MIDDLEBURY — After nearly a year of evaluating its workforce in preparation for job cuts, Middlebury College told its employees on Tuesday that it achieved a balanced budget without issuing pink slips.
“It is important to recognize the effort this took,” wrote President Laurie Patton in a campus-wide email. “This process has been both lengthy and challenging, and caused many in our community significant uncertainty and discomfort. Thanks to your participation, the process was successful.”
Last June Middlebury College, which is the largest employer in Addison County, launched a program called “Workforce Planning,” a comprehensive reevaluation of personnel and work processes. Among other things, the administration hoped this would lead to a 10 percent ($8 million) reduction in non-benefit employee compensation costs by the end of the current fiscal year (June 30).
VOLUNTARY SEPARATIONS
On Tuesday, college officials announced the results of two employee buyout plans — a Faculty Retirement Incentive Plan (FRIP) and a staff Incentive Separation Plan (ISP).
Of the 117 faculty who were eligible for the FRIP, 24 elected to participate. As a result, the college will achieve $4.6 million in annual savings, though over time some new faculty positions will need to be phased in.
Of the 77 staff members who were eligible for the ISP, 35 elected to participate. This number was slightly lower than hoped, college officials said, but it will result in an annual savings of $3.6 million. That number climbs to $6.1 million once the elimination of currently vacant positions is factored in.
Altogether, through buyouts and attrition, 147 full-time-equivalent (FTE) positions were eliminated, 43 new FTE positions were created for next year and 100 existing positions will get pay adjustments.
“We are pleased that Middlebury was able to achieve its highest-level goal — a balanced FY20 budget — without having to resort to layoffs,” wrote David Provost, executive vice president for finance and administration, in a campus-wide email Tuesday. The email was also signed by Jeff Cason, executive vice president and provost, and Karen Miller, vice president for human resources.
At this time, Middlebury does not anticipate making further staffing cuts, Provost told the Independent.
But in their campus-wide email, he, Cason and Miller cautioned that workforce planning was never meant to be a “quick fix.”
“It was designed to be a new way of thinking about and prioritizing the work we do in support of our educational mission,” they wrote. “We should be engaged in a continuous search for better and more efficient ways of working.”
A TOUGH YEAR
Workforce planning was introduced last June to accelerate an existing initiative, called The Road to a Sustainable Future, which itself had been launched in September 2016, just after the college posted a $16.7 million spending deficit.
Because Middlebury, like most colleges, spends more money on employee compensation and benefits than on anything else — typically 60 to 65 percent of total operating costs — it would be difficult to achieve a balanced budget without in some way addressing that spending, Provost said.
The process for figuring out how to do that began last fall, when vice presidents across the college launched a series of staff discussions about how work could be done more efficiently and by whom, as well as where more staffing and resources might be needed.
In December each department submitted two plans to the administration: one that cut staff compensation costs by 10 percent and one that cut costs by 15 percent.
Then they waited.
Throughout the process, employees were concerned not only about job security, but also about future work burdens for those who remained.
“Without knowing exactly how many responsibilities will be allocated, many departments are concerned that they will be expected to do the same amount of work with less staff,” reported Middlebury’s student newspaper, the Campus, earlier this month. “While the administration has repeatedly assured staff that this will not be the case, the lack of clarity on (that issue) has left some department heads and managers on edge.”
NEXT STEPS
For many current employees, job descriptions have indeed changed and responsibilities have shifted. Some employees will find that their new duties have earned them an increase in compensation, while others will receive outright promotions.
Putting all of those pieces together is still happening at the departmental level, Provost said, and is likely to occupy college officials for the next couple of months.
Any raises or promotions would not take effect until July 1.
In the meantime, the faculty and staff are having to navigate an entirely new online financial platform called Oracle, which was implemented not only to save money and increase efficiency but also to reduce the college’s software security vulnerabilities.
Looking ahead, the college’s board of trustees, which earlier this month approved a FY 2020 spending plan that would reduce expenses by 1.4 percent, will at its autumn meeting consider a proposal that would require the administration to submit a budget each year that shows an operating surplus.
FINANCIAL MILESTONE
Next year’s spending plan is set to become the first such budget, which college officials project will produce a surplus of nearly $300,000 — the first surplus since 2012. When operating revenue doesn’t meet expenses, the college turns to its endowment to make of the difference.
President Patton in her campus-wide email called it an important milestone for the college. And, thanks to workforce planning, it was achieved a year ahead of schedule, she said.
Operating deficits have been steadily shrinking since their high in 2016:
•2016: $16.7 million.
•2017: $13.8 million.
•2018: $10.6 million.
•2019: $7.5 million (projected).
According to Provost, the college’s net improvement in financial instability between FY 2016 and FY 2020 is more than $30 million.
Still, Patton said, “maintaining our secure financial footing will require continued care and attention.”
It has also required a tuition increase.
Next year the rate for tuition, room and board at Middlebury College will increase by 3.25 percent ($2,261) to $72,256.
Tuition is not the only thing that has increased, however.
This year the college set a record for applications. Middlebury’s incoming class of 2023 was selected from a pool of 9,750 applicants, the largest in the college’s history.
Reach Christopher Ross at [email protected].