Faculty Recruiting and Retention at the University of California

Faculty Recruitment and Retention at the University of California MAC TAylor • le g i s lA Ti v e A nAl y s T • D eCeMBer 13, 2012 An LAO RepOR t 2 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t ExECUtivE SUmmaRy Ladder-Rank Faculty at the University of California (UC). In 2010-11, UC spent about $1.8 billion on salaries and benefits for its ladder-rank faculty. These faculty make up just over half of UC’s total 15,900 full-time equivalent (FTE) faculty workforce. They are distinct from other faculty in that they (1) are tenured or tenure-eligible and (2) have a full range of teaching, research, and public service responsibilities. For these reasons, these faculty generally are considered to be the university’s core faculty at the ten UC campuses. In this report, we assess UC’s ability to recruit and retain these faculty. Major Findings on Faculty Recruitment and Retention. We requested from the university data through 2010-11 or 2011-12 (the most recent years available) on several faculty recruitment and retention indicators, as well as faculty compensation. Our major findings include: • UC Hiring From Among Best Faculty Candidates Available. Over the last decade, faculty hired by UC have received their highest degree (typically the doctoral degree) from some of the most selective universities in the nation. For example, about one in five new UC faculty received their highest degree from four of the most selective universities—Stanford, Harvard, the Massachusetts Institute of Technology (MIT), and Yale. • UC Has Long History of Hiring Top Choice Faculty Candidates. For nearly two decades through the mid-2000s, UC in most years was able to hire its top choice faculty candidate at least 85 percent of the time. Though UC stopped collecting this data centrally after this time, the fact that UC’s recruitment efforts do not appear to have been hindered during previous economic recessions and budget shortfalls suggests that the recent recession might not have had a particularly pronounced effect on UC’s recent recruitment efforts. • Less Than 2 Percent of Faculty Resign Each Year. Over the last decade, UC has been retaining nearly all faculty, with less than 2 percent of faculty resigning from the university each year. (This figure excludes faculty who retire from the university or leave for other causes such as death or disability.) • Most New Entry-Level Faculty Stay at UC Long Enough to Earn Tenure. The university in recent years typically has been able to retain over two-thirds of entry-level faculty until they receive tenure, which typically takes about eight years. In contrast, only 10 percent of these faculty tend to earn tenure and then leave the university within their first eight years. • UC Faculty Compensation Competitive With Top Universities. Over the last decade, average faculty salaries have been higher at UC than at four public institutions with which the university compares itself, while they have been lower than at the four private comparison institutions. Taking total compensation into account, however, UC has been competitive with the average for all of its comparison institutions. Moreover, in the past most faculty who rejected job offers from UC or who left the university report that they did so for reasons other than salary. www.lao.ca.gov Legislative Analyst’s Office 3 An LAO RepOR t Implications for State Budget Decisions. Based on our review of available data, UC generally appears to have been successful in its faculty recruitment and retention efforts. Nonetheless, the university’s budget plan for 2013-14 assumes increases in faculty salaries. The university’s budget plan also assumes increases in state funding to cover these faculty salary increases and various other university priorities. In particular, UC’s budget plan assumes additional spending to increase student enrollment and reduce student-to-faculty ratios (both of which require additional faculty), as well as to cover the increased costs of its pension benefits (which support faculty and other employees). In light of the many indicators suggesting UC has been successful in recruiting and retaining faculty, coupled with the continuing need to prioritize limited state funding, the Legislature will need to assess the relative trade-offs between providing funding for faculty salary increases and other competing budget priorities involving faculty and higher education more generally. 4 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t intRodUCtion In 2010-11, UC spent about $1.8 billion on the university’s ability to recruit and retain salaries and benefits for its tenured and tenure- high-quality faculty. First, we provide background track faculty. These faculty are central to fulfilling information on faculty. Next, we examine data the university’s teaching, research, and public from recent years on faculty hiring and retention service missions. Given the significant amount patterns as well as faculty compensation. Finally, spent on these faculty, as well as the importance we discuss the implications of our findings for the of the university’s mission, this report examines Legislature as it considers the university’s budget moving forward. BaCkgRoUnd Graphic Sign Off Types of Faculty. In 2010-11, the university For these reasons, we focus exclusively on Secretary employed 15,900 FTE faculty. The university ladder-rank faculty in this report and, when we use Analyst divides these faculty into different classifications, the term “faculty,” we are referring to “ladder-rank depending on their specific job responsibilities faculty” (unless otherwise noted). Director and terms of employment. As shown in Figure 1, Faculty Ranks. Like most other research Deputy just over half (about 8,900 FTE) of all faculty are universities, UC’s faculty job classification includes classified as ladder-rank. These faculty generally three levels (more commonly known as “ranks”): are considered to be the university’s core faculty Assistant Professor, Associate Professor, and at the ten UC campuses. They cover all disciplines, Figure 1 including the health Most UC Faculty Are Ladder-Rank sciences. They also Fall 2010 make up a majority of the Academic Senate, which sets academic policies. Ladder-rank Clinical and Other Faculty faculty are distinct from other faculty in that they (1) are tenured or tenure- eligible and (2) have a Adjuncts/ Ladder-Rank Professional Practitioners full range of teaching, Visiting research, and public service responsibilities. In Lecturers contrast, other faculty are not eligible for tenure and typically have a narrower range of responsibilities. www.lao.ca.gov Legislative Analyst’s Office 5 ARTWORK #120392 An LAO RepOR t Professor. The Assistant Professor position is an general campus faculty actually earn more than entry-level, two-year contract position that may be the maximum for their step/rank (on average about renewed for a maximum of eight years. After eight $19,000 more). Faculty are not unionized, except at years, an Assistant Professor must have earned one campus (Santa Cruz). tenure or the university discontinues employment. Faculty Benefits. The university provides (Since Assistant Professor positions offer this faculty with a number of benefits, such as for health path to tenure, they are known as “tenure-track” care and pensions. The university estimates that positions.) In contrast, the more senior positions the cost of these benefits for a faculty member is of Associate Professor and Professor are tenured, equal to about one quarter of their pay. Though the permanent positions. The university may only types of benefits faculty receive tend to remain the discontinue employment of these professors with same from year to year, the specific terms of certain good cause, and, in practice, this happens rarely. benefits sometimes change. For example, the Faculty Salaries. For faculty in most university has increased employee contributions disciplines, the university uses the faculty salary to its pension plan in recent years due to a funding system summarized in Figure 2. Under this system, shortfall. each faculty rank has a certain number of steps Spending on Faculty. In 2010-11, UC spent a associated with it. Each step then corresponds total $1.8 billion on salaries and benefits for faculty. to a specific salary. For example, at the Associate As shown in Figure 3, nearly three quarters of Professor level, the salary at the bottom step is the funding for faculty compensation came from $68,100 annually, while the salary at the top step is the state. The remaining funding sources include $86,200 annually. The university has a merit review a mix of federal funds, sales revenues (such as process that allows faculty to receive raises by from clinical services provided at the university’s advancing to higher steps and ranks. In some years, medical centers), private gifts, student tuition, and the university also provides all faculty with raises other funds. (Though student tuition makes up by increasing the salary paid at each step—intended a relatively small portion of funding supporting to address inflation and/or make its salaries faculty, the university could use more tuition more competitive. In addition, the university revenue in lieu of state funds since the two fund allows faculty to receive raises in certain other sources are interchangeable.) In addition to these circumstances—such as when a faculty member personnel expenses, the university incurs other receives another job offer. Because the university costs to support faculty, such as for facilities and allows for such exceptions, about two-thirds of equipment. majoR FindingS The recruitment, retention, and compensation was available from UC on several key recruitment data that we examine below comes from UC’s and retention indicators, although we were central office. Some individual campuses collect unable to obtain information on a few important additional data, but we focus on systemwide trends indicators, such as the number of vacant faculty since the state generally focuses its policy and positions. For the most part, the data includes all budget decisions on the university as a whole. Data ladder-rank faculty, except in certain cases, where 6 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t the university excludes Figure 2 faculty in the health UC Faculty Salary Systema sciences. Most data was 2011-12 available through 2010-11 Number Years at or 2011-12. of Steps Each Stepb Annual Salary Assistant Professor 6 2 $54,800 to $71,300 UC Hiring Faculty Associate Professor 5 2 to 3 68,100 to 86,200 From among Best Professor 9 3 80,100 to 146,300 Candidates available a For an academic-year appointment (about nine months). Certain disciplines (such as law, economics, and health sciences) have separate faculty salary scales. Most New UC Faculty b Expected years at each step, per UC policy. Professors may advance more quickly or slowly depending on performance. Received Their Degrees From Top Universities. that year a slightly higher percentage of new faculty Measuring new faculty qualifications based on the hired by UC had attended either Stanford, Harvard, reputation of the university from which the faculty MIT, or Yale. Graphic Sign Off member graduated is one way to assess the quality Most New UC Faculty Have Been the Secretary of new faculty hires. As shown in the first column University’s Top Choice Candidate. Another, Analyst of Figure 4 (see next page), between 2001-02 and more direct way that the university in the past 2010-11, the top four institutions from which new Director has gauged its success in faculty hiring is by UC faculty received their degree (typically, the Deputy tracking how many of its faculty hires were the best doctoral degree) were Stanford, Harvard, MIT, candidate available, according to the university’s and Yale. Together, about 18 percent of new UC own assessment of all the candidates’ qualifications. faculty received their highest degree from one of From the mid-1980s through 2004-05, the these four institutions. The next most represented Figure 3 universities include Faculty Compensation Supported Mostly With State Fundsa several Ivy League and other top-ranked Other Funds universities, such as Student Tuition and Fees Private Gifts, Grants, Princeton, Columbia, and and Contracts the California Institute of Sales and Services Technology. In addition, about 24 percent of new Federal Contracts UC faculty received their and Grants highest degree from one of the UC campuses. As shown in the second State General Fund column of Figure 4, this pattern of hiring faculty who graduated from top universities continued in a Faculty compensation includes base compensation as well as compensation for additional duties 2010-11. For example, in (such as summer teaching or administrative work). www.lao.ca.gov Legislative Analyst’s Office 7 ARTWORK #120392 An LAO RepOR t UC Retaining Figure 4 most Faculty Most New UC Faculty Graduated From Top Universities Less Than Two Percent of All New UC Faculty Percent of Faculty Resign 2001-02 Universitya Through 2010-11 2010-11 Only Each Year. Separation Stanford 6% 8% rates show how many Harvard 5 6 employees are leaving an Massachusetts Institute of Technology 3 2 organization compared to Yale 3 4 Subtotals (18%) (20%) the size of its workforce. University of Chicago 2% 2% Faculty separations University of Michigan (Ann Arbor) 2 — are tracked separately Princeton 2 2 Cornell 2 3 for (1) resignations, California Institute of Technology 2 1 (2) retirements, and University of Pennsylvania 1 3 (3) other causes. New York University 1 1 Columbia 1 — (Separation rates due University of Wisconsin (Madison) 1 2 to other causes, such as Duke 1 2 death, are rare.) For the Northwestern 1 1 Johns Hopkins 1 1 purposes of measuring University of Washington (Seattle) 1 — UC’s success in retaining University of Minnesota 1 1 faculty, the resignation University of Southern California 1 1 University of Texas (Austin) 1 — rate is the most important Subtotals (22%) (18%) indicator since it most UC 24% 25% closely relates to faculty All Other Universities 36 37 choosing to leave UC Totals 100% 100% a University from which a new UC faculty hire received his or her highest degree (typically the doctoral for other employers. degree). Detail may not add due to rounding. As shown in Figure 5, UC’s faculty resignation university in most years hired its top choice faculty rate has been less than candidate over 85 percent of the time. After that 2 percent each year over the last decade. This means time, UC stopped collecting this data centrally, that from year to year, nearly all faculty choose to so unfortunately what percentage of first choice continue to work at UC. candidates it has been hiring in recent years is Most New Assistant Professors Ultimately unknown. However, the fact that UC’s recruitment Earn Tenure and Remain at UC. Another efforts do not appear to have been hindered by important indicator of faculty retention is the previous economic recessions and budget shortfalls percentage of new Assistant Professors who over a two-decade period suggests that the recent later become tenured and stay at the university. recession might not have had a particularly The university tracks the retention rates of new pronounced effect on UC’s recent recruitment Assistant Professors for eight years since they efforts. must, with limited exceptions, earn tenure within that time or else leave the university. As shown in Figure 6, 70 percent of the Assistant Professors 8 Legislative Analyst’s Office www.lao.ca.gov Graphic Sign Off Secretary Analyst Director Deputy An LAO RepOR t hired in 2000-01 had earned tenure and were Figure 5 still working at the UC Faculty Resignation Rate Less Than 2 Percent university in 2008-09. In contrast, 10 percent 6% of Assistant Professors in this same cohort had 5 earned tenure and then left the university. (For 4 the remaining Assistant Professors in the cohort 3 who left the university prior to receiving tenure, Graphic Sign Off 2 it is unclear whether Secretary these faculty left because 1 Analyst they expected a negative Director tenure decision or for Deputy other reasons.) Three 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 prior cohorts of Assistant Professors hired between 1997 and 2000 had similar tenure and departure rates as this cohort. Figure 6 ARTWORK #120392 Most New Assistant Professors Earn Tenure and Remain at UCa UC Faculty Compensation Competitive With Still Assistant Professor at UC top Universities Left UC With Tenure UC Faculty Salaries Above Public Comparisons, Below Left UC Without Tenure Private Comparisons. To assess its competitiveness on faculty salaries, UC compares its salaries Tenured with those at four Professor at UC public and four private institutions. (In the box on page 10, we discuss a Status of Assistant Professors in 2008-09 who were hired eight years earlier. concerns our office has expressed in the past www.lao.ca.gov Legislative Analyst’s Office 9 ARTWORK #120392 An LAO RepOR t Comparison institutions methodology Raises Concerns Methodology. The University of California (UC) compares its average faculty salary and total faculty compensation with the average of four private institutions (Harvard, the Massachusetts Institute of Technology, Standford, and Yale) and four public institutions (the State University of New York (Buffalo), the University of Illinois (Urbana), the University of Michigan (Ann Arbor), and the University of Virginia). In making comparisons, the university adjusts for differences in the distribution of faculty across ranks at UC and the comparison institutions since a university with more senior faculty would be expected to have a higher average salary. The university also excludes faculty in law and the health sciences. The comparison institutions and the methodology used to compare salaries were agreed to informally many years ago by the university and the state. Three Main Concerns. As we have discussed in previous publications, such as our Analysis of the 2007-08 Budget Bill, we believe that the basis for this set of comparison institutions and the methodology used to compare salaries has some drawbacks. Specifically, we find that the comparison institutions methodology suffers from the following shortcomings. • Assumes All UC Campuses Are the Same. By using a single average faculty salary for all UC campuses, the methodology presumes that all UC campuses are in the same faculty market. In reality, UC is a large, diverse university system with campuses of differing national reputation. The average faculty salary differential across UC campuses supports this view. For example, the average faculty salary at UC’s most selective campus (Berkeley) is 20 percent to 30 percent higher (depending on rank) than the average faculty salary at its least selective campus (Merced). • Includes Too Few Comparison Institutions. The comparison group includes eight institutions. However, only 15 percent of tenured faculty who left UC between 2000-01 and 2009-10 went to one of these eight institutions. Such a small number of comparison institutions may not reflect the broader academic market in which UC competes. In addition, all of the comparison institutions are single universities, whereas UC is a large, multicampus system. • Ignores Salary Variations by Discipline. Except for law and the health sciences (which are excluded entirely), the methodology used by UC to compare faculty salaries does not take into account variation in faculty salaries by discipline. Yet, faculty in some disciplines tend to earn higher salaries than faculty in other disciplines. For example, faculty in business and management tend to have significantly higher salaries than faculty in engineering, and faculty in engineering tend to earn more than faculty in the humanities. This means that institutions with more faculty in high-paying disciplines likely have a higher average salary. Since UC’s methodology does not compare average faculty salaries by discipline, it may not accurately represent the competitiveness of its salaries. 10 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t with the comparison institutions selected.) As that basically makes up for its lower average salary. shown in Figure 7, UC’s average faculty salary has Since this study was released, the university has been higher than the average faculty salary at the made some changes to its benefits. For example, four public institutions for the last ten years. Over the university increased employee contributions to the same period, the average faculty salary at UC UC’s pension plan, which reduced take-home pay has been below the four private institutions. Since for faculty. The increased contributions, however, that time, UC has approved budget plans providing have been more than offset by general salary across-the-board salary increases of 3 percent increases provided during the same time. annually for faculty in 2012-13 and 2013-14, as Most Faculty Do Not Leave UC or Reject UC well as funding for merit increases. In addition, Job Offers Due to Compensation. Another way that it has approved supplemental salary increases for UC in the past has measured the competitiveness faculty in 2013-14 intended to boost faculty salaries of its faculty compensation is by surveying its closer to the private comparison institutions. (The campuses asking why faculty candidates declined approved increases, however, could be revised prior job offers as well as why faculty left the univerGsitrya. phic Sign Off to taking effect.) As shown in Figure 8 (see next page), salary was Secretary UC Total Faculty Compensation Competitive cited about one-third of the time in UC’s two most Analyst With Comparison Institutions. In addition recent surveys from the mid-2000s. (Around that to salary, total faculty compensation includes same time, UC calculated that its faculty salar D ies ir ector benefits, such as health care and pensions. In were about 5 percent to 10 percent below thoseD eputy recent years, UC has begun to study how its of its comparison institutions.) Faculty cited total faculty compensation compares to the several other factors affecting their recruitment eight comparison institutions. According to the and retention decisions, such as location, personal university’s latest study Figure 7 from 2009, UC’s total Average UC Faculty Salary Above Public faculty compensation Comparisons, Below Private Comparisonsa was 4 percent below the average of its competitors. $170,000 Since the study defines 160,000 competitive as being Private within 5 percent above 150,000 or below the market 140,000 average, it appears that 130,000 taking benefits into UC 120,000 account results in UC being competitive with 110,000 Public the average of its eight 100,000 comparison institutions. 90,000 This suggests UC has a competitive advantage on 80,000 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 benefits compared with a Excludes faculty in the health sciences and law. the private comparisons www.lao.ca.gov Legislative Analyst’s Office 11 ARTWORK #120392 An LAO RepOR t circumstances, teaching Figure 8 workload, research Reasons Faculty Cite for funding, and facilities. Rejecting UC Job Offer or Leaving UC Some of these factors— Rejecting including location and Reasona Job Offerb Leaving UCc personal circumstances— Salary 33% 37% were reported to be Family reasons 33 18 about as important as Geography 31 4 Housing problems 22 13 compensation. Though Inadequate facilities 14 7 UC has decided not to Perceived lack of public support for UC 14 12 collect this data in recent Spousal employment 12 9 Research funding 12 9 years, these findings Offer not timely 10 — indicate that other factors Cost of living (besides housing) 11 7 besides compensation Administrative workload 8 10 Teaching workload 2 10 play an important role in Other reasons 33 57 recruitment and retention a Respondents were allowed to choose more than one reason. b decisions. Despite the In 2004-05. c In 2003-04. importance of these other factors, UC historically with other institutions on factors, such as teaching has sought to collect more detailed data only on workload and research funding, which also appear how its compensation levels compare to other to affect recruitment and retention decisions. universities. It has not routinely compared itself impliCationS FoR StatE BUdgEt dECiSionS The UC Typically Seeks Annual Increases in Available Data Suggest UC’s Recruitment and State Funding to Support Increases in Faculty Retention Efforts Are Successful. Based on our Salaries. Each year, UC adopts an annual budget review of available data, UC generally appears to plan that typically includes increases for faculty have been successful in its recruitment and retention salaries. In turn, UC then requests funding from efforts. Notably, based on multiple indicators—in the state to support these (and other) cost increases. some cases tracked over relatively long periods In years when the state augments UC’s budget to of time—the university has been successful in support its increased costs, it typically does not hiring top faculty candidates; the vast majority of earmark funding for faculty salary increases, but, by individuals hired as Assistant Professors stay at the providing a general purpose augmentation, a portion university for the initial eight years typically taken to of state funding typically goes toward this purpose. obtain tenure; very few faculty resign from UC each As noted earlier, the university’s most recent budget year; average faculty salaries at UC are higher than at plan (2013-14) assumes increases in both faculty its public comparison institutions; and UC’s benefits salaries and associated state funding. make it competitive with top private universities on total compensation. One concern, however, is that some key data were not available for 2010-11 12 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t and 2011-12 that would help the university and other competing budget priorities involving faculty Legislature better understand how successful UC has and higher education more generally. For example, been in its most recent recruitment and retention the state often has provided UC with funding for decisions. Given the relatively comprehensive data enrollment growth, which takes into account how we reviewed, a few additional data points probably much it costs to hire new faculty. In addition, in would not result in the Legislature reaching 2012-13, the state provided UC with some funding significantly different conclusions than those for its pension costs (a significant portion of which reached in this report. Nonetheless, we suggest relate to faculty), and UC has identified substantial the Legislature consider any rigorous, reliable, additional unmet pension costs. Moreover, the additional data the university can bring to bear on Legislature could consider providing funding to the issue. For example, the Legislature could benefit reduce UC’s student-to-faculty ratio. This ratio has from additional UC data on the number of top increased in recent years because the university choice faculty candidates hired in recent years, the has delayed hiring new faculty in response to state reasons cited recently by faculty when they reject budget reductions. Though this report does not job offers or resign from the university, and the examine the relative merits of expanding enrollment, competitiveness of UC’s benefits today compared to funding pension shortfalls, or reducing student-to- other universities. faculty ratios, these are some examples of competing Other Faculty and Higher Education Funding university funding priorities related to faculty. If the Priorities to Consider. In light of the many Legislature were to provide additional funding for indicators suggesting UC has been successful in the university, it will need to consider the relative its faculty recruitment and retention efforts, the importance of increasing faculty salaries compared Legislature needs to assess the trade-offs between with addressing these other priorities. providing funding for faculty salary increases and www.lao.ca.gov Legislative Analyst’s Office 13 An LAO RepOR t 14 Legislative Analyst’s Office www.lao.ca.gov An LAO RepOR t www.lao.ca.gov Legislative Analyst’s Office 15 An LAO RepOR t LAO Publications This report was prepared by Paul Golaszewski, and reviewed by Jennifer Kuhn. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 16 Legislative Analyst’s Office www.lao.ca.gov