The Top 5 Business Issues in Higher Ed

  1. Assisting and preserving the labor force
    The mission of higher education depends on people, and as a sector, it employs almost four million people in the United States. Approximately 60% of the yearly expenditures of institutions are allocated to employment.

Faculty and staff at colleges and universities meet a variety of institutional demands. Every day, teaching members, resident assistants, mental health counselors, and front-line service workers attend to the needs of students. New discoveries are made by researchers, and administrators strive to provide efficient and legal operations. Medical professionals such as doctors, nurses, and hospital staff attend to patients’ needs and provide medical students with training in these settings.

Without these experts, higher education cannot operate, however institutions are finding it difficult to keep all of their staff members on board. Four key concerns that have an impact on the current workforce challenges in higher education have been recognized by NACUBO members.

competitive perks and compensation. In focus groups, the poll, and association conferences, a number of NACUBO members mentioned difficulties in providing competitive remuneration to fulfill staffing needs. We find it difficult to be competitive, one person said. Because we sometimes struggle to find candidates for unfilled positions—we pay administrative assistants far less than they might at a fast-food restaurant—we have increased the demands we place on our employees.

The member’s response suggests that the issue of salary is not exclusive to top administration or professor jobs. Teachers in daycare centers, bus drivers, police officers, and custodians sometimes have unfilled positions that cannot be filled without paying more due to a lack of competitive wages. Other parts of the institution suffer when important services slow down as a result of vacancy. For instance, staff and teachers who are also parents of small children may take time off work or even resign from their positions when daycare centers cannot continue to operate; students, particularly commuters, may miss class when buses operate on shortened schedules; and so on.

higher attrition and a loss of talent. For operations and service quality to continue, colleges and universities require a steady workforce. However, organizations have experienced a rise in turnover and retention problems as a result of the labor market and the growing availability of remote work, which has led some employees to look for other alternatives. More than one-third of participants in a recent study of professionals in higher education said they planned to hunt for new job options within the following year. Costs appear to be associated with every move: either raise remuneration at a rate faster than income growth, or jeopardize the institution’s capacity to carry out its purpose.

Talent drain is a result of both this higher turnover and other national employment patterns. Colleges and universities depend on highly qualified employees, whether they are professors, financial advisors, or operational support staff with technical skills. As employees depart and it is harder to find new, qualified employees, institutions lose talent.

The loss of talent could make achieving institutional goals more challenging. As a NACUBO member put it, “There are fewer young people willing to assume the challenges of state employment due to the ever-increasingly competitive job market.”

Hybrid and telework policies. Most higher education staff members now have more freedom thanks to the shift to remote work; but, as things are getting back to normal, institutions are having to deal with issues related to equity, hiring, retention, and operational effects of maintaining remote and hybrid work alternatives. A NACUBO member expressed regret about their organization’s absence of a telework policy, saying, “We don’t have one and we are bleeding employees.” Individuals desire flexible scheduling. Due to state-mandated regulations governing state employees, public institutions in certain states have limited possibilities for remote work. This can further impact the institutions’ capacity to attract and retain employees.

Leaders at organizations that are not affected by restrictions on remote work are overcoming procedural and cultural obstacles associated with telework and hybrid work policies. “After the pandemic, employee groups put pressure on management to extend remote work rules indefinitely. This represents a paradigm shift for our institution, and we are unsure of the immediate and long-term effects on student service delivery, much alone the culture of our workplace, one member said.

Employee happiness and morale. Concerns concerning the effects of the epidemic and the ensuing shift to remote work on organizational culture and worker well-being were raised by a few NACUBO members. “The stress of having to be apart in order to comply with COVID protocols is significant,” one person said. We’re trying to resurrect the sense of community that we once had.

Furthermore, worries about the wellbeing and morale of higher education employees have intensified as a result of the COVID-19 pandemic and trends that followed in the country’s workforce. Members of NACUBO talked about how tough it can be to ask certain employees to take on more responsibility because of openings, since they are aware that this can lower wellbeing and deplete morale. A department spokesperson stated, “There is some animosity among departments regarding workloads due to the increased staff turnover.”

  1. Taking Care of Students’ Changing Needs
    Despite the diversity within the U.S. higher education sector, all institutions share the common goal of educating students. One of the main issues facing administrators at universities is having to keep an eye on how well students are being served and how to pay for that purpose. Enrolling more students and providing for their basic necessities so they can finish their qualifications were identified as the two key business issues related to satisfying the needs of students.

Admission. One NACUBO member stated that “a decrease in graduating high school seniors and people moving away from the rural parts of the country” were the main factors affecting their enrollment outlook when questioned. Estimates of recent high school grads support this worry.

The effects of these changes are felt more strongly in some geographical areas than in others. The aforementioned estimates pose a challenge to educational institutions that rely on tuition money for their operations and purpose fulfillment, particularly those that concentrate their recruitment efforts on traditional-aged students. Additionally, data indicates that while the number of low-income students attending postsecondary institutions is rising, college affordability is still a problem for both students and their families as well as for school administrators.

satisfying the basic needs of kids. Business officers mentioned that problems with tuition payment are not the sole needs of students. “The majority of students attending our college are from the most underserved populations in higher education,” said a NACUBO member. They struggle every day to provide for their basic needs, such food and housing, which puts a major barrier in the way of them achieving their academic objectives.

In order to thrive, some college-bound youngsters nowadays need greater assistance outside of the classroom. The provision of these services, which range from mental health counseling to helping students develop their professional and social networks to life after graduation preparation, ultimately supports our mission of graduating the next generation of informed citizens. In the absence of these services, students continue their studies and graduate at slower rates, which may result in their having to pay for their college education but not receiving the benefits of a degree. Institutions that wish to engage in important non-instructional services must regularly assess priorities and the money supporting them. For instance, although many colleges have not consistently guaranteed the financing models to generate increased support for student mental health services, college presidents routinely identify these services as a top priority.

  1. Offering An Up-to-Date, Secure Technology Infrastructure
    Business officers also list the effectiveness of the campus technological infrastructure as a major concern. The expense of acquiring and adopting new technology, as well as cybersecurity concerns, were ranked as NACUBO members’ top business objectives. These concerns have been made more pressing by the dynamic workforce difficulties and the changing needs of students.

online safety. Cybersecurity is a concern for both IT and non-IT professionals as more institutions suffer from data breaches. As one respondent put it, technology “continues to evolve and has the ability to shut down operations and erode confidence in the institution.” However, institutions must pay a high price for risk management, cybersecurity attack prevention, and response (e.g., cyber insurance, technology and data security people).

Costs are associated with new technology. Investment in new technology will be necessary as online and hybrid instruction models become more prevalent in order to provide students with high-quality educational experiences. Furthermore, in order to “reduce the risk of bad decisions,” to be in a “financial position to be equitable” while supporting programs aimed at student success, and to effectively and efficiently deploy limited resources, NACUBO members emphasized the significance of data-informed decision-making. The participants clarified that while they are just using “slivers of data” at the moment, utilizing analytics would require investments in new technology and staff members with data capabilities, many of whom are seeking employment at other establishments or outside of the higher education sector.

  1. Handling an Unpredictable Economic Environment
    Inflation, supply chain restrictions, rising interest rates (which can drive up the cost of debt-funded projects), and more onerous compliance requirements are all contributing to the growing costs faced by colleges and universities. One NACUBO member bemoaned, “Not to mention the costs associated with our facility construction projects, the cost of operating goods and services is increasing at alarming rates.”

NACUBO members are concerned about inflation because both the Consumer Price Index and the Higher Education Price Index are at their highest points in thirty years. This challenge has been referred to as a “hidden tax” on operations by one member, while another clarified that units have been forced “to do even more with less” due to a combination of revenue growth limitations (such as state restrictions on tuition and fee increases) and challenges with philanthropic donations.

Business executives are attempting to negotiate the current economic environment. One person mentioned, “leveraging being in a farming community and are sourcing many food items locally—preparing it for freezing to use all year,” in response to a question about the high cost of food. Others felt constrained; one pointed out that growing expenses also affect families, and they understood how difficult it would be to keep raising tuition and fees to offset growing institutional expenses. “We are talking about which services we currently offer can be discontinued in order to cut costs, but this is a very difficult conversation,” said another.

  1. Handling Resource Limitations
    The resources available to the diversified higher education sector differ greatly. Depending on their funding models and the student populations they serve, community colleges, historically black colleges and universities (HBCUs), minority serving institutions (MSIs), private liberal arts institutions, career or technical colleges, regional public institutions, and research universities may have different resource concerns and constraints. The types of institutions most impacted by financial inequities are typically attended by students from historically underrepresented populations.

While interim support for higher education was provided by stimulus funds given to institutions to help them deal with the COVID-19 pandemic, many public universities are facing unprecedented state financial limitations. The great majority of higher education institutions that rely on tuition must constantly pass cost increases on to taxpayers in the absence of other sources of funding, yet doing so runs the danger of driving away students and their families. During the COVID-19 epidemic, institutions that offered student housing and eating services, athletics, academic medical facilities, and other amenities suffered significant losses that were not necessarily made up for by federal and state funding. Although private money for higher education is frequently mentioned as an alternative source of income, some schools profit disproportionately from it more than others.

Research money is frequently constrained and may incur additional costs for the institutions involved, as it is concentrated within a limited number of establishments. The “easiest” source of unlimited revenue to support the purpose is student tuition and fees, but doing so comes at the expense of affordability and may be in opposition to the institutional mission, which puts administrators of the institution in a difficult position.

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