Mount Holyoke Enjoying Good Financial Health

Mount Holyoke Enjoying Good Financial Health

Staff Salaries

Each year, MHC’s human resources department analyzes various survey sources to determine the College’s market competitiveness for staff positions; monitors the progression of staff salaries through the salary grades; and recommends salary adjustments to maintain equity within the Salary Administration Program.

In order to maintain the health and viability of a salary administration program, a periodic comprehensive review is important. Since it has been five years from the inception of the current salary administration program, the human resources department conducted a comprehensive analysis and market study of all positions in the Salary Administration Program over the course of this year. As a result of the review, the department found that a majority of job classifications were properly graded and employees were appropriately paid within those grade ranges. It was also found that some job classifications needed to shift to a new grade. With this shift, some employees are still correctly positioned and competitively paid, and others have been recommended for a salary adjustment.

Approximately 26 percent of positions in the Salary Administration Program are shifting a grade, and approximately 98 employees are receiving an equity increase effective July 1, 2001. Employees receiving a grade change and/or an equity adjustment to their salary this year will receive a special letter providing them with this information prior to July 1, 2001. Otherwise, staff will receive their updated 2001–2002 salary information, as well as their fiscal year 2000–2001 benefits information, in the annual compensation statements due out this fall. Since this was such a comprehensive project this year, human resources will also provide the community with an updated job listing and new grade chart in the fall.

The human resources department is committed to ensuring that staff salaries remain competitive, and that all employees are paid appropriately in the work they perform for the College. As always, the department looks forward to working for and with employees in the upcoming fiscal year.

The annual operating budget can be considered a snapshot of the financial health of the College. By that measure, MHC's vital signs are strong. The fiscal 2001–2002 budget approved this month by the board of trustees includes more competitive salaries, support for key initiatives, a reduced reliance on endowment funds, and an increase in reserves.

The $78-million budget moves the College closer to the ultimate goals set in The Plan for Mount Holyoke 2003, goals that, when met, will mean Mount Holyoke has achieved financial equilibrium and fully recovered from the financial troubles of the early 1990s. The 2001–2002 budget meets or exceeds all of the mileposts set for the coming year.

“I think this is a very good budget,” says Mary Jo Maydew, vice president for finance and administration. “We were able to make progress toward all of our goals, and we continue to outperform the Plan significantly in all areas.”

Financial equilibrium is defined in the Plan as: a balanced budget; appropriate funding of reserves; no use of unrestricted bequests for operations; and spending against endowment at a rate of no more than 5 percent of endowment value.
The College has met several of those goals and continues to make timely progress toward the remainder. The use of the endowment is decreasing, from the 5.4 percent level of the past year's budget to 5.2 percent, in line with the Plan. The eventual goal is to reduce spending to no more than 5 percent of the total value of the endowment, an amount considered financially prudent for the College's long-term health.

Net student revenues are budgeted to increase, by 18.7 percent, well above the 6.5 percent goal of the Plan. The amount of financial aid awarded as a percentage of tuition revenues is expected to decrease to 43.5 percent, below the Plan goal of 47.8 percent.

Salaries and benefits, which account for 70 percent of the operating budget, have been made more competitive for the coming year. Staff salaries will increase by 4 percent across the board, to keep the College competitive in the overall labor market. An additional amount, equal to three-quarters of a percent of the staff salary pool, has been set aside for equity adjustments.
Because five years have passed since the College carried out its salary equity study, a new look at equity is being taken this year, according to Lauren Turner, director of human resources. For example, she said, all administrative assistants —a quarter of the College's staff—have been moved up by one grade, to reflect a shift in the overall market. (For details of the salary review, see the sidebar on this page.)

Faculty salaries will rise as well, from a minimum of 4 percent to a maximum of 10 percent, as the College continues its efforts to raise salaries to the middle of the pack among peer colleges. Rising salaries offered by other institutions and lucrative employment opportunities outside academia have made it a challenge for the College to hit the midpoint, according to Maydew.
Although the pool from which faculty salaries are drawn is being increased by 8 percent, for the second consecutive year, that does not mean that all faculty members will receive raises of 8 percent, Turner explains. Higher-percentage salaries will go to those with lower salaries in a given rank, according to Donal O'Shea, dean of the faculty.

Benefits are being improved, as well. There are several changes being made in the pension benefit, most prominently an increase in the College's contribution from 10 percent to 10.5 percent. Because Social Security benefits are capped, employees at the upper end of the income scale receive a smaller percentage of their income at retirement than do their colleagues further down the income scale. The increase in the retirement contribution will address this gap between working income and retirement income for a significant number of employees.

At the same time, the amount employees are required to contribute to qualify for the 10.5-percent contribution is being decreased, from 5 percent of income over $16,500 to 5 percent of income over $25,000. This means that some employees will not be required to make any contribution to participate. The eligibility age is being lowered from twenty-six to twenty-one, as well.

Several prominent initiatives are provided for in the new budget: the Weissman Center for Leadership, and its Speaking, Arguing, and Writing Program; the Center for Environmental Literacy; the Take the Lead program, the redesign of the College's Web site; and the College's adoption of a new visual identity.

Although the most visible sign of change at the College is the construction projects-the Unified Science Center, the expansion of the Mount Holyoke College Art Museum, the recently completed Pratt Hall renovation, and the recently approved renovation and expansion of the Blanchard Campus Center- those projects actually have little impact on the annual budget, Maydew explains.

Gifts and money raised through bond issues cover most of the construction expenses for the projects, Maydew says, with the remainder coming from the budgeted reserves included in the 2001–2002 budget. Capital projects will consume approximately half of the nearly $4 million in budgeted reserves, or approximately 2 1/2 percent of the overall operating budget, Maydew explains.