The Salary Premium Required for Replacing Management Faculty: Evidence From a National Survey

Abstract

One of the most important aspects of growing and improving business education is replacing departed faculty members. As the baby-boom generation approaches retirement, the supply of available replacement faculty members is diminishing. The result is a competitive market for replacement faculty that features increasing starting salary levels. In particular, faculty lines that have been occupied for extended time periods need to be marked to market salary levels because annual salary increases rarely keep pace with inflation in the labor market. The authors report the results of a national survey to determine the amount of salary premium required to bring vacated management faculty lines back up to competitive market levels. As business schools struggle to replace retiring and departing faculty, budgets have to account for these premium increases to succeed in an increasingly competitive market for faculty labor.

Academic Administrator Leadership Styles and the Impact on Faculty Job Satisfaction

“…Seventy-seven percent of employees in the United States have reported dissatisfaction with their jobs (Mardanov, Heischmidt, & Henson, 2008), and as DeConinck (2009) reported, job dissatisfaction eventually leads to voluntary turnover. The estimated salary premium required to replace one dissatisfied faculty member totals $57,000 (Finch et al, 2010). Since the State University System of Florida launched the New Florida Initiative, increased enrollments created the need for faculty members to assume administrative positions with leadership responsibilities (Austin, 2012).…”

Academic Administrator Leadership Styles and the Impact on Faculty Job Satisfaction

“…Seventy-seven percent of employees in the United States have reported dissatisfaction with their jobs (Mardanov, Heischmidt, & Henson, 2008), and as DeConinck (2009) reported, job dissatisfaction eventually leads to voluntary turnover. The estimated salary premium required to replace one dissatisfied faculty member totals $57,000 (Finch et al, 2010). Since the State University System of Florida launched the New Florida Initiative, increased enrollments created the need for faculty members to assume administrative positions with leadership responsibilities (Austin, 2012).…”

“…Colleges and universities experience lack of trained leaders for a number of reasons. As members of the baby boomer population retire, which creates a smaller workforce population, colleges draw new faculty administration members from a smaller pool of qualified applicants (Campbell, Syed, & Morris, 2010;Finch, Allen, & Weeks, 2010). Apart from the fact that hiring and retaining talented college faculty administrators may be extremely costly, and time consuming (Green, Alejandro, & Brown, 2009), generational differences play one of the major roles in faculty members' continued dissatisfaction with leaders (Salahuddin, 2010).…”

Evidence of Faculty Salary Differences Across Business Disciplines and Employment Contracting Systems

“…The implication from Hearn (1999) that is relevant to this research is that Deans and department leaders in business schools do not have to focus on research to determine faulty salaries, but can adopt policies that are related more to teaching and service. Finch, Allen & Weeks (2010) use a similar argument when noting that the retirement of baby-boomers is reducing the supply of available replacement faculty and that the resulting changes in the market is increasing starting salary levels in business disciplines in general. Applying this reasoning along with the limited supply condition imposed by subject matter difficulty and high salary levels at the undergraduate and masters' level, faculty in the accounting and finance disciplines may earn significant salary premiums compared to other disciplines.…”