IU turning to outsourcing to fix budget woes

Facing a cut in state appropriations of $4.7 million over the next two years, IU is examining outsourcing support services such as food service and maintenance as one possible way to cut its costs. \n"A key part of being efficient is to always consider a decision whether or not we provide a service or purchase a service," said Terry Clapacs, IU vice president and chief administrative officer at the April meeting of the board of trustees. \nThis means the University could cut non-academic staff positions in favor of hiring outside companies to do them at a lower rate.\nBut, IU is not swinging the ax just yet, said Guy DeStefano, whom Clapacs deemed the "outsourcing czar" at the meeting.\n"At this stage we are simply asking what are we doing, why are we doing it, who are our customers?" DeStefano said. \nHe said he and his staff are surveying all of IU's support organizations with the goal of determining what they do and whether they can be made more efficient. DeStefano said he would also examine whether the administration is structured efficiently in a way that allows the various offices to communicate effectively as possible. \nDeStefano, who is retiring at the end of this year from a 36-year-career in the purchasing department, said the job of reevaluating the efficiency of the University would take much longer than his one remaining year at IU.\nHe also said he is not out to get people's jobs.\n"I'm trying to make everybody comfortable," he said. "My role is not to sharpen my axe."\nIU-Bloomington Interim Chancellor Ken Gros Louis said it's reasonable to look at outsourcing jobs as a cost cutting measure.\n"But, having said that, we have to factor in what the impact is on the employees and the faculty, students and staff that takes advantage of whatever service we are outsourcing," he said. \nClapacs said it could frequently be cheaper for the University to outsource than do services in house because the University provides benefits and competitive pay which outsourcing companies do not. \n"Because of the kind of people we hire and the culture itself, our benefit program is a very expensive program," he said. "We have lots of paid time off; we have very good health care benefits; we have very good retirement benefits."\nClapacs pointed out that this is not the first time the University has looked to outsource service jobs. Roughly 20 percent of all non-academic services are currently outsourced. This includes major architecture and construction projects like the new Simon hall.\nIU employs 11,500 non-student support personnel, with more than 5,200 on the Bloomington campus alone. Many of these men and women are worried about their jobs said Dallas Murphy, president of the American Federation of State and County Municipal Employees, Local 832.\n"Right now they're very frustrated and very upset," he said. \nHe said the union considers Clapacs' proposal a "definite threat" to union employees who work staff IU.\nBut, IU Trustee Patrick Shoulders offered some comfort to these employees concerned about their jobs.\n"I hope that outsourcing does not become the primary tool because I think along the decimal points and dollars signs," he said, "you have to consider the affect that it has on people and the community"