[Goose]

One big difference is that at Stanford, "times" generally don't go bad. The University isn't tied directly into the short-term economy. When the return on the endowment goes down (due to a general economic downturn) they don't shed staff, because their staff is not coupled to "profitability" or even "productivity". While a position on the Stanford staff isn't "tenured", it is close. Their are some positions that are tied to grants, and these positions are at risk if grant money dries up. Those are really the only "layoffs" that happen, and Stanford does a pretty good job of shuffling people around to avoid those.

Kind of like the Civil Service, I guess. 

But hey, maybe the funding bureaucracy is beyond me, but it sure seems like if you replace some staff with contractors you don’t have to make decisions like cutting 11 sports.

Stanford does have "temps", who are called in to do particular tasks and let go when those tasks are complete (in theory). However, Stanford also has a union, which ensures that the temps are union and get paid like anyone else. Temps are only allowed a certain number of hours per quarter. It that number is exceeded they have to become a "regular" employee or be replaced by another temp.

My experience is that contractors are often more expensive (in terms of "out the door" dollars) than "permanent" employees. They have three advantages. 1) You can get some expertise that you only need occasionally from people who would never work full time for your company. 2) Contractors don't need to be "laid off" when you no longer need/can't afford them. No severance or vacation to pay. 3) Most importantly contractors are treated as a "direct cost" and therefore do not get overhead applied to their charges to the project. It makes them appear much cheaper, even though you are actually paying them a higher salary than an equivalent regular employee.

These overhead charges are an allocation and are therefore not "real". It isn't just employee benefits, it is lots of other things as well. An accounting trick to be sure, but a very important one :-). When functioning as a consultant, I love it, because I can charge more and my clients are still perfectly happy!

[Goose]

One big difference is that at Stanford, "times" generally don't go bad. The University isn't tied directly into the short-term economy. When the return on the endowment goes down (due to a general economic downturn) they don't shed staff, because their staff is not coupled to "profitability" or even "productivity". While a position on the Stanford staff isn't "tenured", it is close. Their are some positions that are tied to grants, and these positions are at risk if grant money dries up. Those are really the only "layoffs" that happen, and Stanford does a pretty good job of shuffling people around to avoid those.

Kind of like the Civil Service, I guess. 

But hey, maybe the funding bureaucracy is beyond me, but it sure seems like if you replace some staff with contractors you don’t have to make decisions like cutting 11 sports.

Stanford does have "temps", who are called in to do particular tasks and let go when those tasks are complete (in theory). However, Stanford also has a union, which ensures that the temps are union and get paid like anyone else. Temps are only allowed a certain number of hours per quarter. It that number is exceeded they have to become a "regular" employee or be replaced by another temp.

My experience is that contractors are often more expensive (in terms of "out the door" dollars) than "permanent" employees. They have three advantages. 1) You can get some expertise that you only need occasionally from people who would never work full time for your company. 2) Contractors don't need to be "laid off" when you no longer need/can't afford them. No severance or vacation to pay. 3) Most importantly contractors are treated as a "direct cost" and therefore do not get overhead applied to their charges to the project. It makes them appear much cheaper, even though you are actually paying them a higher salary than an equivalent regular employee.

These overhead charges are an allocation and are therefore not "real". It isn't just employee benefits, it is lots of other things as well. An accounting trick to be sure, but a very important one :-). When functioning as a consultant, I love it, because I can charge more and my clients are still perfectly happy!