COVID-19 has been an inflection point for institutions of higher learning in the United States. Midway through the 2020 semester, campuses shut down, refunded students’ room and board, and made unbudgeted investments in transitioning to virtual environments.
For the 2021 academic year, most institutions are expecting declines in room and board payments, student enrollment, endowment returns, and alumni and donor giving. Public institutions are expecting lower state appropriation funding than they received in 2020. Alongside these projected revenue shortfalls, investments in social decisions need to continue to provide both distance and on-campus education in the fall of 2021.
One of the ways institutions are responding to these financial challenges is to rethink their staffing models and reduce faculty and staff costs. Some are implementing hiring and travel freezes, deferred retirement contributions, salary reductions, furloughs, and freezing of annual merit increases. Some have gone further to eliminate staff positions and terminate faculty contract renewals, or change them to one-year contracts.
In this paper, Milliman’s Radhika Philip explains that workforce transitions need to be conducted with sensitivity and doing so can ultimately strengthen the institution’s reputation with its diverse stakeholders.