Filling top in administration spots costs UNC $840K

If anyone should be happy about chancellors quitting after just years on the job, it’s William Funk.

The CEO of a recruitment firm that specializes in higher education, Funk stands to make a third of a chancellor’s starting salary — typically more than $100,000 plus administrative fees. The more chancellors who leave, the more money he stands to make.

But Funk is worried.

“All this turnover is great for my business, thank God for it,” said the CEO of R. William Funk and Associates. “What does it mean for higher education? I’m not so sure. I’m worried that there’s so much turnover that we’re losing something in terms of continuity of leadership.”

Funk is one of several companies which has profited off shake-ups in South Building during the last two years. UNC has spent more than $840,000 to replace seven positions in two years — a number that will likely increase as it tries to fill three more administrative spots.

This estimation is based off UNC’s contracts with search firms and the starting salaries of seven administrators. It does not include administrative fees assessed by the search firms.

In an interview last week, Chancellor Carol Folt said it was difficult to learn about UNC and build a team at the same time.

“At the time you’re doing that, that is not easy. That probably wouldn’t be your dream. But now, almost a year and three quarters later, I have this team, and perhaps because we’ve gone through these tragedies and triumphs together, I think they’ve really forged an incredible bond.”

Though Folt says her team could be better off due to turnover, some higher education experts say it results in costly search firm contracts, boosted administrative salaries and a disrupted university vision.

Funk said presidents of public colleges have a tenure of about five to seven years. When chancellors or presidents depart, many other top-level administrators do, too.

That’s exactly what happened after Folt accepted the chancellorship.

“The day I started was the day after I left my other job, there was no gap,” Folt said. “... I was also coming into a completely empty leadership team. There wasn’t anybody there, I got a provost on the first day.”

Presidents leave for a couple reasons, such as the university governing board changing hands or presidents feeling vulnerable and leaving prematurely. In other cases, Funk said, presidents simply seek a higher salary at a different institution.

But now it’s not just university chancellors and presidents. Vice chancellors of student affairs, finance, development and other positions are also leaving at increasing rates, which has created new business for executive search firms that handle universities’ recruitment.

“When I started doing this work nearly 30 years ago, the only time schools would go out and use a search firm were for presidents, chancellors (and) vice presidents of developments,” Funk said. “It was expensive.”

Calls to Matthew Fajack came often. He usually picked them up and said he wasn’t interested — he was happy at his job at the University of Florida. Then came a pretty persistent call. UNC needs a chief financial officer, said the caller — an executive search firm.

“The first time, I was like, ‘I’m not interested,’” Fajack said. “And then they called back and said, ‘Hey Matt, you really should consider this, let me tell you about Chancellor Folt and the provost.’”

Fajack, now the vice chancellor for finance, said search firms offer a network of candidates.

“Search firms are a good value,” he said. “Most, not always, the best candidates have jobs they love. They’re doing great and aren’t out there looking. That’s why you need a search firm that has a network of people.”

With Chancellor Carol Folt, whose salary was $520,00 in 2013, Funk’s firm capped its costs at $120,000 and about $12,000 in administrative fees, according to UNC’s contract.

“Of course, being a consumer of those services I would love to see more competitive pricing,” Fajack said. “They don’t seem to come off those prices.”

David Schultz, a Hamline University political science professor, said turnover often traces back to money. College administrators are coming from the business or corporate world rather than academia now, he said.

“They come from the corporate model where they’re going to jump when they see a better opportunity — more money, a better-titled position,” Schultz said. “They feel if they don’t jump then when the next administrator comes in, they’ll be responsible for X, Y and Z.”

The increased turnover and use of search firms has increased administrative salaries, Schultz said.

“There are all kind of financial incentives,” he said. “(Search firms are) representing individuals who want jobs — they have an incentive to get them the highest salary as possible. There’s no indication that these firms are producing qualitatively better candidates.”

Michael Miller, a professor at the University of Arkansas who has studied the impacts of provost turnover, also said he doesn’t see the value of the search firms.

“I don’t think an institution can just take out an advertisement and will hire the best person — individuals have to be recruited,” he said, adding that provost networking can also be a good alternative.

UNC did not use a search firm to find its Title IX coordinator, Howard Kallem, who left after just a year.

No search firm has been hired yet to find his replacement.

When Folt started last academic year, she embarked on a “listening tour” around the campus to learn schools’ different goals. She hasn’t revealed any sort of strategic plan or broad administrative change. If the average tenure of a chancellor is five or seven years, she would have at least three years left.

Schultz said disruption harms universities long term.

“You create short term horizons,” he said. “They may not develop academic programs that will have longer term benefits.”

Funk agreed, saying the schools that advance themselves have continuity in leadership.

“After five years you finally understand the place. Ten years should be the average tenure. That’s the conundrum. There might be too much damn movement.”

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