KU says it is getting serious about raising wages to compete with the private sector; some could begin in January, but uncertainty remains
photo by: Shutterstock and Journal-World File Photos
One of the most important statistics in Lawrence has long been the number of college students who descend upon the city for the start of a new school year.
It helps determine issues from big to small — how often the cash registers may ring at local businesses to how many motorists we may encounter driving the wrong way on Kentucky or Tennessee streets.
As the school year approaches, the number may be more important than ever for one group: faculty and staff at the University of Kansas.
That number may determine how much of a pay increase they receive.
The coming year is shaping up to be both a unique and an important one for pay increases at KU. University leaders are planning on two types of pay increases for faculty and staff, and one is much more speculative than the other.
The first is a fairly standard one, although not one that KU employees have been able to count on each year. KU leaders are feeling confident that they will be able to provide a 2.5% cost-of-living pay increase to basically all faculty and staff at the Lawrence campus. State legislators have approved funding levels that are expected to support those wage increases, and the final piece of news came on Wednesday when the Kansas Board of Regents approved a 5% increase in tuition rates for KU.
The 2.5% increase is less than the 5% cost-of-living increases KU employees received during the last school year. But KU leaders are touting that they are providing pay increases in back-to-back years, which has not always been the case.
But there is a wild card lurking out there that may produce much more significant pay increases for some, but not all, KU employees. Those potential pay increases fall into the category of market wage adjustments. It has long been talked about that many types of jobs at KU don’t pay a wage that is similar to what employees would make if they were doing the same job in the private sector.
That talk hasn’t led to much action, but KU leaders say that’s about to change.
“This is coming. It is coming,” Jeff DeWitt, chief financial officer for KU, said of market-based pay adjustments. “I know people are cynical that it will ever happen, but it is a major focus.”
It is a major focus, though, with a caveat. In recent budget presentations, DeWitt has said that KU plans to start implementing some pay increases to bring select employees closer to market wages in January 2024. But he also adds that KU will start moving to market-based pay “as funds are available.”
He has further said that enrollment totals for the next school year, which begins in August, are likely to be a determining factor in how much the university will be able to give in market-based wage increases.
KU leaders haven’t provided other details, such as whether KU needs to see an increase in enrollment to fund the wage increases, or whether holding enrollment steady would be enough to fund the program.
In a brief interview with the Journal-World this week, Chancellor Douglas Girod was reluctant to make any commitments on that front.
“It is a fair question, and I don’t know that we know the answer yet,” Girod said. “Certainly enrollment growth makes it a lot easier to do that. So, we will know a lot better toward the end of fall semester financially where we are and how much we can pump into this process, which we know we need to start doing.”
If enrollment growth is required for the wage increases, that could be dicey territory. KU’s Lawrence campus generally has been posting declines in enrollment, but last year showed signs of a bounce-back. The freshman class was the largest the university has had since 2008. Depending on which set of statistics you use — full-time equivalent students or a simple headcount of students — KU’s enrollment either grew by about a half-percent from a year earlier or declined by about a half-percent.
Either way, it was a more positive trend than KU has seen in recent years. By either standard, KU’s enrollment is down by a little less than 5% from 2017 levels. KU also hasn’t yet seen its enrollment rebound to pre-pandemic levels, and it faces demographic challenges in a state that is producing fewer college-age students.
Girod, though, expressed optimism about the interest level KU is receiving from prospective students.
“We are pleased with what we are seeing,” Girod said. “I think it will be another strong freshman class. It is summer time and a lot changes over the summer, so we won’t know until they all show up. But we are feeling good about what we are seeing right now.”
While it is still months away until KU will know how much money it can commit to market-based pay increases, key work is underway. An outside consultant is creating wage benchmarks for both faculty and staff positions at KU. That study uses data from the private sector and other universities to determine what the market as a whole is generally paying certain positions.
KU hopes to have that data in hand by the fall. KU will know its enrollment totals for the new school year by early September. Those numbers will be important, but so too will be an initiative KU is implementing. DeWitt calls it “continuous improvement,” which is shorthand for a strategy aimed at making KU more efficient in a variety of administrative and other tasks. Those efficiencies could be tied to how KU purchases goods, how it provides certain services or how it conserves energy, just to name a few.
At the center of the program is a call to action for KU employees to submit their ideas on how to save money and make processes more efficient. KU has committed to use any dollars saved from those suggestions to fund the market pay program.
“You really, really want to get out there and bring your ideas forward,” DeWitt said, noting that a slew of good ideas will allow KU to implement the market pay program more quickly.
More quickly is a relative term. It is not likely that a market pay program will be completed in a year or two. KU officials haven’t provided a timeline for how long it may take to get all its positions up to the benchmarks.
In the recent interview with the Journal-World, Girod said it took five to seven years to complete a market-based pay plan at the KU Medical Center, which Girod oversaw before becoming KU’s chancellor. Girod, though, emphasized that doesn’t mean some employees will go five to seven years without seeing any type of raise. KU, under DeWitt, is beginning to build budgets multiple years at a time. Those budgets start with an assumption of a cost-of-living increase. The upcoming school year has a 2.5% cost-of-living increase, and the following year also budgets for a 2.5% cost-of-living increase.
Girod said those cost-of-living increases are necessary to stop employees from falling further behind the market. The market-based pay program would provide wage increases in addition to the cost-of-living increases.
But, it is likely going to require some patience. Plus, administrators are girding for some tough choices on which positions at the university should be first in line to receive the market-based pay increases. It also could involve a shrinking of staff. KU has said it may use employee attrition to help fund some of the program, meaning KU might choose to leave some positions unfilled and devote those wages to the market-based pay program.
“It is going to take many years to really get to where we want,” Girod said. “But we know if we don’t get started we will never get there.”