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News Release

September 15, 2004

Contact:

Michael Peña, News Service, (650) 725-4275; michael.pena@stanford.edu

Staff hiring freeze lifted, but prudence still a high priority

The staff-hiring freeze that has been in effect since the fall of 2002 ended last week. However, officials continue to urge managers to exercise fiscal discretion.

The university's schools and administrative units will no longer be required to obtain prior review from their dean, vice president or vice provost before posting a position, Provost John Etchemendy and Vice President for Business Affairs Randy Livingston wrote in a memo to senior administrators.

They encouraged senior managers to establish an appropriate process for reviewing and approving new hires within their units. The memo also asked managers to consider changes in organizational needs over the past two years and decide whether a position that has been open for the past two years still needs to be filled.

Although the university's financial picture continues to improve, "we did not want to send out the message that we should open the hiring floodgates," Livingston said.

He added that fiscal prudence is a constant priority for the university: "As always, we expect you as leaders and senior managers to exercise appropriate discretion."

The hiring freeze, first announced on Oct. 25, 2002, came after a $17 million operating deficit at the close of that fiscal year (FY '02), on Aug. 31. The freeze, along with mandatory closures in December and budget cuts of up to 12 percent by individual schools and administrative units, were meant to make up for an 8 percent drop in general funds that the university faced in FY '03. (The general fund typically represents about a quarter of the university's consolidated budget.)

The university also imposed a salary freeze during FY '04.

Under the hiring freeze, all openings, including temporary and casual employees and staff hired through employment agencies, were placed on hold. The freeze (not applicable to faculty recruitment) and other cost-cutting measures were designed to allow the university to diminish the need for painful layoffs.

"The university was faced with extraordinary economic conditions, and the measures we took - including the hiring and salary freezes - helped us to weather those conditions with minimum impact on existing staff positions," Etchemendy and Livingston said.

According to the university Budget Plan for FY '05 published last June, revenues over the past year were forecasted to total $2.52 billion, with an $18.5-million surplus after expenses. This year's budget is expected to include revenues of almost $2.66 billion - a 5.3 percent increase over last year - with a projected surplus of $6.7 million.

Some 250 staff positions were open at the start of the freeze, and while it was in place, the university's administrative units reduced staff by approximately 120 positions, or 5.5 percent, Livingston said.

But because of ongoing hiring in the School of Medicine and Residential and Dining Enterprises - both units are financially self-sufficient - the overall university netted about 227 new staffers, or nearly 3 percent. The School of Medicine added 247 staff members, while Residential and Dining Enterprises (R&DE) added 116.

Increases in Medical School staff reflected growth in sponsored research grants and contracts, especially funding from the National Institutes of Health. Increases in R&DE staff reflected growth in auxiliary revenues from several new restaurants - Olives, Lynx Café and the university's takeover of Tresidder Union's eateries.

The biggest impact of Wednesday's announcement may be that it simplifies the employment process, Livingston said.

"I would say it is an official end to the freeze, but you could also call it a simplification of hiring processes," he said. "I don't expect the pace of hiring will change very much after this announcement."

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Comment:

Randy Livingston, Vice President for Business Affairs, Chief Financial Officer, (650) 724-0213; Livingston@stanford.edu

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