New Data on Management Growth at UC

New Data on Management Growth at UC 1991-2010

by Charles Schwartz, UC Berkeley

This is a subject I have written about several times in the past, based upon analysis of statistical data published by the University. Official response has been pathetic. Now, some new data not only extends the time frame over which we can see enormous growth in management positions but also lets us identify the main sources of funds paying for this estimated $1 Billion per year in apparent waste.

If you want to read a summary of my past studies of this subject, along with accounts of how UC officials have responded to these analyses, see http://socrates.berkeley.edu/~schwrtz/Seminar/Seminar10_13_09.pdf

While those earlier studies covered the time period 1996-2006, this new data spans a larger interval, 1991-2010, and shows overall even more excessive growth. Here is the latest picture for all of the University of California.

UC MNGT

Source of data:  http://www.ucop.edu/ucophome/uwnews/stat/
“Total” Employment numbers scaled (x0.0289) to match Management at 1991.
“Management” means the employment category:
SMG & MSP (Senior Management Group & Management and Senior Professionals)
“FTE” means Full-Time Equivalent positions
This data excludes DOE Laboratories but includes UC Medical Centers

Detailed graphs of this type for each individual UC campus are available here (.doc) or here (.pdf).

To see the implications of this data, I have made the following summary table.

Table 1. Campuses Ranked by Management Growth 1991-2010

UC Campus % Growth in Management Personnel % Growth in Total Employees “Excess” Management                FTE
Berkeley 336% 22% 778
Santa Cruz 324% 61% 197
San Francisco 257% 56% 776
San Diego 242% 63% 568
Los Angeles 234% 45% 1,035
Davis 223% 51% 473
Santa Barbara 188% 28% 184
Irvine 171% 47% 327
Riverside 163% 59% 91
OP 63% -17% 273
TOTAL UC 220% 47% 4,647

“Excess” Management FTE  is calculated as follows:
(2010 Mngt FTE) – (1+% Growth in Total Employees)x(1991 Mngt FTE)

With an average compensation for MSP staff of $122,000 per year, this total Excess costs the University around $560 Million per year.

In my earlier studies I identified another employee category that showed exceptionally large growth.  This is the sub category of PSS (Professional and Support Staff) positions labeled “Code-F” and named “Fiscal, Management & Staff Services.”  It appeared that most of these positions were likely to be support staff (above the clerical level) for the Managers discussed earlier. Over the period 1993-2010, this category of employees at UC grew from 7,162 to 18,102 FTE, for an overall increase of 153%.  Using the same method as above, this leads me to estimate a present Excess of (18102) – (1.46)x(7162) = 7645.  Thus, with an average $63,000 per year salary for these positions, I estimate this Excess cost at around $480 Million per year.

Adding these two estimates together I get a cost to UC of just over $1 Billion per year for apparent bureaucratic bloat.

The next question is, What sources of money are used to pay these management and management-support positions? The University of California Office of the President (UCOP) publishes Compensation reports, which, it turns out, are not useful in answering this question. The whole MSP category is broken into several portions, some of which are shown there but others appear to be hidden within the PSS Code-F category.

Fortunately, I have been able to obtain some detailed payroll data from UCOP and the following tables show what we are interested in. These data cover only Base Pay for the fiscal year 2009-10.

Table 2. FY 2009-10 Payroll Data – Total UC

Job category FTE * Total Pay Annual Pay / FTE
MSP 7966 $972 Million $122,000
SMG 232 $69.4 Million $299,000
PSS Code-F 17628 $1,109 Million $63,000

* Note.  There are small differences between some FTE numbers shown here and those reported above; also, there was a recent move of Academic Deans, out of the SMG category. These quibbles are not important for our purposes here.

Table 3. FY 2009-10 Payroll Data – Total UC – by Fund Group

Fund Source * MSP SMG PSS – F Totals
$ Millions $ Millions $ Millions $ Millions
Auxiliary Enterprises 31 0.2 42 289
Contracts & Grants 38 0.1 75 670
Federal Funds 47 0.2 78 1043
Hosp/Health Sci Funds 308 14.5 236 3516
Other Funds 221 13.4 245 1207
State Funds 276 39.9 378 2673
Tuition & Fees 50 1.0 56 381
Total 972 69 1109 9780

* For definitions of these categories, see http://www.ucop.edu/irc/dd/cps/cps4300s.html
(“Other Funds” are mostly Endowments, Private Gifts and some ICR.)

In Table 3 we see that State Funds are a major source of payroll for the Management positions under study here.

Therefore, this issue of Excess Management should be a major topic of attention in the University’s present budget crisis.

The distinction shown here between State Funds and Tuition & Fees is something I would question, since those two fund sources are largely intermingled.

Table 3 also shows that the Medical Enterprises are another big source of UC’s overall Management bloat (this was specifically detailed in one of my earlier papers). This observation serves to raise even higher the question of why the Berkeley campus, with no Hospital or Medical School, showed the largest overall growth in Management (see Table 1.)

With this new payroll data source one can also separate out information for the individual campuses.  Table 4 shows what I get for my own campus; and anyone who wants to do an analysis for their own campus can download a copy of this 4857 line Excel data file here.

Table 4. FY 2009-10 Payroll Data – UC Berkeley – by Fund Group

Fund Source MSP SMG PSS – F
$ Millions $ Millions $ Millions
Auxiliary Enterprises 12.6 4.5
Contracts & Grants 7.1 5.8
Federal Funds 4.4 4.8
Hosp/Health Sci Funds 0.4 0.8
Other Funds 34.9 0.3 32.9
State Funds 44.3 5.4 50.7
Tuition & Fees 10.4 0.2 7.3
Total $ Millions 114 5.8 107
Total FTE 997 24 1676
Annual Salary / FTE $114,000 $240,000 $64,000

A rough estimate of Berkeley’s cost for Excess Management: over $100 Million per year.  In a recent report to The Regents, Berkeley officials state that they are in the process of eliminating 240 management positions, with an estimated savings of about $20 Million. My data says that they need to do a lot better than that.

12 Comments

  1. Daniel Melia said,

    March 28, 2011 @ 12:13 pm

    The rate of growth of management here (about 5% per annum) is amusingly(?) very close to C. Northcote Parkinson’s original projection of Parkinson’s Law in his 1955 article in The Economist in which he argues (with tongue only partially in cheek) that bureaucracies grow at a rate between 5.17% and 6.56% per year irrespective of any external factors.

  2. Charles Schwartz said,

    March 28, 2011 @ 12:45 pm

    You are right on, Dan.

    In an earlier paper on this topic, “Financing the University – Part 13”, posted at http://socrates.berkeley.edu/~schwrtz , I also relied on Parkinson for inspired theoretical interpretation of this data.

    Charlie.

  3. peter krapp said,

    March 28, 2011 @ 2:52 pm

    old news! more than a year ago, UCPB published a detailed discussion of administrative growth at UC in the “Choices Report”, including details about MSP categorization. see http://www.universityofcalifornia.edu/senate/ucpb.choices.pdf – pages 45 following for this discussion of data from the University’s Statistical Summary of Students and Staff for two benchmark years, 1997-1998 and 2008-2009:

    “During this period, student FTEs increased by 33%, from 169,862 to 226,040. The number of ladder-rank faculty FTEs increased by only 25%, from 7,500 to 9,400. In comparison, the number of senior administrators (senior management group, managers and senior professionals) increased by 125%, from 3,651 to 8,230. Put another way, in 1997-1998, there was one senior manager per 47 students and 2.1 faculty, and in 2008-2009, there was one senior manager per 27 students and 1.1 faculty. For comparison, we note that during this period, the number of lecturer FTE increased by 54%, and the number other non-ladder rank faculty FTE increased by 59%. Clearly, ladder rank faculty numbers have not kept up with student growth, while lecturers and administrative categories far outpaced student growth. Given that ladder rank faculty directly carry all three parts of UC’s mission – teaching, research, and public service – their declining proportion raises questions about how well UC is focusing on its core mission. Meanwhile, the rapid rate of growth for senior managers provides ammunition to the University’s critics.
    The UC Office of Institutional Research (IR) has provided UCPB with more detailed information on these changes. From these data, UCPB has drawn the following conclusions. The growth in senior managers is mainly due to managers and senior professionals (MSPs)—the number of employees in the senior management group itself (SMG) stayed roughly constant at around 300. Just focusing on non-medical center employees paid from General Funds, the number of MSPs increased by 125%, from 1,200 to 2,700. In constant dollars, expenditures for this group’s total earnings increased by 192%. It is unclear what factors have driven the growth in managers and senior professionals. It has been argued that advances in technology require a more technically qualified workforce, but the bulk of the increase was in job titles such as managers (or directors) rather than computer programmers, engineers, or scientists. Another possibility is that professional and support staff (PSS) are continuously reclassified as, or promoted to, MSPs. There is no doubt that this has happened in many cases, but the total number of PSS FTE during this period also increased, by 36%, from 76,400 to 103,800, so there is no evidence for a reduction in PSS, which kept pace with student numbers. Indeed, the only major group of employees that did not keep up with student numbers was ladder rank faculty. It has also been argued that the increase in senior administrators is due to an increased level of research at the University. Indeed, research expenditures increased by 74%, in constant dollars during this period. Although the number of MSPs in the research functional area increased by 286%, from 220 to 850, the bulk of administrative growth was in the institutional support functional area, a 106% increase from 1,160 to 2,390. Furthermore, one might note that even as OP has shrunk, UC has not yet seen a reduction in headcount or budgeting in central campus administration that is commensurate with the budget cuts or the OP re-organization. UCPB is not alone in observing these alarming trends in employment proportions. The unarmed eye can see, from publicly available documents, that significant administrative growth in UC outpaced both student enrollment growth and faculty headcount over the past decade.
    The Office of Institutional Research (IR) prepared its own analysis of these data, distributed systemwide in March 2010. It presented different conclusions, highlighting the role of hospitals, auxiliaries, and research as main drivers of employee growth at UC. We do not dispute this point, but reiterate that the number of non-medical center employees in the MSP category, paid from General Funds, increased by 125%, from 1,200 to 2,700, with earnings increased, in constant dollars, by 192%. Far more MSPs were added in the institutional support functional area than in the research area. IR attributes this increase in MSPs to “increased professionalization of the workplace” – but that is simply a redescription of the phenomenon that there are more than twice as many senior managers as there used to be. MSP numbers are not just “up slightly” as stated in the IR report. Finally, after aggregating ladder rank faculty with lecturers and instructors, the IR report states that “Growth in all faculty FTE has kept pace with growth in student enrollments.” However, we note again that student numbers increased by 33% while ladder rank faculty increased by 25%. Essentially, UC added 56,178 students but only 1,900 ladder-rank faculty members – a marginal student-faculty ratio of 30:1. In sum, UCPB’s concern about the IR report is not about the data, but about what was omitted from the conclusions.
    UC has measures for administrative performance in place; however, it also has created incentives for bureaucratic proliferation (above all, the fact that people are promoted based on how many people report to them, a corollary of Parkinson’s Law).”

  4. Bob Samuels said,

    March 28, 2011 @ 3:23 pm

    Did you account for the furloughs in any way? Also, can we trace the movement of administrative jobs from UCOP to the campuses? Thank you for this important information.

  5. Charles Schwartz said,

    March 28, 2011 @ 3:53 pm

    Peter, thanks for that update.
    I have been writing on this subject since 2003, gradually getting more and more data that shows the problem of bloated management is worse and worse. In 2006 Stan Glantz, your predecessor at UCPB picked up on it and tried to get UCOP to do something. Do you see any significant progress?

    Bob, this new salary data does not reflect furloughs and paycuts for that year. Re UCOP: it now shows a definite drop in staff and management from a few years ago. I am not clear how much of that is real reduction or just relocation.

    Charlie

  6. cloud minder said,

    March 28, 2011 @ 4:51 pm

    is there any way to find out if the $50 million “cut” at UCOP (mentioned at the last regent meeting) is going to result in actual reduction –or more relocation?

  7. patricia a. small said,

    March 28, 2011 @ 5:51 pm

    Charlie – interesting work but not surprising. Regents pre 2000 would be interested in this data as their mandate in the mid 1990’s was to reduce management growth moving forward. The new emphasis was to be on maintaining faculty excellence and enhanced campuses. The lack of following thru on the mandate was everyone’s fault. The good times prevailed and hence no reserve was set up to prepare for the downside that came. The Retirement Board (UCRS) established a plan in the late 1990’s for renewed contributions which was never honored till just recently. Therefore the pension plan (the Regents largest asset) has been additionally saddled with more higher paid people who are going to live longer. Not good.The institution (OP) also started to use more outsourcing along with moving jobs to the campuses so total costs grew out of control. Modest tuition growth, long a plus at UC, was unfortunately used to bring in more money. Middle class families resent this. UC, like all other public institutions, need to radically reduce costs to survive and meet their mandate of higher education for the brightest of California students. Transparency will greatly help the decision making process.
    Good luck to a great institution!
    Best,
    Pat Small

  8. peter krapp said,

    March 29, 2011 @ 2:43 pm

    progress at UC in accounting rigorously for all the drivers of growth in MSP numbers? – not really, although UCPB has made some inroads over the past number of years. while the OP report on administrative bloat we cited in last year’s Choices Report is, as you can see from the quote above, partly still white-wash, at least it’s been discussed more regularly in oakland, and OP has been drastically reduced in staffing. now the campuses need to do something similar, tough as it is. seeing berkeley at the top of your first table is not surprising to anyone in the UC, although it obviously does not rhyme with OP’s allegation that it is medical federal regulations that drive MSP patterns.

  9. UC Davis Surveillance Scandal | UCDavis Bicycle Barricade said,

    March 30, 2011 @ 11:32 am

    […] are wondering how the UC administration can devote so much work time to its spy games, check out Charlie Schwartz’s data on administrative bloat. It seems the oft-lamented decline in state funding means one thing to students and workers and […]

  10. Management growth at UC « Gas station without pumps said,

    March 30, 2011 @ 5:27 pm

    […] in UC.  It is clear that management bloat has gotten severe, and all the campuses are at fault: New Data on Management Growth at UC. Charles Schwartz's plot of relative management growth and overall employment growth at UC. […]

  11. who said,

    April 14, 2011 @ 1:42 pm

    I think I understand what “Senior Management Group” consists of: Deans, Executive Vice Chancellors, and Chancellors.

    Could you post job titles of “Manager and Senior Professionals”?
    so that we can put a face on who is in this group.

  12. Charles Schwartz said,

    April 16, 2011 @ 6:36 am

    Here is some of the data you ask for about job titles in MSP (Manager and Senior Professionals) for all of UC.

    As of Jan 2011
    MSP subcategories FTE

    Senior Professionals: (3833 subtotal)
    A – Student Services 115
    E – Arch & Engineering 248
    F15 – Computer Programmer 1,485
    F20 – Admin/Budget/Pers Analysis 573
    F30 – Management Services 153
    Other F and G 44
    H – Health Sciences 1,146
    I – Sciences & J – Protective Svcs 61

    Managers: (4677 subtotal)
    M10 – Managers 4,591
    M20 – Coaches 79

    If you want to investigate this data for individual campuses, see the Excel file to which I provide a link above.

    Charlie

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