Perhaps the more obvious financial benefit of tenure is to the faculty. Tenure decreases the vulnerability of this group of professionals. Unlike their private-sector counterparts, academicians are generally not offered the opportunity to invest in their own success. Most of their ideas and accomplishments are given to the public domain in the form of publications and other presentations. Funds not spent during the grant or contract period usually have to be returned to the sponsoring agency.
Tenure offers compensation to an otherwise financially insecure faculty.
Under the tenure system, the institution has leverage regarding negotiation of compensation for services rendered. There is no collective bargaining. Contracts are made between the individual and the institution, the terms of which are determined by the prevailing supply and demand. There is currently a 'glut' of Ph.D.'s in the job market. The over-supply of doctorates is not likely to change for the next several years.