Tuesday, April 12, 2011

 

A Fearless Prediction

In the next two to three years, we will see a level of personnel movement in higher ed that will dwarf anything we’ve seen since the 1960’s.

I’m basing this on two observations. The first is the increasing median age of full-timers in higher ed, especially on the administrative side. The second is the extinction of pay raises.

There have been recessions before. In previous recessions, I’m told, the drill was as follows: low or no pay raises for a few years, followed by “make them up to you” raises when the money came back. The idea was to reward loyalty among those who stuck around during the bad years.

I don’t foresee the “make them up to you” raises this time around. The political direction of the country being what it is, I just don’t see public employees winning significant gains in the foreseeable future.

That means that for many people, the only way to effect a meaningful increase in salary will be to change jobs. And those who do will be well-advised to negotiate hard at the point of hire, since they won’t be able to count on meaningful raises over time. If you’re fairly confident that any increases over the next half-decade or more will be below the rate of inflation, then you’d best get every penny you can upfront. It’s all downhill from there.

Incumbent employees will cry ‘foul’ over salary compression or inversion, and they’ll have a point. But when the rules favor one course of action over another, you have to assume that some people will act accordingly. Rule out raises for staying in place, and you will get movement. It’s as simple as that.

Some level of movement can be a good thing. When a campus or program becomes too inbred and static, it starts settling for things it shouldn’t. The occasional fresh pair of eyes can keep people honest and bring new perspectives to bear on existing problems. (I’ve seen departments that have gone literally decades between hires; at a certain point, “stasis” becomes “stagnation.”) But there can be too much of a good thing.

At this point, I suspect, we’re in the lag period between a fundamental change on the ground and people fully comprehending the change. We still have plenty of people playing by the old rules, just waiting for the “make it up to you” part of the cycle. But lags don’t last forever. Sooner or later, and I’m guessing sooner, people are going to start adapting to the new reality. When you pay for movement but you don’t pay for stability, sooner or later, you’ll get what you pay for.

All predictions guaranteed or your money back...

Comments:
Interesting prediction. But I wonder whether there really will be such a big movement induced by stagnating wages. 1. Where are the industries/sectors that would hire plus pay a significant higher salary? From what I read in the news (i.e. anecdotal information) many jobless find themselves in a position where they have to accept new jobs that actually pay LESS! 2. Aren't the benefits at most universities for full-time staff still quite good? 3. Aren't people still confused about the way the economy will be going in the next 1-3 years and rather stay in a safe job than changing it?
 
Aidnography, I will respond with my individual view as a young (under 30) faculty member in the sciences (I feel that for some other degrees it may be different).

I wanted this job! I did a cross country job search to find a job as a full time faculty member at a CC and nailed the first interview in my choice city at my choice school! Yes! I also was just recently tenured! Yay again!

Now I see the atmosphere and I am considering leaving. As someone with some outside experience and with the ability to learn quickly I am not in the least worried about my ability to get another job. When I see the initial salaries my friends pull down, my jaw hits the floor.

Re: benefits? We have a pension. I have been saving in a roth IRA because I do not believe for a second that pension will still be the same in 30 years. Hell I dont think it will be the same in 5! The health benefits etc...not that different from other jobs... I dont know why people think differently.

I'm not afraid to say that I am a talented teacher and have highly engaged students. I always wanted to teach but they will lose me and people like me if the current trends continue. I knew I would get less pay and "great" benefits when I took the job and now that is changing. It is changing in such a way that other jobs look much better than they did when I graduated.
 
I fearlessly know that 2/3 of the people in my direct administrative report line will be gone in fewer than 5 years, so that is a good bet at that administrative level in this institution.

Turnover for younger faculty depends more on home ownership, children, and tenure. Good faculty without tenure are the most mobile because they are also unlikely to own a house.
 
I've been doing institutional research for 5 years. I really like my job and the people I work with. I'm also maxed out on salary for my classification and see no raise coming for years. I'm currently doing everything I can to find new work, and my preference (for the first time ever) is to go back to the private sector.
 
as some info from federal workers:
- COLA raises are frozen for the next 3 years. there is talk of moving that to 5 years.
- Step increases may be frozen for 3-5 years, depending on the FY12 budget. in the GS system, there are 10 "steps" per grade, with each step equaling a pay raise. step increases 2-4 occur yearly, 5-7 every other year, and 8-10 every 3 years (meaning it takes 18 years if you started at a step 1 to hit a step 10 before the above described freezes. most of the time though, you increase to the next "level" before that happens).

what does this mean? it means that someone recently arriving at a step 8 will not see a raise for at least 3 years. if they enact the step-freeze, then someone who is ending a step 8 could see a raise not occur for 6+ years.

for the first time [ever], it is probably better to be a contractor for the gov't than a gov't employee. contractors can still give raises, and can still pay for performance. my pay has gone up 56% in the past 2 years as a contractor. my counterparts who are fed'l workers have seen 5-7%, and their pay is frozen for years to come.

in respect to the post, my pay increase is a product of switching jobs (3 different companies in the last 4 years, but i plan to stay where i am at a while). a counterpart/colleague who works at the major U recently got a ~30% raise, but was told his pay would be frozen for a long while, and the raise only occurred because people were threatening to leave in droves.

every employer has a budget for what they can pay for a position. it is their (employer) job to try to get you to accept a low end of that budget, and your job (employee) to try and demand the high end of that budget. the money is there, but you have to play "the game" to get it. you just have to figure out how to get the employer to pony up. the threat of leaving is the best way to do that.

i know a lot of people who have been employed for 10+ years, and who are making less than new hires, but it is because the "tenured" employees have expressed no threat of leaving, and therefore management has no reason to increase pay. people get too comfy, and comfy = static = status quo = no extra pay. the new hires have become much more aware of "the game", and are doing really well at playing it. like it or not, that's how it works now.

if you are good, people will spend money to keep you, and will pay well to hire you. but you have to be really, really good; average won't cut it anymore. and you have to let your management know how good you are, and how other people would be glad to pay lots of money to have you on their team.
 
A similar prediction was made about twenty years ago, when I was in graduate school. We were told that faculty and administrative positions would open up due to mass retirements of people who were hired during the sixties and people who would foresake the academic world for the private sector (which, at the time, was in a recession).

I think a lot of people assume that because something is going on at their institution, that is how things are throughout their field. Just because your department in your CC is hiring six new people, it doesn't mean that there is going to be a great spate of hiring throughout academia.
 
It'll be tricky to find new work once unemployment spikes to 15% later on this year.

30 years of conservative economics has its costs...
 
Printing money (and spending it) like it's going out of style also has its consequences.
 
@Anon, let me know when those invisible bond vigilantes begin to come into existence.
 
If the market goes into the tank again, no one is leaving as their 403bs hit the sidewalk
 
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