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Business Officer Magazine
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The Faculty Factor

An aging, tenured faculty; few full-time slots; and recruiting challenges.... As these trends evolve, how will American universities fare?

By Mike McNamee

Managing that resource, though, is a growing challenge. An aging faculty—largely recruited to meet the academy’s rapid growth during the baby boom enrollment surge—enjoys lifetime tenure with no rules for mandatory retirement. For the past decade, budget-crunched institutions have increasingly filled classrooms and laboratories with part-time adjunct professors, lecturers who aren’t offered a chance at the tenure track, and research-oriented post-doctoral fellows. And the United States—a magnet for brilliant students from all over the world for the past 60 years—now finds itself increasingly competing with rising academic powers for scholars who relish the opportunity to go home and build new institutions.

All of these changes are happening with little reflection or study. “None of this was planned,” notes Molly Corbett Broad, president of the 16-campus University of North Carolina System (UNC). “It was a series of coincidences.” To start to close that gap, the TIAA-CREF Institute, New York City, sponsored a conference on “Recruitment, Retention, and Retirement: The Three R’s of Higher Education in the 21st Century.” In a first-of-its-kind effort, the two-day meeting brought academic administrators, human resources consultants, and economic and behavioral researchers together to examine the trends that are shaping the academic workforce and how institutions can affect and direct those trends.

Business officers can play an important role in that process. They hold crucial data on pay and benefits that researchers and provosts need to understand what’s happening within campus workforces. Business officers can lend their expertise to help design and evaluate systems and incentives—in hiring, health benefits, and early, phased, or regular retirement—that institutions need to shape the professoriate to meet tomorrow’s needs. “These problems require input from all sides,” says Deborah A. Freund, vice chancellor and provost at Syracuse University, New York. “That means sharing data within institutions—between the business office, the provost’s office, and the researchers in the faculty—and among institutions.”

What’s at stake is nothing less than the stature of American higher education and the future of the American economy. Rapidly growing economies in India, China, and other nations are producing well-educated workers who mount a serious challenge to American labor both through trade in goods and outsourcing in services. The only way for the United States to continue to prosper: “We have to move our workers farther up the value chain to jobs that require increasing levels of education and innovation,” says UNC’s Broad, who gave the keynote address at the Three R’s conference. Already, she told the conferees, “More Americans make computers than make cars; more spend their days processing data than processing petroleum. Knowledge jobs are growing three to six times as fast as economywide job growth.”

But maintaining that pace will place heavy demands on higher education. “We need American universities to remain the best in the world,” says conference organizer Robert L. Clark, professor of economics at North Carolina State University, Raleigh.

Since World War II, this country has indeed dominated higher education. But “having the finest universities in the world is not a natural right for the United States,” says Broad. Higher education leaders must look hard at the trends in their workforce to ensure that unexamined policies and inertia don’t undermine U.S. pre-eminence in education—and threaten the economy’s evolution toward high-value, knowledge-based work.

The Evolving Professoriate

Three trends have come to dominate the workforce in higher education:

The average age of the faculty is rising—particularly the tenured and tenure-track professoriate. Federal legislation in 1994 banning age discrimination outlawed the mandatory retirement age (usually 70) that many institutions imposed on their tenured faculty. The effect is obvious: In 1998, more than half of the instructional staff at degree-granting institutions was aged 50 or older, up from 39.8 percent in 1987, according to the National Center for Education Statistics. Data on the tenure-track faculty in the University of North Carolina system show an even more startling age shift: In 1986, 33.6 percent of faculty were 50 or older; by 2000, that share had risen to 52.2 percent. Among that aging workforce, the share of faculty aged 60 or older rose from 8.8 percent in 1986 to 13 percent in 2000.

Many of these aging professors were hired in the 1960s and 1970s to cope with the flood of new students during the baby boom’s college years. But now they’re clogging the pipeline, in many cases preventing institutions from hiring younger scholars. “The issue is not the quality of senior faculty—many of them are still outstanding teachers and leaders in their fields,” says Clark. “But the academy has to have a diverse faculty—professors in different life stages with different experiences.” The age trends among professors indicate that such diversity is diminishing.

Institutions are hiring more part-time adjunct professors and full-time lecturers who aren’t on the tenure track. Ronald G. Ehrenberg, professor of labor relations at Cornell University, Ithaca, New York, laid out the data: In 1989, 46 percent of all new hires at public institutions were not offered the chance to get on the tenure track; by 2001, the non-tenure-track share of new hires had risen to 51.5 percent. The trend was even more pronounced at independent colleges and universities—non-tenure-track jobs rose from 45.2 percent of all new hires to 57.3 percent. The figures are similar across all categories of institutions, from four-year liberal arts colleges to research universities.

In 1989, public institutions’ part-time instructional workforces were 26.9 percent as large as their full-time professoriates; by 2001, Ehrenberg found, that ratio had risen to 37.7 percent. Independent institutions, which already depended more heavily on part-timers, exhibited an even larger change. Their part-time corps went from 49.9 percent the size of the full-time faculty to 68.6 percent.

The economic reason for these shifts is clear, Ehrenberg wrote in his conference paper: “Four-year American colleges and universities have been able to attract lecturers at salaries that have been falling relative to their tenure-track colleagues’ salaries.” In other words, adjuncts and lecturers are cheaper.

The workforce of research universities contains a growing number of postdoctoral fellows. From 1991 to 2001, the number of postdocs on such campuses rose by 39 percent, accounting for one out of every six Ph.D.s in science and engineering. The reason, according to research presented by Jennifer Ma of the TIAA-CREF Institute, is that new Ph.D.s face “an adverse job market” where faculty teaching positions are increasingly harder to land.

Taken together, these three trends mean that scholarship and teaching are on separate tracks. The changing workforce also appears to be turning the years of study and research needed to earn a Ph.D. into a losing proposition, particularly for American-born students. The rising number of foreign-born graduate students has filled that gap for the past decade or so. But now, UNC President Broad notes, post-September-11 security concerns are making it harder for foreign students to enroll in U.S. institutions, and rapidly expanding educational systems in their home countries are drawing more foreign-born Ph.D.s back to their homelands. “For many years, we were producing many more Ph.D.s than we needed,” says Broad. “But now we have to ask: Is what’s coming out of the Ph.D. pipeline aligned with our future needs?” That question gains urgency as enrollments approach a new peak. “Will our current policies contribute to make the problems in the faculty worse 5 or 10 years out?”

Trying to Shape the Trends

So far, campuses’ attempts to cope with these potentially adverse trends have concentrated on boosting retirement among tenured faculty. The end of mandatory retirement in 1994 hasn’t forced institutions to challenge the basic tenure system as some academic leaders had predicted. But it has fostered experimentation with early and phased retirement plans.

Early retirement—giving faculty incentives, through buyout payments or richer retirement benefits—has had a mixed track record. “Early retirement isn’t turning out to be cost-effective, because you have to pay a professor to leave, then pay someone to do the work she left,” says Clark.

But research by Clark and his North Carolina State colleague Steven G. Allen show that phased retirement—giving a professor incentives to step down his duties, and pay, from full-time to half-time—is paying off for both institutions and faculty. “It provides faculty a good, new benefit, while it provides good value to institution,” Clark says.

In a 2000 survey, the American Association of University Professors found that 27 percent of colleges and universities had phased retirement programs in place. They’re least common, Allen found, at campuses where traditional defined-benefit pensions dominate retirement benefits; they’re more common where a larger share of the faculty has tenure. “Phased retirement plans are not cropping up on a random basis,” Allen says. Instead, they’re serving “as a tool to give management more flexibility to manage a difficult-to-manage workforce.”

Part of that difficulty: “Universities are really subject to the whims of the financial markets,” Allen says. “If everybody’s TIAA-CREF accounts would suddenly go back to the March 2000 level, we’d see a mass exodus of faculty. But right now, no one is in a hurry to retire. The risk to universities is that some of these professors could hang around forever, and the schools could miss out on an entire generation of talent.”

More From the TIAA-CREF Institute

The TIAA-CREF Institute fosters and conducts objective research, builds knowledge, and enhances understanding of strategic issues that impact the business of higher education. Papers from the Three R’s conference are available at www.tiaa-crefinstitute.org.

NACUBO, the American Council on Education, and the TIAA-CREF Institute will present webcasts in late September and October on phased and early retirement, as well as the future of retiree health benefits. Visit www.nacubo.org for details.

In a detailed study of the UNC System’s phased retirement plan, Allen and Clark found that the program was having a significant impact. In the years they looked at, 1997 to 2003, between 25 percent and 35 percent of all retirees were taking the half-time option. Importantly, “the analysis points to earlier exits of faculty who are past their prime,” Allen says. Phasing out a professor doesn’t guarantee savings; much depends on how that professor’s workload is rearranged and how much it costs to fill the classroom vacancy. But a flexible system that lets retiring professors tailor their remaining teaching load—and, just as important, protect their office space, perks, and status—is helping UNC’s 15 tenure-granting campuses retool their workforces.

The Research Gap

Many more such studies are absolutely vital if academic administrators are to understand the changing professoriate and how to manage its transition, says Syracuse Provost Freund. But “academic researchers and practitioners never seem to talk, even when they’re on the same campus,” Freund says.

Instead, business officers and administrators tend to go off campus to benefits consulting firms when they want to know how a planned change in health benefits or retirement incentives will affect their faculty. “We faculty researchers often don’t work fast enough, and we don’t speak the language of business,” admits Freund, herself a health economist. “But as an administrator, I need to make better use of the resources I have on my campus.”

And beyond. One key to better understanding would be for institutions across the nation to pool their data on faculty demographics, benefit programs, and effects of changes in pay, benefits, and retirement incentives. The Three R’s conference was a big step in that direction, says Brown’s Spies. “The juxtaposition of these questions—the mix of recruitment, retention, and retirement—got people talking and thinking of issues in interesting new ways,” he says. “If we can maintain that conversation and be open to new ideas, we’ll all benefit.”

Author Bio Mike McNamee is a Washington, D.C., writer.