Yale Bulletin and Calendar

February 27, 2004|Volume 32, Number 20

Update on Budget Planning and
Business Service Enhancements

A Letter to the Yale Community from Provost Susan Hockfield and John E. Pepper, Vice President for Finance and Administration

Last fall, the University announced plans to reduce expenses to address a projected budget deficit in the coming years. We embarked on a two-phase program of cost reductions, the first phase designed to identify short-term savings in both salary and non-salary costs throughout the University, and the second phase focused on long-term improvements in our business processes and services. Together, these initiatives will help us bring expenses into line with revenues in the University budget and will allow us to direct the maximum amount of resources, both financial and human, toward our core mission of teaching and scholarship.

The redesign of our business processes for long-term benefits and lasting savings will require the active involvement and support of the entire Yale community. We write to you now to bring you up to date on the progress we have made over the past three months, and on our plans and actions as we go forward. We are also seeking your participation to make this effort a success.

Every university in the nation faces a financial challenge in today's economy, though the strong performance of Yale's endowment puts us in a far better financial situation than most. We believe we can meet this challenge while preserving and enhancing the strength of the University by setting our priorities to:

1. Sustain and build our core academic programs;

2. Ensure that salaries for faculty and staff remain highly competitive, so that we can hire and retain the very best individuals in every area of the University;

3. Provide competitive levels of financial aid to recruit the most able students; and

4. Continue the commitment to refurbish and maintain our buildings for current and future generations.

As noted above, we are proceeding in two simultaneous ,phases. In Phase 1, we asked each school and department to achieve a 5% reduction in salary expenses (excluding faculty salaries and student wages) and a 5% reduction in non-personnel expenses in its budget plan for 2004-2005. We recognize that this was a challenging task, but we are pleased to report that virtually every department has submitted a plan that will achieve the targeted reductions. We want to thank all of you for your hard work and diligence in this effort.

Phase 2 begins with a broad and critical review of University-wide business processes. Our goal is to design processes that will provide higher quality service, greater ease of use and lower cost. Put simply, we want to do business in a smarter way.

Work on Phase 2 began last November, when the Officers created a coordinating group, the Administrative Services and Support Enhancement Team (ASSET), to develop and guide University-wide initiatives. ASSET has now convened a number of task forces and working groups to address areas with the greatest potential for savings, including travel, printing and publishing, general business services, procurement and telecommunications. A list of the groups formed to date, and their members, is available at: www.yale.edu/about/ASSET_task_force_members.pdf. We will be forming other groups during the coming weeks and months to pursue other opportunities, including one focused on energy conservation.

We are much encouraged by the enthusiasm with which faculty and staff have engaged with these task forces across the campus. A large number of suggestions for changes in policies and procedures are already being pursued. The successful implementation of these ideas will require participation throughout the University, and will require ongoing communication. To that end, we are putting in place the following:

ASSET has created a website (www.yale.edu/asset) where information about the task forces and working groups will be posted. In addition, you can send questions or suggestions by voicemail (by dialing 43A-SSET) or by e-mail (asset@yale.edu).

You can submit your ideas about things we should change or improve for better service and lower cost at an interactive "why not?" website (www.whynot.net/yale). Kiosks will be located around campus so everyone will have the opportunity to participate.

We encourage you to send us your ideas using any of these means, and we promise to monitor and respond to all the messages we receive.

Finally, let us address the question of layoffs, which we know has been on the minds of many members of the community since last fall. The total number of positions that will be eliminated to achieve the targeted budget reduction for the coming year is slightly over 200, or roughly 2% to 3% of our work force. Fortunately, most of these reductions will be achieved through voluntary means, such as retirements or resignations, or through the elimination of vacant positions. In recent weeks we have begun to see an increase in the number of planned or actual retirements, attributable in part to the enhancement in the University's Staff Retirement Plan, which increased retirement benefits by as much as 40%. Even so, we currently forecast that approximately 80 employees, representing less than 1% of the work force, will be laid off over the coming months. Human Resource Services has in place a number of mechanisms to assist these laid-off employees in finding jobs. First, a position control system now encourages departments to focus particular attention on internal applicants for open positions; special permission is required before any opening can be filled by an applicant from outside the University. Second, an extensive set of support services are available, which provide professional outplacement services, career counseling and training to assist in re-employment efforts.

We have confidence that the initiatives now underway will ensure our continued strength in teaching and scholarship, will position the University as a leader in administrative services and will make Yale a better place for all of us to work. We ask for your additional ideas and also for your continued support as initiatives are implemented. We will keep you closely posted on our progress.

NOTE: This official University message to the Yale community can also be viewed at: https://light.its.yale.edu/messages/Detail.asp?Msg=3401.

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