Putting a price on convenience

Putting a price on convenience

by Jessica Savage

Outsourcing has become a fast growing trend for private colleges, allowing big-name companies to handle small business on campuses and take strain off administrators.

Today the bookstore, the dining services and the physical plant at Simpson College are under contract to large companies instead of being run by the college itself.

According to Ken Birkenholtz, vice president for business and finance, it costs the college $1.4 million to maintain the facilities on campus and $1 million to run the food service. Both of these figures include providing products like food and paying full-time staffs.

Simpson students pay these costs through their tuition fees.

“We are highly tuition and fee dependent,” said Birkenholtz.

Birkenholtz explained that several factors have influenced Simpson’s decision to contract out these services.

“In general, you can find a high level of expertise in certain fields,” said Birkenholtz. “[The companies] typically have people training at all times.”

According to Birkenholtz, it is easier for a big company to find people to fill positions, rather than have the college go through a “hit and miss process of trying to hire our own managers.”

“So much comes down to the manager. The manager must be a good fit,” Birkenholtz said.

Although Simpson has contracted out these services, the college is still a part of the process of hiring new workers. Simpson is allowed to be in the interview process.”

“Management must be good no matter if you outsource or not,” said Birkenholtz.

The bookstore has recently been changed from a Simpson-run facility to a contracted business. Three years ago the bookstore was outsourced to Follett.

Birkenholtz said that the bookstore had been running fine but that he was concerned with changes in study materials and books because of computers. He felt it would be more beneficial to have a company take care of ordering and supplying the books.

Although those benefits might be enough to persuade colleges to outsource, it is not enough for all. Luther College, in Decorah, and Wartburg College, in Waverly, do not contract out any services on their campus.

“I guess we’ve just had a positive experience with all of our services. We have had long-term employees and are pleased with management,” said Jane Juchems, human resource director for Wartburg College.

“It’s important to have regional leaders take control of the business,” Birkenholtz said.

Cornell College in Mount Vernon outsources its bookstore to College Bookstores of America, as does Central College in Pella.

According to Tom Church, controller at Cornell, the manager of the college-run bookstore was retiring and the college felt it would be too hard to find a new manager on its own. They decided it was a better option to outsource their facility.

Cornell also outsources its custodial service, security and food service.

The custodial service is outsourced to FPG regional company. Church said the college feels that they are saving money using this route and that it helps make a team approach to cleaning. They are also pleased with the expertise of the company because of their products and services.

Cornell’s security is contracted to Performar. The company is able to do a more thorough background check on each potential employee.

“If we hire our own employees, we’re subject to training,” said Church, “It’s easier to call and say we need extra people [to watch over larger events on campus].”

Cornell food service is run by Sodexho Dining Services. According to Church, the administration does not feel like they are experts in the food service industry. Sodexho helps out with any problems and all the employees come trained.

Simpson contracts its dining services as well as its maintenance to Sodexho. Birkenholtz said that these companies are “responsive to our needs and concerns and are very helpful.”

Coe College in Cedar Rapids contracts out their dining hall, bookstore and security. Sodexho runs their dining hall, Follett runs their bookstore and St. Luke’s runs their security.

The college has outsourced these services because “it’s easier and it’s more cost effective,” said Tammy Edwards, assistant vice president of student affairs.

Birkenholtz said that it would be too difficult to specifically see if Simpson was saving money by outsourcing. He felt that the companies could provide the “opportunity to have training programs for employees,” which is beneficial to the college.

Simpson’s positive experience with outsourcing does not mean the college cannot cancel the services if a problem arises. According to Birkenholtz, the college typically contracts services for five years and the contract includes the provision that the college can cancel the services in 90 days without cause.

Birkenholtz said they are happy with the services right now and are not looking to contract out any other services in the near future.