How To Move Beyond Across-the-Board Cuts At Your Institution

In today's challenging financial climate, university leaders are under immense pressure to reduce costs. The default solution is often an across-the-board cut—a mandated percentage reduction applied uniformly to every or specific business units. While this approach appears straightforward, it is a blunt instrument that can inadvertently harm an institution's highest-performing areas, damage morale, and fail to address underlying structural inefficiencies.

HelioCampus offers a more strategic, data-informed alternative. Instead of making indiscriminate cuts, our Labor Cost Analytics data empowers you with specific, targeted strategies. This approach allows you to achieve sustainable cost savings while protecting and even enhancing your institution's ability to deliver on its core mission.We have outlined below the primary actions your institution can take to strategically manage and reduce administrative costs, powered by the activity-based data in the HelioCampus platform.

1. Implement Strategic Hiring Controls: Hiring Freezes, Monitoring Position Refills & Prioritizing Activities

Instead of implementing a blunt hiring freeze, your institution can enforce strategic position control over administrative vacancies. With an activity-based view of staffing, you can analyze vacant positions to determine whether to backfill it as-is, restructure the role, or eliminate it entirely. This allows you to scrutinize new hiring requests against strategic priorities and provides a clear framework to reduce or consolidate services that are not core to the mission. You can further inform this prioritization by using external comparisons to benchmark activity costs against peers and quality data to identify which services are most valued by your campus community.

2. Right-Size Staffing to Match Demand: Adjusting for Enrollment & Research Changes

Your institution can align staffing levels with key institutional drivers. You can evaluate academic support staffing based on student enrollment changes and separately evaluate research administration staffing based on growth or shifts in research expenditures. This data-driven action prevents a mismatch between workload and resources, ensuring you are staffed efficiently to meet the distinct demands of both your academic and research enterprises.

Research Positions by Standard School
Left Chart: Consortium - FY23 FTE attributed to Research Positions by Standard School
Right Chart: Consortium - Proportion of FY23 'Teaching, Research, and Service FTE' attributed to Research Positions

3. Pursue Organizational Restructuring and Consolidation: Centralization, Shared Services & Academic Unit Reorganization

Your institution can identify opportunities to streamline administrative functions currently performed across many decentralized units. By using an activity-based view to see where work like IT, HR, and finance is happening, you can assess the potential for greater efficiency through consolidation. This analysis highlights opportunities to move toward a shared service model, which can improve service consistency and create cost efficiencies.

4. Optimize Organizational Spans and Layers: Managing Spans of Control

While not always the first area to consider, analyzing the management structure offers another lens for efficiency. Your institution can streamline its management structure to reduce administrative overhead and improve communication. By analyzing your organization's spans and layers, you can identify managers with too few direct reports and areas with excessive layers of management. This allows you to flatten the organizational chart, which reduces salary costs and accelerates decision-making.

5. Address Variances in Compensation: Including Executive Pay

Your institution can reduce costs by addressing compensation variances across roles. By benchmarking salaries against appropriate peer institutions, you can pinpoint specific positions or units with significant variance in compensation. This analysis enables you to make informed adjustments to salary bands and guide executive compensation decisions, ensuring your pay is both competitive and financially sustainable.

From Strategy to Action

Each of these strategies offers a pathway to achieving significant cost savings. Should your institution have a defined reduction target, HelioCampus is prepared to partner with you to support your goals. Upon prioritization of these strategic approaches, we can deliver scenario or comparison based analyses that model potential financial impacts and identify the most promising areas of focus to help you achieve your institutional goals.

For a deep dive into how we can help you tackle centralization & budget blind spots, you can listen to a recent webinar that shares strategies for measuring ROI and managing bloat. 

If you are a current Labor Cost Analytics client and are embarking on any of these strategies at your institution, please reach out to us so we can ensure you have the data you need to guide strategic decision making.