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    Analysis Factors

    Area Wage Index

    External Labor

    FTE

    Implementation

    Peer Benchmarking

    Platform Overview

    Example 1:  What percent of total human capital investment in the School of Pharmacy is tied to employees performing activities that are in the ABC Insights Standard Activity Model (SAM)?  i.e., what percentage of human capital investment in the School of Pharmacy is devoted to admin & operations?
    • Click “External” in the top center of the screen, then click the External Single Year tab at the top left side of the screen.
    • Click “Select Standard Divisions”, and then toggle everything off except Pharmacy School.
    • In the Numerator drop-down menu, select SAM Spend.
    • In the Denominator drop-down menu, click Selected Standard Divisions Labor Spend.  (This will isolate the human capital investment of just the selected standard college / school)
    • The chart will display SAM spending within the Pharmacy School as a percent of total human capital investment in the Pharmacy School.
    Example 2:  What percent of total FTE employees in the Law School are doing work related to activities in the ABC Insights Standard Activity Model (SAM)?  I.e., what percent of FTE employees in the Law School are devoted to admin & operations?
    • From the same screen (External Single Year), click “Select Standard Divisions”, and then toggle everything off except Law School.
    • In the Numerator drop-down menu, select SAM FTE.
    • In the Denominator drop-down menu, click Selected Standard Divisions FTE.  (This will isolate the FTE number of just the selected standard college / school)
    • The chart will display the SAM related FTE employees within the Law School as a percent of total FTE employees in the Law School.

    When selecting benchmarks, you can easily view the characteristics of each member including the AWI value.   An AWI value of 1.0 is the average for the country.  A value of above 1.0 indicates you might be in a higher wage market and a value below 1.0 indicates that you might be in a lower wage market.   This may not be true for your university so we allow the AWI feature to be used or not – currently, it is the best and only proxy we are aware of that adjusts for regional wage differences in the field of higher education.

    Area Wage Index (AWI) is updated yearly by the Centers for Medicare and Medicaid (CMS).  The index uses an average hourly wage for each labor market area (total wage costs divided by total hours for all hospitals in the geographic area) and a national average hourly wage (total wage costs divided by total hours for all hospitals in the nation). A labor market area’s wage index (AWI) value is the ratio of the area’s average hourly wage to the national average hourly wage.

    For member universities with an associated medical center, we use the AWI for that medical center. For those member universities that not have an associated medical center, the AWI associated with the closest zip code is used.

    The Area Wage Index (AWI) is designed to adjust for the difference in the cost of human capital in different geographies.  For instance, an Application Developer of the same level of skill and experience hired in the San Francisco Bay Area would be paid a higher wage than a person performing the same job in a small rural town in Alabama due to the cost of living. When comparing the cash compensation in different geographies it is useful to adjust for area wage disparities.  You will see AWI listed in the numerator as SAM Spend (AWI adjusted) or not – simply select the appropriate choice for your analysis.

    Here is an explanation of how it works.

    1. When AWI is used, the total cash compensation paid in the benchmarking charts is adjusted for AWI so that the total human capital investment is “apples to apples” on a relative cost basis.
    1. When AWI is not used, the total paid in the benchmarking charts is not adjusted and the dollars reflected are the ACTUAL dollars paid.

    Many of our member universities have contracted various business processes within the university in areas such as dining services, information technology, and bookstore management. To provide a true “apples to apples” comparison, the consortium asks members to include External Labor contracts that materially impact the institution’s benchmarking graphs to ensure that we are capturing all human capital investment in support of university operations across all member campuses.

    The common driver is to improve efficiency and quality while “perhaps” also reducing costs. The motivation to outsource functions vary but the primary benefits include cost savings, budgetary constraints, desire to improve quality of service, access to talent.

    The university’s Project Coordinator (PC) will talk to all relevant points of contact at the university to gather the information related to the university’s contracts. This information will be provided to the assigned CSM who will then enter the relevant contract information into our benchmarking platform.

    The following resources have been proven to be helpful in gathering External Labor data for our member universities:

    Accounts Payable:  Since this office is responsible for processing invoices for payment to vendors, they may have information pertaining to specific dollar amounts allocated to the human capital that we would like to capture.

    Procurement Office: The procurement services office may also serve as an important point of contact. Procurement offices are responsible for purchasing goods and services for the university and managing financial stewardship of all payments to external vendors of services. In charge of purchasing, procurement offices would have the knowledge and the ability to interpret different contracts.

    Other Resources: Additionally, some colleges and universities may devote a full-time position to managing a specific contract and the areas managed under the contract. If your university has such a position, contacting the employee hired for this function will help in obtaining further information about the contract. Some universities may also have an office of contract administration that would be an additional resource for information. Finally, the controller can serve as a reference and may be able to put the Project Coordinator in contact with other offices across the campus.

    The list below highlights the initial areas of focus for FY14 – FY17.  The ABC Insights team, with support from our members, may add additional focus areas in the future.

    Focus Contract Categories Typical Vendors to Consider
    #1 – Facilities / Dining Aramark

     

    Sodexo

    Chartwells

    #2 – Facilities / Housekeeping Aramark
    #3 – Facilities / Public Safety Note – if the university has a Town N’ Gown relationship for this with the local municipality, please note this in the benchmarking notes.
    #4 – Finance / Payroll Processing ADP

     

    Ellucian

    Oracle

    Paycor

    #5 – Facilities / Grounds Aramark
    #6 – Facilities / Transportation Note – if the university has a Town N’ Gown relationship for this with the local municipality, please note this in the benchmarking notes.
    #7 – Facilities / Construction Services, Building Maintenance and Repair Aramark
    Sodexo
    Chartwells (Compass Group)EYP
    #8 IT / User Support Accenture
    Aircuity

    Anything excluded in our Standard Activity Model (SAM) is also excluded from External Labor analysis.  Please contact your Client Services Manager (CSM) for the most recent list of all excluded areas of our Standard Activity Model.

    Full-time equivalent (FTE) is the budgetary equivalent of one position, continuously filled full-time for the entire fiscal year and which may be comprised of any combination of part-time and full-time positions.  During the implementation process, we determine FTE on a per unique role basis by dividing the amount an individual was paid in the fiscal year by what they were contracted to make for that role if they worked a full year (annualized rate).  If a university cannot provide an annualized or contracted rate then we will work with the member university to include a reasonable estimate to ensure they are not under-reported in the area of FTE.

    FTE is important in a variety of areas in addition to annual budget construction. It is used for university reporting and in the accreditation process.  It is also important for university statistics and funding discussions, as well as in comparisons with benchmarks.

    ABC Insights has worked closely with its members to develop standard FTE rules for each classification of employee.  For more information about those standard classifications and FTE calculations please contact your Client Services Manager (CSM).

    A core part of our mapping process includes a sampling of titles and performing research on individuals to determine exactly what they are doing.  This research includes online resources to provide clues that can inform more accurate activity descriptions than a standard job description in some cases.  Names are used to help research the activities for job titles that are difficult to identify otherwise.

    The ABC Insights development team has passed rigorous security audits to securely transfer, process and store sensitive information.  To gain more specific information in this area please contact your Client Services Manager (CSM) to receive a copy of our information security policies and procedures.

    The Program Coordinator (PC) is our single point of contact for the implementation of each member.  He or she is critical to ensuring that the implementation remains on schedule and that the data is reviewed and reasonably accurate to provide decision support.  The PC is expected to spend up to 1 hour per week for a standing check-in meeting. The time is less in the early stages of the project and can be more during the final phases of the project when more precise reviews are required.

    A first-year implementation for a new member university is estimated to take 4-5 months from the time a validated payroll file is imported into the ABC Insights® platform.  The basic phases and time to complete are outlined below:

    • Kick-Off Meeting – typically 2 weeks from signed Letter of Agreement
    • Payroll File Meeting – typically 2 weeks from Kick-Off Meeting
    • Payroll File Received – typically 4 weeks from Payroll File Meeting
    • Payroll File Imported – typically 1 week from Payroll File received
    • 90-Day Business Officer Check-In Meeting – scheduled 90 days from Kick-Off meeting
    • Insights Meeting Conducted – typically 4 months from Payroll File Imported
    • Final Benchmarkable – typically 2 weeks from Insights Meeting

    The mapping process is guided by the consistent application of rules developed to inform what activities certain job roles are performing on campus.  Some of these decisions are clear based on title and dept. combinations and some are more complex and require deeper analysis as shown in the flow-chart below.

    Once the previous fiscal year of data is marked as benchmarkable in the platform the following process kicks off.

    • Payroll File Migrated – typically 4 weeks from previous year becoming benchmarkable with timely receipt of the payroll file
    • Insights Meeting Conducted – typically 3 months from Payroll File migration
    • Final Benchmarkable – typically 2 weeks from Insights Meeting

    The process that the ABC Insights research analyst (RA) team uses to determine job role activities is much broader than an analysis of the title itself.  University members provide us with a detailed payroll file that provides supporting columns of information that provide valuable clues into the job activities measured in our standard activity model (SAM).  In addition, we perform research on a sample of individuals that perform each job role to provide additional clues/support that assist with the accuracy of the activity mappings.   The results of this process ensure that the activity mappings are reasonably accurate and beneficial for decision making.  In cases, when our research analyst team has insufficient evidence to support a mapping we will request position description information/guidance from our assigned university Program Coordinator (PC) to inform the mapping.

    Since our consortium database contains over 50,000 unique university titles we have created a robust mapping index through analysis of roles/activities at other member universities.  This proprietary mapping index provides valuable information to support the mapping process.

    The combination of all of these research sources is what we call our “All Source Analysis” ASA mapping process.  This process results in an “apples-to-apples” comparison of job activities across our membership.   The lessons learned during our implementation process can be very helpful in directing your focus to obtain improved title clarity and we see many members using our services to inform the pace and urgency of their internal job title improvement efforts.

    Effective benchmark selection is largely based on what questions you are trying to ask.  In general, ABC will use the following benchmark selection criteria when preparing for a general Insights Meeting.  We look at benchmarks that are similar in the following areas:

    1. Total Operating Expense
    2. Carnegie Classification ($ size of Research expenses)
    3. Total Students and Employees (IPEDS)
    4. Region of the Country

    The Employee (IPEDS) number is a “snapshot” of the employees in the university on the exact date IPEDS requested the information.  As a result, it does not provide a complete picture of how many FTE the university served in any given Fiscal Year. The FTE Employees (ABC) captures is inclusive of the entire fiscal year and as a result is a more accurate count to use for analysis.

    We find the dividing the Total Standard Activity Model (SAM) Spend on your campus using the following Analysis Factors is a good comparison of over or underperformance in a particular activity.  The following are the most logical comparisons to use for normalization.  Note – it is best to use Total SAM Spend AWI adjusted since this adjusts the labor dollars nationally for a better comparison of wage-adjusted dollars.

    • Facilities divided by Acres Maintained
    • Student Services divided by Students (IPEDS)
    • IT divided by Employees + Students (IPEDS)
    • Finance divided by Employees + Students (IPEDS)
    • Communications divided by Funds Raised
    • Development divided by Funds Raised
    • Human Resources divided by Employees (ABC)
    • Research Administration divided by Awards

    Note – US News and World Report publishes a list of the most efficient universities in the US annually.  Their study uses total students (IPEDS) as a common efficiency ranking for spending across the categories in their study.

    We provide descriptive information at the top of the chart / heading and we also provide more detailed information at the bottom left of any of the reports that says Chart Notes.  If you click on Chart Notes you will see valuable information about the selections made to generate the chart. Since the charts are dynamically generated this can be very helpful if you are taking a screenshot of the results.  As you can see at the bottom of the screen, the Chart Notes include detailed information regarding:

    • Peer Information (who was included and their status)
    • Selected Standard Schools / Divisions (what was included)
    • Data View (Organizational Classification or Employee Classification)

    Yes.  We allow our members to click on the icon that says Select Divisions.  Once clicked, the platform will show all of your Divisions (and/or Schools) that have been mapped into our Standard Organizational Model™ (SOM).  For instance, you may want to compare human capital investment between your School of Business and that of a benchmark university. To do so, simply de-select all and then select just the areas of the SOM you wish to compare.  Note – if your university has no clear Division / School that maps into our SOM then you will see a * next to that Standard Division / School name.

    The platform is a decision support tool for university leaders.  The platform enables members to examine the relative intensity of staffing costs and compare those costs to benchmarks using an activity-based costing methodology.

    Member institutions provide a payroll file for each fiscal year. Files include several variables for each person who received pay during a given fiscal year. Typical columns include name, division, department, job title, and salary.  In addition, member universities provide relevant information about external labor contacts to measure human capital investment and FTE that are not included in their payroll file. Finally, our members provide a set of Analysis Factors that allow data to be normalized and effectively compared across institutions.  For instance, universities provide Analysis Factors for Total Acres or Development Funds Raised to determine their spending/unit relative to benchmarks.

    The platform provides a variety of flexible views of the data based on feedback from our consortium members.  If you need alternate views or raw data to support decision making then please contact your Client Services Manager (CSM) to determine an appropriate solution.

    The team at ABC follows stringent security protocols to ensure the data is secured and protected.  For more information about our security processes please contact your Client Services Manager (CSM).