Providing One-Time Payment to Faculty and Professional Staff Amid Challenging Times in Higher Education

We know that the last few years have been particularly difficult as you’ve worked harder while being asked to restrict spending, travel and hiring to only the most essential needs. The sacrifices you have made and continue to make throughout the pandemic and all the ensuing economic volatility have been instrumental in keeping Drexel on firm financial footing. However, we still have much work to do toward achieving balanced budgets from unrestricted operations versus all funds, as expenses continue to climb rapidly and at a higher rate than revenue is growing. Making the necessary structural changes in order to achieve long-term financial stability will take time. Over the next few years, we must make difficult decisions and take necessary steps to enable the University to grow its revenues and reduce its expenses.

As is the case with all universities, salary and benefits make up the largest portion of Drexel’s operating budget; offering merit raises this year would add significantly to ongoing expenses. However, there remains a strong desire from us to recognize your hard work and dedication to Drexel, so in lieu of merit, we are awarding a one-time payment to faculty and professional staff equal to 1% of your salary in January 2024.

This payment will be issued to faculty and professional staff who were employed by Drexel before July 2023 and did not receive a salary increase since that time. To be eligible for the payment, all compliance and performance development requirements must have been completed on time. The payment will be included in your January pay.

During a previous Faculty Senate meeting, we discussed additional considerations to address budgetary challenges. At this time, we have decided not to make any changes to the employee 403(b) retirement program, although changes are still being considered as a potential future measure, if necessary. We are in the process of developing a Voluntary Retirement Incentive Program, which must then be approved by the Board of Trustees for potential implementation in fiscal year 2025. Additional communications about a potential program will be forthcoming.

Update on Road to Financial Stability and Margin Improvement

As reported in the Welcome Back message, the University ended fiscal year 2023 with a positive operating margin. However, it’s important to note that the strong finish for FY23 was largely due to hard-earned, one-time revenue enhancements, which we cannot rely upon for FY24 and beyond. At the September 27 meeting of the Board of Trustees, the University presented and the Board approved an operating budget which highlighted the short- to medium-term challenges for Drexel and outlined revenue-enhancement and cost-reduction strategies.

As you know, these financial challenges are not unique to Drexel; they are being felt throughout the higher education sector. We need to adapt and innovate – just as Drexel has always done – to meet the changing needs of today’s students and remain competitive among our peers, with our Drexel 2030 Strategic Plan providing the roadmap. All the work that you are doing to implement our strategic initiatives is helping to position Drexel for the future.

We want to thank those who are participating in the cost-reduction and revenue-enhancement projects being undertaken in partnership with Huron Consulting Group. Some of the focus areas are nearing the implementation stage, while others are still finalizing data gathering and analysis. The latest updates on these projects have been posted on the Program Management and Organizational Effectiveness website.

We also want to thank those who have volunteered to serve on the feasibility teams assessing the recommendations of the University Advisory Committee on Academic Structure; a message about the teams and the commencement of their work will be coming from the Office of the Provost in the next week.

And finally, the successful integration of Drexel and Salus depends upon collaboration among multi-disciplinary teams from both institutions over the coming months to realize the potential of this merger, which will strengthen Drexel’s place as a leader in preparing future health sciences practitioners.

We are confident Drexel will address these challenges with determination, fresh thinking and collaboration. Thank you for your continued commitment to our University during these challenging times, and your determination to position Drexel for continued success in the years to come.

Sincerely,

John Fry
President

Helen Y. Bowman
Executive Vice President, Treasurer and Chief Operating Officer

Paul E. Jensen
Executive Vice President
Nina Henderson Provost