implementing your suggestions now, please?
In the University world athletics teams are marking, incredibly schools get more applications after a good football season, so that leads to the question why does a state school subsidized by the taxpayers need to market!
Also a personal issue:
I live in the city where the University of Florida is and son got 3 B’s in high school and all the rest were A’s and he scored 1380 on the Math and English SAT portions but he was reject by the University of Florida (UF) but was accepted by the University of Central Florida (UCF). So since he needed to move and get an apartment to go to UCF, where he could have lived at home had he gotten in to UF, it will cost me $50,000 extra to send him to college. He is also farther away which weakens family bonds. So I ask how does it benefit the tax payers to have a difference in who UF and UCF will accept? My thought is that it benefits the administration of UF to become a prestigious school but does not benefit the tax payers.
Oh and one other thing:
When I was in college I worked in the University’s ground department one summer what went on there was amazing to someone who had only worked in the private sector. Most of the workers would ride around most of day, burning gas that they got a University’s gas pumps, doing no work and hiding on the bosses. People would punch in and out for other people. There was this big break room with beds! Nobody worked much and nobody cared. They were way over staffed so an hour or 2 of work in an 8 hour day was enough to keep the lawns mowed and that is about all that they accomplished.