Two-thirds of private colleges plan to freeze salaries and 53 percent are cutting benefits, according to results of a survey released on Wednesday by Yaffe & Company, a consulting firm specializing in executive compensation and governance.
The survey, which was conducted in June, generated responses from 259 private colleges in 39 states. It found that of those planning to freeze base pay, 80 percent were doing so institutionwide. About 9 percent reported plans to reduce pay, with 64 percent of those cuts hitting all employees.
Rian M. Yaffe, the firm's chairman and chief executive, said he was surprised that a majority of the colleges surveyed had trimmed or planned to trim their employee-benefit programs. Mr. Yaffe, whose firm consulted primarily with hospitals and health-care systems before branching into higher education in recent years, said benefits such as employer contributions to retirement savings plans had long been considered "sacrosanct" in higher education.
But benefits are no longer off-limits for colleges, according to the study. Of the 53 percent that are making cuts, one-quarter planned to reduce or eliminate contributions to 401(k) or 403(b) savings plans. Other cuts included having employees pick up a larger share of health-benefit costs (27 percent) and a reduction in the number of health-benefit plans offered (8 percent).
Those cuts indicate that colleges are "really under intense stress," Mr. Yaffe said.
The survey also looked at how colleges determine incentive-pay awards. A sample of its findings can be found on the firm's Web site.
Comments
1. 11152886 - August 13, 2009 at 10:02 am
Yes, retirment benefits were sacrosanct for good reason. Salaries are not that great to begin with in relation to other kinds of employment. It will be demoralizing for faculty to focus on one job as colleges cut retirment benefits. Will instructors start moonlighting to build a retirement and pay their health benefits? We say that we value higher education in this country, but obviously support is eroding.
2. utepdevelopment - August 13, 2009 at 10:38 am
The article does exactly reflect the actual report which shows in the pie chart that 24% of schools are providing increases to 87% of their employees. Nine percent are reducing wages, and 67% are freezing them.
3. smcdonald999 - August 13, 2009 at 11:29 am
Faculty demoralization is long over due. Everyone needs to feel the disasterous effects of run-away spending on the economy. It's the only way we can learn to live within our means. That especially means less retirement benefits FOR EVERYONE. The model of paying healthy, productive people to take the rest of their lives off is obsolete. Longer life spans means more opportunities to participate as a productive, engaged members of society. We need to obliterate the concept of retirement and start the lanauge of adjusting work loads to accomadate diminshing capacity.
4. jaysanderson - August 13, 2009 at 12:01 pm
I wish that our salaries were only frozen--our private (and formerly prosperous) college took a 5% pay cut across the board, insurance increased $100 per month and contributions to retirement to zero. This academic career thing is proving to be quite the strategic move on my part. There have been layoffs, as well. What did our esteemed President say about the cuts? "I want to assure everyone that this college has been in operation for 150 years and, with or without us, it is likely to continue...in some form". Wow.
5. sbaron33 - August 13, 2009 at 01:30 pm
mcdonald999 - "faculty demoralization is long overdue"? You have it completely backwards - no one should have to feel the effects of the scenario of no government oversight of an industry based on greed and over-expenditure. If there are no retirements where will the jobs be for younger workers? Having an older workforce that sees attrition only by death is a chilling picture, and an older workforce is apt to be less flexible with fewer risk-takers and be more apathetic. Besides, who is this mythical "EVERYONE"? The people who have the means to do so will still retire while everyone else will continue to trudge along at lower paying jobs where the incentive to work diminishes. When is demoralization or a productive or positive thing? Many people, those who have a life of the mind are not taking the rest of their lives off, Sonny Jim, especially those to whom research and creative activities are not simply assignments handed out by deans, but an actual fulfilling life