Updated February 19, 2020
As Oberlin College & Conservatory continues to take steps toward long-term financial sustainability, the college is formally considering a comprehensive plan to contract with outside vendors for dining and housekeeping services currently performed by Oberlin employees. This change would help the institution focus on its educational and academic mission, improve service, and create significant cost-savings in the long run. The following FAQ addresses a variety of issues related to this proposed change.
Why is Oberlin considering contracting with vendors for dining and custodial staffing?
Over the last two years Oberlin has taken essential steps to ensure that it continues to fulfill its distinctive mission as a leading liberal arts college and conservatory of music. Some of this is reflected in exciting new programming announced over the last few months. Other efforts have required shared sacrifice as we face unprecedented financial and demographics challenges, including an unsustainable structural deficit.
Yet there is more we must do. The new educational opportunities, together with the sacrifices so many of you across campus have made, will not guarantee long-term success. We must continue to refocus resources to support Oberlin’s core mission. This will require further difficult trade-offs, and it will touch additional parts of our campus.
We believe this plan would fulfill a critical part of that need. This is a key piece of our plan to ensure the financial sustainability, accessibility, and excellence of this institution.
How important are these cost savings?
By 2018 Oberlin had been running deficits for several consecutive years. Without the significant actions taken in FY 2018 and FY 2019, as well as the additional reductions called for in One Oberlin, the cumulative deficit would have grown to a devastating $162 million by FY 2028 — greater than the total annual operating budget, and an existential threat to the institution. Each year that goes by without correcting that trend, Oberlin’s options dwindle — the time to act is now.
Why dining and custodial?
63 percent of our budget is dedicated to employee compensation. We have already taken a number of steps to manage compensation costs: We have reduced our healthcare benefits, our retirement benefits, and the size of our administrative staff — all financial levers identified in the One Oberlin report. We have contracted tenure track faculty lines and are relying less on visiting faculty. But to ensure our excellence, we must continue to address the largest share of our budget while we simultaneously invest in our future.
Dining services and custodial services represent two significant operational costs for Oberlin. As a relatively small institution, Oberlin cannot realize the economies of scale or levels of service achieved by outside organizations that specialize in food service and custodial service.
Isn’t this a big step?
This is not a decision we take lightly. We understand the gravity of this change for those directly affected; they are valued members of our community, and we are taking significant steps to help these individuals make a successful transition. We also understand that this will affect other members of campus community, and we are working to communicate with transparency about the process that is underway, and about the urgent need behind it.
Why not cut elsewhere?
Over the past few years we have been working to make $17.3M in reductions by 2025. These current efforts are just a part of the overall reduction plan even as we simultaneously invest in our core mission. This current effort also comes after several years of pay freezes and benefits reductions amounting to $5.5 million in compensation for faculty and administrative and professional staff. The equivalent of at least 25 full-time faculty positions will have been eliminated by FY2024 in addition to the elimination of some visiting faculty positions. Additionally, 50 administrative and professional staff positions will have been eliminated by FY2024. We are committed to ensuring that no single category of employees bears the burden for cost reductions alone, including those who have already made sacrifices.
How is this consistent with Oberlin’s values?
Oberlin has put its priority on building excellence in its core mission while ensuring the financial sustainability needed to serve generations of students to come. At a time of financial pressure on students, families, and the institution itself, Oberlin will undertake the mission-centered activities the institution can best provide, while using outside expertise where partners can improve service and conserve resources.
What happens with the money Oberlin saves?
As noted, the long-term savings realized through this plan make up one step toward correcting years of operating deficits. But in order to fulfill its mission in the world and offer the distinctive education that will shape future generations of students, it is not enough for the institution simply to balance the budget in the near term. To generate the tuition revenue needed for long-term sustainability, Oberlin must invest in new programming. And as higher education undergoes a time of transformation, these investments in the academic and creative endeavors are critical to preparing our students for lives of purpose and adding to human knowledge and experience.
What happens if Oberlin does not take this step?
Through the Academic and Administrative Program Review last year, the campus community identified several cuts it would not make, such as eliminating academic departments, reducing financial aid available to students, or sacrificing key elements of the Conservatory, the Art Museum, the College, and our residential experience. If Oberlin is unable to make sufficient reductions in other parts of the operating budget, it will become harder and harder to guard those valued elements at the core of our mission.
Is this connected to a need to pay the Gibson’s judgment?
This effort is completely independent of the Gibson judgment and is directly connected to the need to support Oberlin’s mission and improve the College’s operating budget as identified by President Ambar in her first few months on campus. The Gibson’s matter is now on appeal and therefore it would not be appropriate to comment further.
Who will undertake the services currently offered by Oberlin’s employees?
We will carefully examine the options available, seeking requests for proposals to secure the very best services and value available to Oberlin, while achieving a transition that is consistent with our core values. Because we are sharing the news of this plan at a very early stage, we have only begun preliminary conversations about those options. As the process of identifying best options, negotiating with vendors, and securing contracts develops in the weeks and months to come, we will update the campus community on key steps.
How many Oberlin employees will be affected?
Roughly 52 full-time dining employees of Oberlin could be directly affected by these plans, along with roughly 56 full-time custodial employees. Final counts will depend on the number of positions filled at the time of the transition.
What will happen to those employees?
For those who cannot or do not want to work with the vendors, Oberlin will work with the UAW to discuss what steps can be taken to ease this transition. Some employees will be eligible for retirement. Through their collective bargaining contracts, some may be eligible for other employment at Oberlin.
It is our hope that employees would be offered the opportunity to seek employment with the new vendors and continue working at Oberlin. For those who cannot or do not want to work with the vendors, Oberlin will provide outplacement support. For those who do not quickly find employment, we anticipate providing support and severance that is in keeping with other Oberlin employees who were displaced in FY2020.
How much will this save?
Based on preliminary conversations, we expect the college can realize $2 million in annual savings per year collectively in dining and custodial operations.
What will the cost of the transition be?
In order to minimize disruption and to ensure a seamless transition of services, we expect to incur one-time costs in 2020. We will work with vendors to minimize these upfront costs, but we believe that these short-term reductions in savings are worth the opportunity to reinforce our values of employee fairness; service to our students, faculty, and staff; and excellence in all that we do.
How were employees notified?
Because dining and custodial employees are represented by the UAW, this process begins with official notification to union leadership, which was provided on Feb. 18. Senior administrators then met face-to-face with affected employees at meetings on Feb. 18 and Feb. 19, to inform them of the transition under consideration and answer questions. This sets in motion a period of negotiation between Oberlin and the UAW, which is the appropriate forum for discussions with this group of employees.
While legal notification to the union is required, the college chose to provide it months earlier than is required for the transition under consideration. We did this out of respect for the employees, to allow them ample time to learn about their options and make their plans. This is part of a larger commitment to make the transition in a way that is considerate and respectful of these employees, who are members of the Oberlin community, and whose service we appreciate.
How was the campus community notified?
After union leadership and the affected employees were notified on Feb. 18, President Carmen Ambar sent an email to all Oberlin students, faculty, staff, and alumni, laying out the plan under consideration, the rationale, and the context for this step. President Ambar and other senior leaders then met with groups of students, faculty, staff, and alumni that afternoon; local officials and community leaders were also notified in phone calls that afternoon. A website containing President Ambar’s emails, this FAQ, and other relevant information was posted that day as well.
Choosing to inform the entire college community openly and directly, at the very beginning of the process, means that some questions cannot yet be answered. Key information will be developed as part of the collective bargaining process and potentially through the process of soliciting and evaluating vendor proposals – neither of which has yet begun. President Ambar and senior leaders felt it was more important to be open and forthcoming with the campus community as these conversations begin, out of respect for the campus community, and with an understanding that a significant step like the one under consideration here affects the whole community. Building on the spirit of transparency, data-based discussion, and mutual respect that has guided the entire One Oberlin process, the college will continue to provide updates as they become available.
Is this plan part of One Oberlin?
Last year’s Academic and Administrative Program Review, and the resulting One Oberlin report and recommendations, made clear the urgent need for the institution to reduce operating expenses. The report also identified employee compensation as the institution’s single biggest cost, called out the levers for change that are available, and provided valuable background about Oberlin’s cost structure compared to peer institutions. One Oberlin, however, did not make recommendations in favor of any specific reduction in employee compensation.
Are the affected employees represented by unions?
Yes — both the dining and custodial employees affected are represented by the United Auto Workers.
How does that affect this plan?
Because both dining and custodial employees are covered by collective bargaining agreements, we have notified the union that we are formally considering this option and have asked to schedule these negotiations.
Will this eliminate the union?
No. The UAW will continue to represent other groups of employees at Oberlin, and we look forward to continuing good relations with all of Oberlin’s employee unions.
Will the employees hired by the vendors be unionized?
It will ultimately be up to the vendors and their employees to decide upon the nature of their relationship, which will depend on a variety of factors.
What is Oberlin’s goal for custodial and dining services?
In order to support its primary mission of teaching, learning, scholarship, and creativity, Oberlin is committed to providing a campus environment that is safe, clean, and sustaining, providing an environment in which our students, faculty, and staff can do their best work.
How will this plan affect the level of service?
By selecting vendors with national experience and a specialized focus on providing these services, we believe we can improve the safety, cleanliness, and the quality of residential and work life for Oberlin students, faculty, and staff. That, in turn, will benefit student recruitment and retention — important elements in our effort to build long-term excellence at Oberlin.
How do we believe the vendors will be able to provide services at a lower cost?
Savings are realized through the vendors’ ability to align compensation with market rates, while achieving greater efficiencies and economies of scale — benefits of their industry expertise, national reach, and singular focus on these services.
Have other colleges tried this?
Throughout higher education, hundreds of institutions have found that they can manage institutional costs and improve outcomes by employing outside vendors to perform services that are not part of the institutions’ core expertise.
How does this plan address the safety of the campus community?
The safety of our students, faculty, staff, and visitors is our top priority. Oberlin will work closely with potential vendors to ensure that any employees they bring to campus will respect and contribute to that safe environment. Oberlin requires background checks of its own employees, permanent and temporary. Oberlin’s vendors conduct background checks of their permanent and temporary employees who work on campus. Such safeguards will be a priority in any negotiations with future vendors.
How will this affect students employed in dining services?
There is no immediate effect on student employees. While the details of student employment would be worked out in negotiations with potential vendors, we anticipate and intend that the same sorts of opportunities for student employment that are available now would be available in any new arrangement.
Will Oberlin consider replacing other groups of employees with outside vendors?
While we have to continue to consider all options for controlling costs in years to come, we do not anticipate similar transitions on this scale beyond custodial and dining services. We hope that this will pave the way for a period of sustainability and stability in years to come.