Top Strategies for Managing Labor and Costs in Higher Education

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As your university anticipates the 2025-2026 school year, budgeting for personnel might be a hot topic. After all, while many constituents might imagine the budgets of higher education institutions are typically allocated to picturesque campuses, state-of-the-art facilities and exciting student experiences, the reality is that these benefits could only be provided by personnel.

Accordingly, attracting and retaining top-tier talent is likely to be a significant portion of some universities’ budgets. Effective labor management and cost containment strategies could be one antidote to help sustain academic excellence, support faculty, and staff, and contribute to long-term financial viability.  

Here are some strategies to consider as you manage human resources in higher education and aim to balance personnel and financial realities.

1. Increase automation and efficiency

Higher education institutions might be able to enhance operational efficiency and employee satisfaction by adopting technology solutions that automate manual tasks and mitigate mistakes. Consider strategically investing in technologies and automation tools that facilitate administrative tasks, minimize manual labor, and reduce errors.

For example, robotic process automation (RPA) for data entry and management; chatbots that support applicants, students, and families; and integrated student information systems might be options that could alleviate tedious tasks and offer a more cohesive approach to workforce management across departments.

Investing in resources that help manage workloads might allow faculty and staff to focus on more high-impact activities like teaching, research, and student engagement.

2. Upgrade institutional technology platforms to attract and retain tech-savvy talent

By modernizing technology infrastructure with cloud-based systems, mobile-friendly interfaces, and automated processes, higher education institutions might be able to better appeal to the next generation of workers. These younger faculty and staff might be more inclined to expect seamless digital experiences and be looking for an institution committed to innovation.

Options to consider could include cloud-based enterprise resource planning systems that help manage day-to-day business operations in areas such as finance and human resources, mobile-friendly student information portals, digital payment processing for tuition and fees, automated accounts payable/receivable systems, and collaborative learning management platforms.

3. Mentor younger generation employees to help them quickly build skills

Gen Z employees might be particularly hungry for learning and development opportunities as they embark on their careers. Targeted mentorship could take many forms, such as providing structured training and development pathways or offering cross-functional collaboration opportunities.

By pairing junior staff with experienced faculty or administrators, universities may be able to accelerate knowledge transfer and encourage career advancement. In addition, it has the potential to bridge generational gaps in today’s diverse workforce.

4. Manage the hiring processes

Attracting top talent could be appealing, so higher education institutions could consider centralizing recruitment and automating applicant tracking to facilitate the candidate experience while reducing the time to hire. Some of these functions could include standardizing job postings across departments and utilizing chatbots for initial screenings.

University candidate review processes might be lengthy since they typically use committee-based hiring to help gather diverse perspectives, involving members such as department representatives, faculty peers, HR executives, and even students. To help save time, universities could consider using collaborative tools such as faculty information systems, standardized evaluation rubrics, and collaborative document review tools.

5. Implement position control and vacancy reviews

By assessing staffing needs and managing vacancies effectively, universities might identify ways to staff more efficiently. Position control refers to a systematic approach that allows colleges and universities to assess their staffing needs more accurately, to weigh whether each role is necessary and aligned with the institution's strategic priorities.

The goal of this process is to reclaim budgeted staffing dollars when positions are unfilled and reallocate them to areas with greater needs. For example, it could indicate that investments in automation have boosted efficiency in your finance department; therefore, instead of filling a vacancy there, you could address a gap in another department, such as student services.

Additionally, implementing regular vacancy reviews might help institutions maintain sustainable staffing levels over time. By assessing vacancies against criteria such as enrollment trends and departmental needs, institutions might be able to avoid hiring freezes or layoffs while still effectively managing labor costs.

6. Leverage workforce analytics

Utilizing workforce analytics could help drive informed decision-making and optimize HR operations. Key metrics to track might include faculty and staff turnover, time-to-hire, training engagement, and diversity metrics. Keeping a close watch on these indicators could help higher education HR leaders identify trends and areas for improvement.

In addition to internal metrics, institutions could benefit from benchmarking their workforce analytics against peer institutions. This comparative analysis might provide valuable context for understanding how an institution's workforce performs against similar organizations. This type of benchmarking could be used to inform various strategies, including recruitment and retention, faculty and staff development, and staff utilization.

The Takeaway

Higher education institutions face labor and cost management challenges, which might be exacerbated by shrinking budgets, evolving student needs, and intensifying competition. Effective labor and cost strategies could be considered as a potential contributor to sustaining academic excellence and ensuring financial stability. Institutions that consider proactive approaches might find it helps them optimize resources, organize operations, and create a supportive environment for faculty and staff.

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