TAMU Admin Hiring Freeze Prompted by Comprehensive Review

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COLLEGE STATION, Texas – Texas A&M University System Chancellor John Sharp today announced the results of a comprehensive administrative review conducted by PricewaterhouseCoopers (PwC). The amount of money to be immediately redirected in to academics totaled $7.7 million with a cumulative potential of $203.9 million over the coming five years. The study addressed a growing trend of rising administrative costs in higher education. While the A&M System is well below the national average, those costs have increased 8.4 percent in institutional support, 25.6 percent in student services support and 3.9 percent in academic support over the last three years versus an increase of only 1.9 percent for core mission functions of teaching and research.

“We are aware that non-faculty administrative costs have been escalating across the country in higher education and our costs have been consistent with that trend,” said Sharp. “While we have historically maintained lower total costs in this area as compared to peer systems, it is our duty to ensure we are operating as efficiently as possible in order to meet our mission of excellence.”

This process began in the fall of 2013 and involved over 100 members of faculty and administration from Texas A&M University and A&M System agencies. Hundreds of hours were committed to the assimilation, analysis and discussion of the results. The process was fully collaborative and identified areas for improvement such as identifying 730 non-faculty support administrative positions out of 11,000 (6.6 percent) that may potentially be redistributed to academics. The current annual attrition rate at Texas A&M is 13.7 percent. It is likely that through normal attrition, currently 13.7 percent annually at Texas A&M, and management of currently vacant positions, the recommendations may be achieved. PwC has initiated and completed similar studies with public universities across the US.

“This represents an opportunity for our leaders to reevaluate their ability to focus more resource on their core deliverables of teaching and research while containing other non-core expenses,” Sharp added. “I congratulate the teams that worked with PwC in this landmark review. It was thorough and time-consuming, but more than beneficial to our long term mission.”

It is important to note that this process will continue with a series of collaborative meetings among Interim President Mark Hussey, Vice Chancellor & Dean of Engineering Katherine Banks and Acting Vice Chancellor and Acting Dean of Agriculture William Dugas and their teams to review the results in detail and develop a plan to realize the projected savings. Going forward, faculty, researchers, administrators and other staff will participate in a process to help determine which PwC recommendation will be implemented and the timetable for implementation.

In the immediate term, $7.7 million will be recaptured from open positions along with a hiring freeze on all non-faculty administrative hires except as necessary to meet critical needs, which will be determined by Interim President Hussey. This will allow a reallocation of funds within the university toward the core mission objectives and provide a proper baseline for control while the remaining five-year plans are being developed. As in the prior outsourcing initiatives none of the savings will be allocated to the Texas A&M System, but rather to the university, agency or health science center accruing the benefit.

“I was happy to see that our overall administrative costs compared favorably with our peers. I believe that most cost savings in administrative functions can be obtained through normal attrition. Even though a hiring freeze for some staff positions will be implemented immediately, Deans and Vice Presidents will continue to make key hires with presidential approval,” said Interim President Mark Hussey. “All future savings attained will be used to support our core missions of teaching, research and engagement.”

The comprehensive administrative study included Texas A&M University, the Texas A&M Health Science Center, Texas A&M University at Galveston, seven A&M System state agencies and two service units. It should be noted that the non-faculty administrative hiring freeze includes all units who were involved in the study. In all units, either Dr. Hussey, Dr. Banks, or Dr. Dugas will be responsible for approving any identified critical hires. The next phase of the audit will include regional A&M System universities who will be under a similar hiring freeze that requires the respective presidents to approve any changes. Both hiring freezes at the university and agencies and at all regional universities are effective today. It should be noted that the Texas A&M System has operated under a similar process since Chancellor Sharp was appointed in September of 2011.