Friday, November 27, 2009

More On Executive Growth

In a series of studies on administrative growth, Charles Schwartz has discovered some important facts that explain why and how administrators reproduce like rabbits. The first finding concerns the growth in the number of administrators in the UC system: “Administrative growth is not unique to UC, but the rate of growth is higher at UC than most public or private universities. In 2006, in public universities across the country, 49% of the professional full-time employees, excluding the medical school, were faculty members. At UC that percentage was about 25% . . . In 1997, there were almost 2 faculty to every Executive and Senior Manager; by 2007 the numbers are nearly the same for both groups, while the Middle Manager group steadily grows higher.” The finding here is that the growth rate of administration in the UC system is way above average; moreover, administrators are increasing at a much higher rate than the number of faculty in the UC system.

The next major finding concerns the question of how much this exessive growth in the administrative ranks costs and who pays for it: “Execs and Managers receive additions to their regular pay called above or non-base-pay, but because of the high growth of admin. FTE, there are no unfilled FTE and merit slots to fund above-base-pay. Funding comes largely from Core Funds (student tuition and fees, state appropriations). . . Auditors reported that UC paid $11.3M in Above-Base-Pay Additions to Regular Pay in 2004-05, with about $9M coming from core funds and $2.3M from federal and other grants and contracts, endowments, and auxiliary operations (CA State Auditor Report 2006-103).” In other words, student fees and state funds are paying for the increased compensation and growing number of UC administrators. This means that part of the push to raise student fees and eliminate jobs and courses comes from the need to pay the growing army of administrators.

Schwartz has also examine the cost and rate of administrative growth on particular campuses: “UCLA has the smallest increase in overall employment (3%) and also the smallest increase in student enrollment (17%); yet its administration has increased significantly (about 50%) with a wastage that we estimate costs $54 million per year, second only to Berkeley.” As Schwartz shows, at UCLA and Berkeley, the increase in administration is far outpacing the increase in students and the increase in all other categories of employment. In other words, we can assume that student fees and state funds are going into administration instead of instruction.

In Schwartz’s study of the rate of administrative growth in the period of 1996-2006, we find that the biggest increase came in the following job titles: “Computer Programming & Analysis – from 2,084 to 4,325 for an increase of 108% and Administrative, Budget/Personnel Analysis from 4,692 to 10,793 for an increase of 130%.”
Schwartz explains this growing group of middle-management bureaucrats by arguing that, “these positions (F20) seem to be the top level of support staff for the University’s administrative officials. Bureaucratic accretion is the name given to the process whereby administrators proliferate themselves and expand their dominions. The growth rate of this F20 group is huge, comparable to that of the Management group. . . administrators and executives tend to make work for each other, and that because executives prefer to have subordinates rather than rivals, they create and perpetuate bureaucracies in which power is defined by the number of subordinates.” According to this theory, the growth in administrators can be explained by the desire of managers to have more subordinates and fewer rivals.

To calculate how much this administrative bloat costs the university, Schwartz compared the average increase in positions for all employees and then determined the cost for abnormal rate of increase for administrators, and he found that the total extra cost is close to $600 million per year. If we want to help UC find alternative budget solutions, the place to start is here: we need to rein in the costs of excessive administrative and bureaucratic growth.

12 comments:

  1. To the best of my knowledge, Pres. Yudof and his lieutenants have offered no rationale for this unprecedented growth in the numbers of high level administrators. Have I missed something, or is there no official explanation?

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  2. The increase in students (17%) compared with increase in administrations (50%) seem like an absurd trend. This trend combined with the decrease in numbers of courses offered prove to be even more unreasonable. I agree that the resources are perhaps being shifted from education to categories less associated with qualities of education, most likely being administration costs.

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  3. To have a manager for every employee is a terrible business practice. Matching overseers with the number of employees actually working to the university's goal (providing an education) quickly burns money unnecessarily and is simply waste. The increase in computer hiring makes sense to me; this was a time period when many operations were digitized. The increase in Budget/Personnel Analysis, however, is simply ridiculous. How many people do they need to hire to analyze the spending and realize that hiring this many people to analyze these things is a problem? I'm afraid that for the sake of their own job security, this conclusion is virtually unreachable (by these employees).

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