September 24, 2020
Since March of this year, we have lived in a constant state of change, with novel challenges facing us daily. I have watched as our community has shown immense resilience in the face of the pandemic, fervently working not only to manage personal struggles, but also to address the challenges we have been presented as an institution. My sincerest appreciation goes to each of you – whether as an essential worker you never took a day away from campus, or as an instructor you adapted your teaching modality to serve our students, or as a staff member you worked remotely to sustain our purpose. I simply cannot exhaust my expressions of gratitude.
In the wake of the pandemic, and as we continue to advance the work of our purpose, we have made a number of challenging decisions, and we know we have more to come. I write to review some of those with you and forecast what we see for the future and how we are approaching the choices that lie ahead.
In the spring at the onset of the pandemic, we quickly moved to online-only instruction, shuttering our physical, Norman campus. With an unknown future, many other universities enacted layoffs and furloughs for full-time employees, but we did not. At a cost of $12.5 million to cover the salaries for those employees for whom there was no work, we preserved our workforce and avoided the heavy cost to those who would have been without pay. In the months to come, we saw even more universities engage in mass layoffs, but because of our diligence during the past several years to achieve financial stability, we were able to avoid that pain. Had we not chosen to return to in-person operations this fall, we very likely would have had to follow suit of so many other institutions. I’m pleased to share that given the hard work of the last several months and our successful return to campus, we have no plans for any university-wide layoffs or furloughs.
And yet, other difficult decisions await us. Many of these decisions turn on the new reality in public higher education: after decades of increasing tuition and decreasing government funding, students now pay the lion’s share of the cost of their education – and today’s students demand and deserve excellence and affordability. Universities that do not understand this and neglect to act on it will flounder and, ultimately, fail. The paradigm of the past is no longer, and the pandemic has catalyzed this change. Institutions of higher education that succeed will do so by offering excellence at the lowest reasonable cost, understanding that it is talented faculty and staff that deliver that excellence.
One immediate decision that we must address is our healthcare insurance offerings and related benefits. These benefits represent a fixed cost that is both extraordinary and unsettlingly predictable. Each year of the recent past, we have seen an approximate 10% increase in healthcare insurance costs, and this next year, we will see a more than 11% jump. The Board of Regents has wisely given us direction to assess and benchmark our benefits offerings against the market – pinpointing where we are not competitive – and to modify our benefits in a way that makes them competitive.
The market standard for health insurance premiums is to provide a single-tier structure. On the Norman campus, we currently have six tiers, putting us at a competitive disadvantage. If the cost of benefits to the institution is too low, we will lose the talent we require to achieve excellence, and if the cost is too high, we cannot achieve affordability for our students. Our goal is to address the need for change to the market standard in a way that minimizes negative impacts on our faculty and staff. After deep deliberation, including important input from the Staff and Faculty Senates, the proposed changes to our benefits structure will take us from six to three tiers in 2021. The tiers also move us closer to a market standard on the single and family subsidies. The move on the Norman campus brings the entire university to a common structure of three tiers, as the Health Sciences Center already utilizes three tiers.
And yet, the reality is these changes will have a negative impact on our lowest-paid employees. We are taking steps to mitigate that burden, addressing this honestly and fairly, assessing both benefits and compensation, in particular for our lowest-paid positions. The measures we are taking have been forged in cooperation with the Staff Senate Executive Committee and have their full support. The input and counsel of the Staff and Faculty Senates has been valuable and important.
As part of these efforts, I have charged Human Resources with surveying our compensation structure as soon as possible to make sure that our lowest-salaried staff positions are paid fairly and are competitive in the market. We will be engaging our Staff Senate throughout this process and will treat it as a priority. We know that until this compensation study is complete, applying a sizable increase on health insurance contributions for those positions is a serious burden, so we have created a pool of resources throughout this transition that will alleviate the additional burden these increases may cause this first year. This measure, we trust, will only need be a temporary one as we will prioritize addressing the findings of the compensation study completed over the next year. We will commit the first new dollars of our next salary increase program to offsetting the difference between the market and the salaries of those employees who are included in our current lowest two tiers – those making less than $42,000 per year. It will be our goal to ensure those salaries are competitive with the market before we give any additional consideration to moving to the market standard of a single tier for healthcare premiums in future years.
In all things, as an institution we are working to balance the interests of those we serve – our current and future students and the taxpayers – with the interests of those responsible for fulfilling our purpose, our faculty and staff.
Live on, University,
Joseph Harroz, Jr.