A Strategy for Allocating Central Funds to Support New Faculty Recruitment

Abstract

Requests for central funding for recruiting new faculty in academic health centers (AHCs) typically exceed available resources. The administration's prioritization of the requests, therefore, involves implicit or explicit predictions of the value of the potential faculty member to the institution. Optimal management dictates that the value of the recruit be assessed both on the extent to which they contribute to the organization's mission and on their capacity to generate revenues. The first premise of this article is that faculty recruits can be considered as "projects," and their potential value to the organization can be estimated in this context. The second premise is that the best way to determine a project's financial worth is by determining the net present value of each potential faculty recruit. The author models the combination of these premises and demonstrates that the approach allows for the more systematic prioritization of resource allocation for faculty recruitment in AHCs.