Considering the Consequences of Increasing Reliance on Outsourcing and Contingent Labor in Higher Education

Neal H. Hutchens
Pennsylvania State University

To what extent should student affairs professionals be concerned about the outsourcing of services or the use of contingent labor in higher education?  One of the most pressing issues facing colleges and universities deals with the creation of a financial structure capable of sustaining the higher education enterprise.  As part of searching for ways to control costs, one strategy increasingly looked to by institutions involves reliance on staff not employed as full-time institutional employees.  Whether outsourcing labor needs to a third party vendor or using part-time employees (e.g., adjuncts for teaching), colleges and universities have sought to use outsourcing or “contingent” employees as a means to control costs.  Often, these employees must work without the same level of wages and benefits afforded to full-time college or university employees.  This column examines legal and ethical issues raised by the increasing reliance by higher education institutions on outsourcing and the use of contingent labor.

Outsourcing of Services . . . And Employees

A primary justification for the strategy of cost savings through outsourcing relates to permitting institutions to focus on their “core” missions related to educating students and to research and service (Kiley, 2013).  Prompted by an ongoing financial crunch, colleges and universities are experimenting with substantial expansion of outsourcing activities.  A public/private partnership  involving student housing at the University of Kentucky (UK) that garnered national headlines illustrates one such broad-based initiative (Carlson, 2012).  Seeking to replace its outdated housing infrastructure, UK entered into a far-reaching agreement with a private company to take on the costs associated with the construction of multiple new residence halls, as well as responsibility for the maintenance and upkeep of campus residence halls.

The type of public-private partnership, including its outsourcing aspects, entered into by UK does not represent a new development.  Colleges and universities have previously looked to third party partners in student housing arrangements.  Dining and parking services and campus bookstores provide common examples of other types of services now often undertaken by (i.e., outsourced to) third parties.  Institutions have also looked to third party call centers to assist in answering student inquiries in such areas as student financial aid.  Cleaning and custodial services provide yet another example of outsourcing.  The UK example attracted national attention because of the scope of the agreement, which is intended to extend eventually to all or most student housing on campus.

While the agreement called for UK student affairs professionals to retain control over programmatic and management aspects of the residence halls, UK would not employ the individuals in charge of the physical upkeep of the buildings.  Instead, the private company will now employ these workers.  Current UK employees working in residence halls who potentially might be displaced by the arrangement reportedly were given priority in applying for a position with the private company.

Even when a college or university takes steps so that individuals are not displaced when outsourcing takes place (which is admirable), these kinds of deals raise important ethical questions, particularly related to the compensation provided to these individuals.  Namely, are individuals working for such third party contractors compensated at a level comparable to those people employed by the college or university?  If not, then are differences in compensation in alignment (or not) with an institution’s mission and values?

In addition to wages, outsourcing may result in employees working for third parties not receiving the kinds of benefits afforded to college and university employees.  For instance, many institutions offer some level of educational benefits to their employees and often to their partners or dependents.  Such educational benefits may prove especially important for employees of limited financial means, who may often be among the groups of employees subjected to outsourcing.

Outsourcing creates important alterations in the legal employment relationship between institutions and people on campus performing work on behalf of the college or university but in actuality employed by a third party (i.e., not by the college or university).  The university does not undertake the obligation to compensate these individuals in the same manner as it does with those employed by the institution.  Instead, the legal employment relationship is with the third party entity rather than the college or university.

The current financial climate in higher education makes outsourcing a strategy easy to understand.  Colleges and universities are struggling with rising costs and, in the case of public institutions, with continuing disinvestment by states in their public colleges and universities.  Difficult financial circumstances have left colleges and universities with hard choices to make, and outsourcing is one way that institutions have sought to control costs and to focus resources on their core functions.  The challenge in making such choices involves striving to achieve a balance between legitimate financial considerations and loyalty to an institution’s values and mission.  The shift that has taken place at many colleges and universities in relation to “contingent” faculty provides a context to reflect upon the possible negative consequences of such choices.

Non-Tenure Track Professors: The New Faculty Majority

Faculty employment arrangements in higher education have undergone dramatic changes in recent decades.  During this time, there has been a steady erosion of faculty employed in tenure-line positions.  According to the American Association of University Professors (AAUP (n.d.), in 1975, professors employed in tenure-line positions accounted for about 56% of all faculty positions.  This percentage fell to approximately 42% in 1995, to around 30% in 2007 (AAUP, n.d.), and declined to less than 25% by 2011 (Curtis & Thornton, 2013).

Rather than working in full-time, tenure-line positions—or even in full-time non-tenure stream positions—the majority of faculty in higher education today are employed as part-time instructors.  In contrast to faculty employed in tenure-line positions, these part-time adjuncts are often employed as at-will employees.  This means that a college or university may dismiss the instructor at any time and without any reason, subject only a few limitations.  While some adjuncts have full time “day” jobs and teach part-time for professional fulfillment or to earn extra income, this is not the case for many.  Instead, adjuncts often teach courses at multiple institutions.

Colleges and universities have received considerable criticism for their reliance on adjunct instructors.  Similar to concerns with the outsourcing of services in higher education, increasing reliance on adjunct faculty raises troubling ethical questions for higher education.  As part-time, or contingent, employees, these instructors are not afforded the same kinds of wages and benefits as full-time institutional employees.  That is, even while carrying much of the institutional teaching load, these individuals are excluded from many of the employment benefits afforded to full-time college and university employees.

Concluding Thoughts

In the continual quest to curb costs, colleges and universities have looked to their employment arrangements as one means of cost savings.  Reliance on outsourcing strategies or on contingent faculty has resulted in growing numbers of people working on college and university campuses not afforded the same kinds of wages and benefits as provided to full-time institutional employees.  In essence, colleges and universities are creating a system of “haves” and “have nots” when it comes to those carrying on the work of the institution.  Some employees receive the privileges and benefits of full-time institutional employment, but many working on our campuses do not.  This state of affairs creates serious questions for college student affairs educators.  Campus stakeholders have important roles to play in helping their institutions to ask important questions about outsourcing and contingent labor use in higher education.  The student affairs profession can help push colleges and universities to weigh not only the benefits but also the costs associated with such strategies.

Discussion Questions

1. To what extent is the ACPA’s Statement of Ethical Principles and Standards applicable to issues related to the use of outsourced and contingent labor in higher education?
2. To what extent or in what ways does your campus monitor issues related to the wages and benefits provided to individuals working on campus who are employed by third party vendors?  If not, should such monitoring exist?
3. In what ways should student affairs professionals and their professional organizations seek to encourage dialogue and critical examination regarding the use of outsourcing and contingent labor in higher education?

References

American Association of University Professors.  (n.d.).  [Fact Sheet]: Trends in faculty status, 1975-2007: All degree- granting institutions; national trends.  Retrieved from http://www.aaup2.org/research/TrendsinFacultyStatus2007.pdf

American Federation of Teachers.  (2009).  American academic: The state of the higher education workforce 1997-2007.  Washington, DC: Author.  Retrieved from http://www.aft.org/pdfs/highered/aa_highedworkforce0209.pdfw

Carlson, S.  (2012, February 12).  Colleges and developers find common ground to build student housing.  The Chronicle of Higher Education.  Retrieved from www.chronicle.com

Curtis, J. W., & Thornton, S.  (2013).  The annual report on the economic status of the profession, 2012-13.  Academe, 99(2), 4-19.

Kiley, K.  (2013, July 15).  Outsourcing and new revenue are dominant themes at annual business officers’ meeting.  InsideHigherEd.  Retrieved from http://www.insidehighered.com/news/2013/07/15/outsourcing-and-new-revenue-are-dominant-themes-annual-business-officers-meeting

About the Author

Neal H. Hutchens is an associate professor in the Higher Education Program in the Department of Education Policy Studies at The Pennsylvania State University.

Please E-mail inquiries to Neal H. Hutchens.

Disclaimer

The ideas expressed in this article are not necessarily those of the Developments editorial board or those of ACPA members or the ACPA Governing Board, Leadership, or International Office Staff.