What’s in a word?

In English, it’s a university. In Welsh, it’s prifysgol. (Pronounced something like preeve-us-goll.) A bit of digging into those two different words can tell us a lot, I think, about the underlying reasons for the industrial action taking place in many UK universities today and for the coming days.

The industrial action (I think technically it looks like two different but overlapping actions) has a number of immediate causes. One is pensions – a dispute about USS contributions, the nature of the scheme and sustainability. The other is pay and conditions, including equality. (nb I’m not trying to provide a detailed account of the issues, just giving the context. The UCU website https://www.ucu.org.uk/heaction sets out the issues as they see them.)

The two words help us to understand the underlying issues.

Let’s go English language first. University comes from universitas – a Latin word meaning, roughly, a single body. A university is, in the medieval concept, a single corporate body, staff and students alike being subject to specific laws and rules, distinct from the laws which apply to others outside the community. And although the legal framework has changed in the last 800 years or so, universities do (claim to) hold values of collegiality. Members of university Senates and Academic Boards – at least those who aren’t on the university executive – behave in ways consistent with universities being a single corporate community.

Now the Welsh language word. Prifysgol is a compound word: Prif – meaning something like ‘main’, or ‘chief’, and Ysgol, meaning ‘school’. So a Prifysgol is the main school. Universities are the most advanced teaching organisations we have. And in the last twenty years or so (perhaps longer if you go back to the Jarrett report in the mid 1980’s) there has been an emphasis on value for the student and the transactional nature of the student contract. This is most pronounced in England – where there is now a regulator in the student interest, rather than a steward looking out for the sector as a whole – but the change can be seen across the UK in, for instance, the rise in the number of complaints made by students. There’s a correlation with the introduction of tuition fees for full-time undergraduate study, but I suspect you’ll also find a correlation with the increasing size of universities and the increasing proportion of people within an age cohort who go to university.

On these understandings, the strikes speak to two things. Firstly, as satisfying the students becomes more explicitly important, and university managers seek to identify what is wrong in a given situation and how to improve it, the autonomy of individual members of staff – academic and professional service – is diminished. The desires for consistency of approach to students, and for economy of action and cost, mean that universities increasingly try to agree standard approaches. This, coupled with increasing numbers of students, means that the job of teaching can become more routinized, and more subject to scrutiny. Greater micromanagement clever people is rarely a recipe for organisational happiness.

Secondly, the reality that universities are not really single communities. They are complex organisations, closely regulated, which require management. The sense that academic staff can control their work, and that they are working within a system which is fair, is diminishing. Let’s look, for example, at tweets from one academic - @sstroschein2 - to understand a perspective on strike action (I’m going to paraphrase rather than quote directly):

• Incremental changes over 15 years which make the job increasingly unmanageable
• High turnover of staff
• More students, larger classes
• Increasingly active but inapt management of teaching 
• More automation
• Research ranking which harms organisational dynamics and adds no value
• More pressure to compete in research
• Casualisation of junior academic staff roles and exploitation, leading to morale problems

Without trying to get into the rights and wrongs of these concerns (although from my observations there is a lot of truth in there), it is clear that there isn’t a broadly shared vision within many universities of what the university is for and how it should be run in the world of mass, student-focused higher education. This contrasts with the apparent culture of collegiality, and leads to discontented staff. In the long run this can’t hold.

What’s to be done? At some point the industrial action will end, with some sorts of compromises. Who knows what and when.

In the longer run, there’s a need for universities to find a stable way to work, which provides for sustainable and fulfilling academic and professional service careers, and which recognises that students are the raison d’être for most universities. Maybe this is a single sector-wide question; maybe it’s a question which each university needs to answer in its own way. (It’s probably a bit of both!)

A precursor, though, will be good leadership, and that means listening not fighting. If we like the notion of the university as a single community, and if we recognise that the students in the main school matter, it would be best to start the sitting round the table now.

Key Performance Indicators

Look on the webpages of almost every university, tucked away sometimes in the ‘About Us’ pages, and you’ll find a section on KPIs – Key Performance Indicators. I thought it might be useful to write a bit about what they are, and why they matter. In this post I’ll also go into a bit of detail about one common KPI – staff costs as a percentage of income.

A performance indicator simply means a measure of how you’re doing. So, if I’m typing, words per minute might be a performance measure. But so might typos per sentence. Or proportion of screen-breaks properly taken. Performance indicators are quite easy to come up with (although, as a game, making up performance indicators does get pretty tedious after a while).

Now think about all the things that go on in a university (or any other organisation, for that matter), and that can be measured, and you’ll see that a full list of university performance indicators would be huge. And so Key Performance Indicators are those chosen for particular monitoring.

Chosen is an important point here. There’s no absolute list of what matters to an organisation: it is a judgment about strategy and circumstances. There are KPIs which are measured by university regulators (funding councils, research councils etc), and they do tend to get measured by universities, but it is a choice that universities make. Sometimes a pretty obvious choice, but a choice nonetheless.

The choice is made by governing bodies, on the advice of the VC and colleagues in the senior management team. And the choice tells you about what’s important to the University. If a university is trying to improve its student experience, it might have staff:student ratio as a KPI. Or proportion of space of the highest standard. Or NSS results. But if it has a financial focus in its strategy (for investment, or to ensure sustainability) it might choose income per student (or cost per student).

The other jargon term is metric. That’s the actual value associated with a Key Performance Indicator. So for my words-per-minute typing KPI, the metric at the moment is about twenty. And the typos-per-sentence is about two. Could do better! And that’s the point – there’s often a target (or a range) associated with a KPI and metric. I’d like to type with fewer errors and more words per minute. So using a KPI I can measure my progress.

So that’s the theory. Let’s take a common university KPI – proportion of income spent on staff – and look at that in more detail.

The definition is straightforward. Take a university’s total income and its total spend on staff, both of which are in the annual financial statement, and divide the latter by the former. So if my university’s income is £100m per year and staff costs are £55m per year, then the proportion of income spent on staff KPI has a value of 55/100, or 55%.

Here’s two charts which show the KPI. They’re both drawn from 2012-13 HESA data. The first is a scatter plot, where each university is represented by a single dot.

This shows that for most universities, staff costs are in the range of forty-something to sixty-something percent of income, with an average around fifty-something percent. It also shows there are some outliers – some very large institutions, with turnovers of over one billion pounds (and I do hope that the Vice-Chancellors report that to their governing bodies in the style of Dr Evil); and some smaller institutions with much smaller (3% and 14%) spend on staff. These latter are instructive: one is a small consortium institution, and doesn’t directly employ many staff at all; the other is a university with a huge geographical spread and lots of costs associated with teaching over this area. It shows why the choice of KPIs depends on the specific circumstances of the institution. This probably isn’t a very useful KPI for those particular institutions

Now let’s see a different chart, using the same data. This is a bar chart where the institutions are arranged from left to right in ascending order of turnover. That is, the bar furthest to the left is the institution with the smallest turnover, the bar furthest to the right is the institution with the largest turnover. The height of each bar shows the proportion of income spent on staff.

This is more like a range of mountains – a few really high peaks and a few deep valleys, but most are around the 45%-55% range. What’s interesting here, I think, is that there’s no obvious economy of scale – larger institutions don’t seem to have a significantly lower proportionate spend on staff. This is counterintuitive.

So why does it matter? Staff costs are unlike other costs for a university. Firstly, they are long term. Once you’ve employed someone then you need to keep paying them, month after month, and to stop paying them involves effort and more expense. Secondly, they increase on a regular basis. Pay increases incrementally for many, simply by the passage of time as you go up the pay scale; there are pay increases every year through negotiation with Trades Unions; and on-costs – pension contributions and national insurance contributions – go up not down, particularly at the moment. A pound spend on employing someone this year becomes more like £1.05 next year, and so on. To employ someone is to make a commitment. 

And if you’re managing an institution, you need to know about this. If you have to find money each year for a rising staff bill, then you have fewer opportunities for other things – equipment, buildings, training costs, IT, library books, student bursaries and scholarships. So an institution which can manage its staff costs has more opportunities. And when there’s a large increase – a hike in pension contributions, or a big pay award (they did used to happen!) then institutions with a large staff cost as a proportion of income get hit hardest.

There can’t be an absolute target, of course. Some subjects cost more to teach than others – for instance clinical subjects. Some subjects need a lot of equipment, which keeps the proportion of spend on staff low because lots of money is spent on kit. And institutions make choices about how they operate which make an impact – for instance, having small tutorial groups.

There’s no moral to this tale: if you have a high proportion of staff spend, and know why, and it fits with your strategy, maybe that’s fine. And too low a proportionate spend and maybe your institution isn’t doing things as well as it might – universities are people businesses. But the one number does help you understand quite a lot about an institution’s plans and how sustainable it is (that is, how resilient to shocks, or how much scope for investment it has). And if you’re accountable for the institution, or deciding who to give more resource to, those are good things to know.