The Compass Group, a support service company out of North Carolina whose parent company is in the UK, has just sealed a deal worth $285 million dollars with Texas A&M. Texas A&M has handed off all dining, landscaping, maintenance and custodial services to the out of state company in efforts to save over $10 million a year in operating costs. Chancellor John Sharp, who spearheaded the proposal to outsource services, is proud of the methods taken to save money. “Today’s announcement means more money will be available to recruit, pay and retain faculty and researchers”.
A&M currently employs more than 1,600 workers who will no longer be part of the Aggie staff. Part of the deal requires that Compass Group rehire current staff for at least 2 years, so long as they go through a reapplication process and pass background checks. Employees will receive the same financial compensation and a 4% raise, to make up for a much less appealing benefits package. How many Compass employees will be working at the campus after everything is settled is unknown, but a more efficient system generally means fewer workers and probably less pay. Employment beyond the 2 year contractual agreement is anybody’s guess.
Walter Draper, assistant custodial supervisor brings up a good point and mirrors our first thought. “Texas A&M has one of the finest business schools in the country, and yet we can’t figure out how to in-house save money out of our department.” While job numbers and job quality is usually the main focus in outsourcing, local companies may be taking a huge hit. Vendors who currently supply the school with meats, bread and produce were not part of the negotiations and have not had any of their contracts renewed. Local vendors can re-apply through Compass for a contract, but it’s very likely that preferred vendors have already been acquired, some from out of state.
Overall, the outcome from the change will be a mixed bag. The school financials will improve, which is never a bad thing, but some local businesses and families will feel the crunch. If recruiting improves as the chancellor is hoping and the campus can increase the number of students, then the long run picture looks optimistic. Especially, since there are many new and remodeled buildings on campus that are sitting partially vacant, ready for the steadily increasing enrollments. It’s just a shame, with 7,000+ bright educated minds graduating every year, A&M couldn’t figure out how to make it run in house. I suppose it’s easier and cleaner to just hire a headsman than do the dirty work yourself.