Because science and engineering faculty incur costs continuously, some researchers have suggested that the aggregate costs required by new faculty (and not merely the initial start-up costs) should be considered in analyzing the cost of faculty turnover. Joiner110 has suggested an economic model for calculating the cost of turnover based on net present value (NPV). This model is commonly used in business to project the value of projects. It views faculty as long-term investments by considering all positive and negative cash flows for faculty members over time. Applying the model to faculty costs allows projections of the yearly costs of faculty salary, fringe and personal benefits, supplies and equipment, facility renovation, and other factors that are typically part of the costs accrued by universities in support of faculty (either new or existing). At the same time, the positive cash flows provided by a faculty member to the university (grant support, clinical revenues, and so on) are estimated. In concert, those two parts of the NPV model yield an estimate of the net cost (or financial yield) of a faculty member to a university.111

Using the NPV model, one could estimate the length of time a faculty member must remain at an institution for the institution to see a financial return on its investment. From a strictly economic perspective, if a faculty member leaves an institution prematurely (before the NPV model shows a positive yield), the institution loses money. In essence the NPV model dictates that “a dollar today is worth more than a dollar tomorrow.”112 Existing faculty are likely to have a positive NPV, whereas new faculty are likely to show a negative net cost. Accordingly, this model suggests that it is in the best financial interest of the university to direct efforts at retaining faculty. Some effective retention practices are outlined in Box 3-7.

CASE STUDY: CHEMISTRY113

To examine the issue of faculty recruitment in more detail, the committee focused on chemistry, a field with a relatively high proportion of women PhDs. Information on the age, sex, and training of chemistry faculty members was obtained from the American Chemical Society’s 2001 DGR. The study was limited to faculties in the departments of chemistry, chemistry and biochemistry, or chemical biology at 86 Research I institutions. Only

110

KA Joiner (2005). A strategy for allocating central funds to support new faculty recruitment. Academic Medicine 80(3):218-224.

111

Joiner (2005), ibid.

112

Joiner (2005), ibid.

113

This section is based on research commissioned by the committee from Valerie J Kuck, Visiting Professor, Seton Hall University (Retired, Bell Labs).



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