Cornell is undertaking a universitywide initiative that will better integrate central administrative units, schools and colleges after a series of functional reviews that began in April 2020 to identify potential cost savings to offset the financial toll of the coronavirus pandemic.
“In an era of constrained resources, we always want to manage our expenses, so that we can invest in core priorities, and hold down tuition growth,” said Joanne DeStefano, executive vice president and chief financial officer. “Even before COVID, our financial projections showed very high growth in administrative expenses over time. As we have reduced administrative costs during the pandemic, we have positioned the university to be very strategic about the proper structure to effectively and efficiently deliver administrative services.”
Because a hiring freeze and a voluntary retirement incentive program have already reduced university staff by about 10%, reorganization resulting from the functional review will not rely on layoffs, administrators said.
The review consisted of six teams of deans and vice presidents from across the Ithaca and Cornell Tech campuses, each tasked with identifying both structural as well as one-time savings for a core functional area: alumni affairs and development; communications; facility services; financial services; human resource services; and information technology.
Last summer, the six teams submitted their initial reports, which outlined the baseline costs of their respective functions. A second round of reports laid out the implications for cost-reduction scenarios of 5%, 10% and 20%.
Based on the data it received from the review teams, the university leadership recommended specific financial targets for each team to pursue – targets that varied from function to function. The review teams submitted proposals for an organizational design in the fall. That was followed by an extended period of evaluation and implementation planning that is ongoing. The team leads are currently working with campus partners to discuss potential initiatives that will help shape the implementation plans.
“Cornell is a very distributed university, and many of our administrative support systems have both central and unit-specific components,” Provost Michael I. Kotlikoff said. “Over time, overlap between the support systems can grow. The functional reviews are not aimed at further centralization. They aim to integrate and develop the strategy for what work happens where. And it’s going to be different for different systems.”
The process may take a year or two to implement, Kotlikoff said, because the goal is to be thoughtful and thorough.
“We don’t expect the reorganization to be accompanied by layoffs,” he said. “We have an opportunity to do this through what has happened through attrition and retirement that occurred over the past 12 months, when position control was in place. Indeed, it is a testament to us all that Cornell has been able to protect its financial strength over the last 12 months. But that doesn’t change the need to reset our expense structure as we move to what we all hope will be a more normal 2022 academic year. This is an opportunity to build back smart and to ensure that we continue to have the resources for world-class education and research.”
The reorganization will require close cooperation among college deans, units and central administrators. Redundant operations will be combined. Reporting lines may change. Job titles and pay bands across the university could become more consistent.
There are precedents for this type of realignment. For many years, the university’s admissions process varied from college to college, each with its own admissions officer and policy, Kotlikoff noted. By working in partnership with the colleges, the university was able to hire a vice provost for enrollment who has the authority, responsibility and accountability to oversee admissions across Cornell and can ensure the university satisfies its overall admissions priorities.
While cost-cutting can result in short-term savings, a clarity of purpose and a clearer understanding of roles and decision-making will mean greater efficiency over the long term, according to Mary Opperman, vice president and chief human resources officer.
“We don’t want to break what’s working,” Opperman said, “but this is an opportunity to look at the models in a way that improves the work, improves workflow and improves the role clarity. The long-term savings will be more sustained if the work to reorganize the function is done very intentionally, through a process of making sure that we know why we are doing what we’re doing.”