UI Pres: Employee Reduction Program Could Be Used Again

University of Illinois President Michael Hogan said a voluntary employee reduction program on the Urbana campus went so well that it should be considered at the Springfield and Chicago campuses.

Faculty and staff were given a chance last year to resign or retire, and walk away with half of their salary, up to a maximum of $75,000. More than 480 employees left the U of I last spring to take the buyout, while 81 of those employees returned on a part-time basis. In addition, 70 professors are expected to leave in August.

The U of I's Associate Provost for Human Resources, Elyne Cole, said the number of employees who agreed to leave their jobs was "higher than expected." She said the university is expected to save $19 million annually because of the program, and those savings will trickle down to departments where cuts were made.

"It reduces the workforce both in terms of numbers and our overall salary obligations that we have for employees," Cole said. "And it will allow those units to make better decisions about how to use their resources."

While Hogan acknowledges the program's success in saving money, he said there have been costs attributed to those savings.

"You're losing teachers and you're losing workers," Hogan said. "So, that's one reason they do the re-hiring of retirees because you can still save money and get the service performed a little cheaper while you're building of cash reserves that could maybe help you make a permanent hire."

During a meeting Monday with the audit and budget committee, Hogan commented about a recently policy adopted by the U of I's Board of Trustees aimed at limiting tuition increases to no more than the rate of inflation. He said this will leave the university still looking for money for pay raises and won't strengthen the university's financial situation.

The state currently owes the U of I nearly $440 million in unpaid bills.