Update  on  UW  Faculty  Reten1on:  Scenarios  for  Increasing  UW  Employee  Salaries  

 July  17,  2013  

UW  Board  of  Trustees  Retreat    

Carol  Frost  Nicole  Ballenger  Associate  Provosts  

Goal  (UP3  Ac,on  Item  65):  “Faculty  salaries  at  or  above  the  fiAieth  percen,le  of  those  prevailing  at  public  research  universi,es.”    

Outline  1.  Update  on  UW  faculty  aEriFon  2.  A  history  of  UW  faculty  salary  adjustments  3.  Scenarios  for  bringing  UW  salaries  up  to  the  average  

of  other  public  research  universiFes  4.  An  evaluaFon  of  revenue  sources  

1  

1.  UW  Faculty  AEriFon    •  We  are  losing  strong  faculty  members  at  an  accelera4ng  rate  

Chart  1.  Faculty  departures  since  last  raises  were  issued  (2009),  not  including  reFrements  or  deaths.  

                     

•  In  2013,  faculty  announced  departures  for  posiFons  at  insFtuFons  including  U.  Calgary,  Purdue,  U.  Arizona,  U.  Memphis,  U.  Missouri.,  N.  Carolina  State,  N.  Carolina  A&T,  US  AEorney’s  Office,  Texas  Tech,  Texas  A&M,  U.  Idaho,  U.  Utah,  Howard  University,  Kansas  State,  U  of  Western  Sydney  Australia,  George  Washington  U.  

•  Number  deparFng  would  have  been  higher  if  not  for  aggressive  counter-­‐offers  in  the  last  year  to  7  high-­‐performing  faculty  whom  we  retained.  

•  Counter-­‐offers,  mandatory  promoFon  raises,  and  augmentaFons  for  department  heads  reduce  the  funds  for  hiring  new  faculty,  resulFng  in  net  losses  in  faculty  size.  

2  

Data  source:  UW  Office  of  Academic  Affairs  

0  

10  

20  

30  

40  

2009   2010   2011   2012   2013  

#  of  dep

artures  

2.  History  of  UW  faculty  raises    •  At  no  4me  in  the  past  20  years  have  UW  faculty  gone  so  

long  without  salary  adjustments  –  Raises  granted  in  11  of  the  past  20  years  for  an  

average  annual  raise  pool  of  2.74%  –  No  raises  for  the  past  4  years  –  This  is  the  longest  Fme  in  at  least  20  years  without  a  

raise    

Chart  2.  20-­‐year  history  of  UW  faculty  salary  adjustments.  

3  

Faculty  raises  are  awarded  on  merit,  a  por,on  of  the  raise  pool  is  used  for  mandatory    raises  and  addressing  equity  issues.  Data  source:  UW  Office  of  Academic  Affairs  

0  2  4  6  8  10  12  14  

Percen

t  Raise  

Notes:  2001:  Pool  equivalent  to  $1500  per  full-­‐Fme  employee  was  distributed  on  merit  2006:  In  addiFon  to  the  3.5%  raise  pool,  $2.96M  was  allocated  to  senior  faculty  retenFon  2013:  1%  bonus  up  to  $1200  granted  to  all  employees  with  saFsfactory  job  performance  

3.  UW  employee  compensaFon  scenarios    •  Raises  are  essen4al  to  bring  salaries  towards  market  

average  –  Progress  was  made  during  4  years  of  raises  2006-­‐2009  –  UW  salaries  have  lost  ground  compared  to  other  

universiFes’  salaries  in  the  four  years  with  no  raises  

4  

-­‐13  

-­‐10  -­‐9  

-­‐7   -­‐7  -­‐8  

-­‐11  

-­‐11  -­‐12  

-­‐14  

-­‐25  

-­‐20  

-­‐15  

-­‐10  

-­‐5  

0  

2006  

2007  

2008  

2009  

2010  

2011  

2012  

2013  

%  below

 market  a

verage  

OSU  

50  PRU  

Market  average  

OSU  =  Average  of  all  insFtuFons  surveyed  by  OSU  50  PRU  =  50  Public  Research  UniversiFes  

Data  source:  UW  Office  of  Ins,tu,onal  Analysis  

Chart  3.  UW  faculty  salaries  compared  to  OSU  and  50  PRU  comparators.  

UW  salaries  compared  to  market  average  for:  

3.  UW  employee  compensaFon  scenarios    •  It  doesn’t  pay  to  wait  to  aBack  this  problem  

5  

Inputs:  •  Faculty  market  average  based  on  comparison  of  50  Public  

Research  UniversiFes;  UW  faculty  is  14%  below  market  average;  all  UW  employees  are  at  12.5%  below  market  average  

•  InflaFon  rate  (average  of  last  10  years):  2.5%    Outputs:  •  $23.6M  is  required  to  bring  salaries  to  market  in  FY13  •  $29.1M  is  required  to  bring  salaries  to  market  in  FY14      

180  

190  

200  

210  

220  

230  

240  

250  

FY13   FY14   FY15   FY16   FY17   FY18  

$  (M

illions)  

UW  Sec,on  I  employee  compensa,on    

Amount  needed  to  offer  UW    employees  market  salaries  

$29.1M

 

$23.6M

 

Growing  gap  between    UW  salaries  and  market  

Data  sources:  UW  Office  of  Ins,tu,onal  Analysis;  UW  Budget  Office  

Chart  4.  UW  SecFon  I  salary  budget  compared  to  market.  

Scenario  1:  4  years  to  market  average    •  It  would  take  $13.0M  addi4onal  each  year  for  4  years  to  

reach  market  average  ($26.0M  addi4onal  per  biennium).  

6  

Data  source:  UW  Budget  Office  

180  

200  

220  

240  

260  

280  

300  

FY13   FY14   FY15   FY16   FY17   FY18   FY19   FY20   FY21   FY22   FY23  

$  (M

illions)  

EsFmated  market  salaries  and  EPB,  adjusted  for  2.5%  inflaFon  4  year  budget  plan  

Chart  5.  Scenario  to  bring  UW  compensaFon  to  market  average  in  4  years.  

Scenario  2:  9  years  to  market  average    •  It  would  take  $17.2M  addi4onal  each  biennium  for  9  

years  (4.5  biennia)  to  reach  market  average  

7  

Data  source:  UW  Budget  Office  

Chart  6.  Scenario  to  bring  UW  compensaFon  to  market  average  in  9  years.  

180  

200  

220  

240  

260  

280  

300  

FY13   FY14   FY15   FY16   FY17   FY18   FY19   FY20   FY21   FY22   FY23  

$  (M

illions)  

EsFmated  market  salaries  and  EPB,  adjusted  for  2.5%  inflaFon  9  year  budget  plan  

4.  Sources  of  funding  

 •  Could  UW  find  between  $17  and  $26M  in  recurring  funds  

each  biennium?    

Sources  of  funding:  ü  LegislaFve  appropriaFon  ü  ReallocaFon  of  UW  block  grant  ü  TuiFon  increases  

ü  Legisla1ve  budget  request:  –  Each  1%  raise  for  UW  secFon  I  employees  requires  

$1.7M  in  new  funding  (all  raises  are  distributed  on  merit  basis)  

ü  Realloca1on  within  UW  budget:  –  If  UW  budget  were  not  cut  by  a  further  $11.7M/

biennium,  some  or  all  of  that  amount  could  be  reallocated  to  salaries  

ü  Tui1on  increases:  –  UW  tuiFon  is  lowest  of  all  public  doctoral  insFtuFons,  

so  1%  increase  raises  only  approximately  $0.5M/year  

8  

TuiFon  &  fee  increases  over  the  past  20  years:  1.  Percentage  increases  

9  

Chart  7.  Percentage  increases  in  UW  resident  undergraduate  tuiFon  &  fees  

•  Over  the  past  20  years,  UW  tui4on  &  fee  increases  have  ranged  from  0%  to  16%  per  year.  The  history  is  erra4c.  

 

Data  source:  UW  Office  of  Ins,tu,onal  Analysis;  Savingforcollege.com;  FinAid.org  

0  2  4  6  8  10  12  14  16  18  

%  increase  in  re

side

nt  

tui1on

 per  year  

•  Since  we  are  looking  at  possible  revenue  to  fund  salary  increases,  it  is  more  helpful  to  look  at  the  dollar  amount  of  tuiFon  increases,  not  percentages.  

 

2012-­‐13  tui1on  increase  

Average  annual  increase,  last  10  years  

UW   3.7%   3.6%  

All  public  universiFes  

4.8%   6%  

•  UW  tui4on  &  fee  increases  are  less  than  na4onal  averages.    

TuiFon  &  Fee  increases  over  the  past  20  years:  2.  Dollar  amount  of  tuiFon  increases  

10  

•  Over  the  past  20  years,  UW  tui4on  and  fee  increases  have  ranged  from  $4  to  $260,  not  per  credit  hour  but  in  total  for  the  year.  

 

Data  source:  UW  Office  of  Ins,tu,onal  Analysis  

$  0    $  50    $  100    $  150    $  200    $  250    $  300    

$  increase  in  re

side

nt  

tui1on

 per  year  

0    100    200    300    400    500    

$  increase  in  2013  

dollars  per  year  

•  In  infla4on-­‐adjusted  terms,  annual  UW  tui4on  and  fee  increases  have  been  as  high  as  $410,  but  far  less  in  recent  years.  

 

Chart  9.  InflaFon-­‐adjusted  $  increase  in  UW  resident  undergraduate  tuiFon  &  fees  

Charts  8.  $  increase  in  UW  resident  undergraduate  tuiFon  &  fees  

TuiFon  &  Fee  increases:  3.    What  is  reasonable?  

11  

•  In  inflaFon-­‐adjusted  terms,  past  UW  tuiFon  and  fee  increases  have  been  as  high  as  $410/year.  

•  An  increase  of  $440/year  in  resident  undergraduate  tuiFon  would  be  equivalent  to  a  10%  increase.  

•  Such  an  increase  would  bring  in  $5M/year  in  addiFonal  revenue.  Two  such  annual  increases  would  generate  $10M/year  by  the  end  of  a  biennium.  

 

12  

Summary  of  revenue  sources    for  salary  increases  

Revenue  needed  

Revenue  sources  

Amounts  possible  

$17-­‐26M  per  biennium  

LegislaFve  request  

$0-­‐?M  

Internal  reallocaFon  

$0-­‐12M  

TuiFon  increases  

$0-­‐10M  

BIENNIAL  TOTAL   $0-­‐22+M???  

Repeated  increases  of  this  magnitude  are  required  for  the  next  two  to  five  biennia  to  bring  UW  salaries  to  the  average  of  market.  

5.  Concluding  observaFons  

•  The  problem  gets  worse  fast  if  we  wait  •  It  will  take  strong  will  to  find  enough  money  •  If  UW  is  to  be  a  top-­‐1er  land-­‐grant  and  flagship  

university,  we  must  do  everything  possible  

13  

The  mind  does  not  require  filling  like  a  boUle,  but  rather  it  requires  kindling  to  create  in  it  an  impulse  to  think  independently  and  an  ardent  desire  for  truth.    

                 Plutarch,  Περὶ  τοῦ  ἀκούειν  τῶν  φιλοσόφων  

 

14  

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50#Public#Research#Universities

Appendix:  Comparator  InsFtuFons    50  PRU:  

OSU:  114  insFtuFons  surveyed  by  OSU,  including  insFtuFons  in  the  following  Carnegie  classificaFons:  •  Research  University/Very  High  Research  AcFvity  •  Research  University/High  Research  AcFvity  •  Doctoral/Research  University  and  Other