In an effort to reduce costs by $5 to $6 million, The University of Michigan is cutting staff and centralizing its human resources and financial services, according to the Associated Press.
The university aims to streamline certain functions by offering them in one place - a Shared Services Center.
According to vice provost for Academic and Budgetary Affair, Alfred Franzblau, the savings will be achieved by combining the more than four million finance and human resource transactions conducted each year in units across the campus into a single facility.
"Long-term savings will come through a reduction over time in the total number of people necessary to conduct the work, in gains from technology and standardized processes at the Shared Services Center, and in re-engineered work processes in the units," he said.
The Shared Services Center, slated to open in April, will include 275 employees doing the work of the roughly 325 people who currently tackle human resource and financial service functions throughout the school.
"We expect retirements and attrition to narrow the gap between Service Center jobs available and the number of candidates in the pool for those jobs," Associate Vice President for Human Resources Laurita Thomas said in a press release.
The center is expected to be at full capacity in October 2014. The human resource and financial staff employees affected aren't guaranteed a job, but will be considered for employment in the new center.
The Ann Arbor News reported that in an email to their employees, university officials said they "will be invited to become candidates for employment" at the new center.
Employees who are not selected for the shared services center will most likely be laid off.
"There aren't enough positions [for everyone]. We're seeing a reduction in staff," University of Michigan spokesman Rick Fitzgerald told the Ann Arbor News. "Will some people be laid off? Or a reduction in force? We'll have to go through that process ... we just don't know yet."
The shared services center has been years in the making, the Ann Arbor News reported. University of Michigan officials have been brainstorming ideas for at least three years.
The school recently tested a share services center in its Flemming Administration Building. They had all of the administrative units there use the same human resource and finance staff.
Positions that will be affected by the shared services center include those handling billing, financial accounts for units, expense reimbursement, data administration and employee time tracking.
