College offers buyouts to 80 employees
MIDDLEBURY — This past Friday, Feb. 8, Middlebury College distributed applications to 80 staff members for formal separation packages that include incentives for them to leave their positions.
The voluntary buyouts are the result of a workforce planning process that the college initiated in June 2018, with the goal of reducing the college’s roughly $10.6 million annual operating deficit. In a Feb. 8 statement, college officials said they expect about 50 full- and part-time staff members at its Middlebury campus to take advantage of the program.
The college also reported Friday that it has eliminated another 100 staff positions in Middlebury and at the Middlebury Institute of International Studies at Monterey in California through “attrition and tight controls on hiring.” According to the college’s statement, those positions will not be refilled, but the institution has identified about 60 new positions it plans to create over the next couple of years.
The same report indicated that 14 faculty at the Monterey Institute have been issued applications for voluntary incentive separation plans. Those positions are being phased out. Similarly, 23 tenured faculty members at Middlebury College opted into a voluntary incentive retirement plan in January.
“These savings … will make it possible for Middlebury to budget a small operating surplus for its next fiscal year, starting July 1,” the college press release stated.
According to the college’s financial statements for fiscal year 2018, Middlebury’s annual operating costs were about $278 million. Bill Burger, vice president of communications and chief marketing officer for Middlebury College, reported last week that staff compensation accounts for nearly two-thirds of the organization’s annual operating expenses.
Burger declined to release a comprehensive list of the positions eliminated, but said they are “distributed across the institution and include entry-level, manager-level and senior-level positions.”
Tim Parsons, a landscape horticulturalist at the college and president of staff council, on Wednesday took a break from clearing snow to say that his group didn’t even know exactly who had received the buyout letters.
“As a staff council, we are trying to give space to all of the folks facing this decision,” said Parsons, who did not receive a buyout offer. “It’s almost like a grieving process in a way. It is true that some people are really pleased to get the package, but there are some that are devastated that their position is being eliminated.”
Also last Friday, the college posted on an internal web portal employment opportunities for 31 new positions, which are part of the 60 or so new jobs being created. The planning process also identified 30 new staff positions in addition to those posted last week. According to Burger, hiring priority for those new positions will be given to those employees who have received incentive separation plans. The new positions were identified by department heads and administrators through the college’s workforce planning process.
“The positions are viewable now only by those employees who received the voluntary incentive separation plan application because we want them to be able to decide whether they want to apply for one of the positions even as they consider a voluntary separation,” Burger said Tuesday. “The final hiring decision will rest with the hiring manager, whose first obligation is to ensure that the position is filled by a qualified candidate.”
Though Burger declined to say where the new positions will be housed, he said Monday they “represent departments across the institution. They also vary widely in terms of the specialized skills and experience required.”
Middlebury’s rollout of the applications for voluntary incentive separation packages marks the final step in the institution’s multi-year plan to reduce staff compensation costs by about $8 million per year starting in FY 2019, which begins July 1.
It’s not the first action the college has taken to reduce its annual expenditures, and Burger said last week that the institution looked hard for alternatives to reducing staff compensation, including a modest increase to the size of the student body, increases to annual employee healthcare premium contributions and collaborations with other schools to invest in new administrative technology.
Middlebury has added about 50 students to its student body since 2013, bringing it to an average of 2,550 students. That move has generated as much as $2 million in new revenue per year.
Further, since 2016, salaries of faculty and senior administrators making $150,000 or more annually have been frozen.
Middlebury has also cut back on the benefits it offers employees, which Burger says are very competitive when compared with those offered by peer institutions. In 2016, the college reinstatedannual increases in employee contributions to health care, after about eight years in which there were not increases. Employees now pay just over 20 percent of the aggregate share of the employee premium, as compared with the statewide average of 27 percent. The college had swallowed the cost of annual employee healthcare premium increases for the eight years prior and in 2017, the college reduced its annual employer contribution to employee retirement plans by 4 percent for new employees 45 and older. Existing employees were grandfathered in and remain eligible for the previous contribution rate of 15 percent upon reaching 45.
Middlebury College, along with other members of the Green Mountain Higher Education Care Consortium, signed a healthcare administration agreement with insurer CIGNA that became effective in 2016 and has saved Middlebury approximately $800,000 per year since.
Additionally, the college refinanced its long-term debt in FY2017, which its website says will save it approximately $900,000 annually in the coming years.
Further, in 2017, Middlebury, Champlain College and Saint Michael’s College pooled resources to implement a new Oracle Enterprise Resource Planning software system to streamline alumni fundraising operations at the three schools. The college reports that pooling resources on this front is expected to save the institution $7 million over the next five to six years, compared with what the necessary program would have cost if Middlebury invested alone.
In FY2018 and FY2019, the college reduced its operating expenses (excluding compensation) by 4 percent and 2 percent, respectively.
According to Burger, applications for staff incentive separation plans are due back to the administration from interested employees by March 11. “Submitting the application is not a binding decision,” Burger told the Independent. “It’s just one step. Those who apply will receive a formal package with the details of their offer.”
Burger said that once those offers are made this spring, staff will have an additional 45 days to decide whether to accept.
Parsons called it “a really good, smart process.
“The concept of workforce planning is great,” Parsons said. “You want them to go slow and take their time, but at the same time, you want them to go quickly so you can know whether and where your job fits.”
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