University defends cost-saving measures

Promises of millions in savings at the University of Otago have been thrown into doubt as staff numbers balloon in a division set up as part of controversial restructuring.

When the university advanced plans to restructure its non-academic staff in 2017, it said the changes, which included cutting 160 full-time equivalent (FTE) jobs, would end up saving $14.9million a year.

The restructure involved bringing together jobs spread across multiple departments into a new shared services division which the university said would be more efficient and lead to cost savings.

But instead of staff levels dropping, staff numbers in the new division appear much higher than planned.

The university business case said the new division would need 526 FTE to staff, plus additional staff to transition to the new way of working.

By 2020, staff numbers in the division were 691 FTE, 164 FTE more than first suggested.

Across the university, in 2016, there were 2390 FTE non-academic staff, in 2020, there were 2497 FTE, another seemingly unplanned increase.

However, the university was operating in a different environment at present, university chief operating officer Stephen Willis said.

The fallout from the emergence of Covid-19 and a growth in student numbers of 7.7% had both required more staff.

The university had an increase in research funding, which had also resulted in additional administration staff beyond the scope of the restructuring, Mr Willis said.

"If there had been no pandemic, no increase in student numbers, or research funds, it may have been easier to compare expected staff FTEs with actual staff FTEs, but in the current environment we cannot compare apples with apples," he said.

The $14.9million a year the university was going to save once the restructuring had settled in in fact relied on a significant amount of work being done in the background, including a series of "large and complex" IT programmes, Mr Willis said.

That whole programme of work was still in its early stages and had been delayed by the pandemic, he said.

The change to a shared services approach was made for a variety of different reasons, including to make sure there was a consistent standard of support staff across the university, to be able to do more with less to meet peaks in service demand, and to support the future growth of the school, Mr Willis said.

He echoed former vice-chancellor Harlene Hayne’s assessment of the restructure when she left the university earlier this year and said the new staffing structure at the university helped the school get through the pandemic.

"If our operating model was fundamentally flawed, it would have broken in 2020," Mr Willis said.

"On the contrary, it allowed the university to achieve what would have been impossible under our old model and emerge strongly from such a disruptive year."

Meanwhile, the 2020 student opinion survey of administrative and support services provided by the university showed that overall 80% of students were either very satisfied or satisfied.

In total, 17% were neutral, 3% were dissatisfied and 1% were very dissatisfied, he said.

Last year, university human resources director Kevin Seales said the $14.9million a year savings were not expected until five years after the first year of the restructure’s implementation.

Mr Seales said after the first full year of the restructure, in 2019, the staff numbers that were part of the review decreased by 31 FTE.

The savings amounted to $2.2million in 2020, he said.

The Tertiary Education Union could not be reached by deadline.

hamish.maclean@odt.co.nz