Each spring, EAB shares with partner institutions the company’s latest research on the most urgent threats and opportunities across the higher education marketplace. EAB’s Larisa Hussak and Brian Schueler share key takeaways from that research.
Topics include strategies for attracting and retaining talent amidst the great resignation, tips on how to compete in the growing (but hyper-competitive) graduate degree market, and how to handle one of higher ed’s greatest competitive threats: the growing legions of high school graduates who decide they don’t want or need to attend college.
Institutions really need to learn how to sell higher education and not just their own institution to this growing population of non-consumers.
- Larisa Hussak
0:00:10.1 Brian Schueler: Hello, and welcome to Office Hours with EAB. Today's episode provides a glimpse into EAB's latest research on the most urgent threats and opportunities in the higher ed marketplace. Our guests highlight five trends in particular that are forcing institutions to rethink their current approach and forcing them to adapt pretty quickly in order to survive and thrive over the next several years. Give these folks a listen and enjoy.
0:00:43.1 BS: Hello and welcome to Office Hours with EAB. My name is Brian Schueler, and I'm an Associate Director in EAB's Research Division. With me today is my colleague Larisa Hussak who joins the podcast and help me give you a recap of EAB's latest state of the sector research. Larisa, would you mind telling us what you do at EAB and maybe give our listeners some context around the state of the sector, check-in that we hold each year with our partner institutions?
0:01:08.7 Larisa Hussak: Absolutely. Hi, Brian, it's great to be here. My name is, as Brian mentioned, is Larisa Hussak, and I'm a senior director in our research department, and I have the pleasure of working with our two-year and four-year college and university partners on everything from student success to enrollment to institutional planning. And this year, I had the distinct pleasure of heading up our state of the sector research team. And our annual state of the sector exercise that we go through with partners really has two primary goals. The first is to provide a comprehensive review of the most influential market trends that's shaping the higher ed landscape, really give our partners a sense of what's going on and in and around higher ed.
0:01:51.3 LH: The second goal is to then identify the handful of strategic investments or decisions that college and university leaders need to make in order to keep up with that shifting market. And so this year, we recently held a webinar, premiering our state of the sector research that had great attendance and allowed us to not only share some of our early research findings, but also have a really fruitful discussion with a panel of industry experts. And so, for our state of the sector, this year, we've focused on five key terrains, where our team observed new competitive dynamics that are forcing institutions to rethink their value proposition in a fairly turbulent market.
0:02:35.8 BS: Alright, well, that's great to hear. And I'm excited to dig in a little more, what would you like to talk about first, Larisa?
0:02:42.6 LH: Well, let's start with I think the issue that far in a way has been the area of greatest urgency for our partners across the past year and really across different segments and regions within higher education, and that's the talent shortage. And I think it's really no wonder that it's top of mind given how widespread and stark the impacts have been. And so, when my team started digging into just some of the data here, what we saw was that during the first year of the pandemic, higher ed lost roughly 11% of its workforce, which is much more than other industries, like K12 or hospitals or information services lost. And while there has been substantial recovery over the past year, we've still yet to reach those pre-pandemic levels of staffing.
0:03:33.1 LH: And so, I think a lot of institutions are still feeling the effects of that shortage. At the same time though, the nationalization of the workforce that has occurred as a result of the widespread availability of remote work means that higher ed institutions are no longer just competing with other colleges and universities in their region, but they're competing with other institutions and even other industries all over the country. And so, the need to recoup these pandemic losses in an ever-tightening and competitive labor market is really putting a lot of pressure on institutional HR offices, which really weren't built for that sort of environment.
0:04:17.6 BS: Not sort of the high competitive situation that we're facing at the moment. I'd love to get a sense, how much of that do you think is money? Is it mainly just institutions now having to compete with the private sector on salaries and if they can't, is there still a way that jobs in academia can have enough non-monetary benefits to attract top talent and really be competitive in that sphere?
0:04:44.9 LH: Yeah, that's a really great question. And the short answer is that higher ed likely can't compete directly with the private sector on salary, but it can really compete and even lead the way, I would say on some of the non-compensation benefits, like work-life balance, like insurance packages and educational benefits, which we've seen workers today are valuing more than ever. And of course, there's the mission aspect as well, which for many individuals who pursue a career in higher education is a primary draw. So, it's not that higher education was without appeal. I think the real challenge here is in leveraging that appeal and making the case to a more skeptical market. Most colleges and universities don't have the strategic HR capabilities that a lot of private sector companies do, and so, really need to catch up there in terms of establishing and selling an employee-facing brand in order to attract talent.
0:05:47.9 BS: Could you tell me a little more about establishing and selling that brand. What are some innovative ways that we're seeing institutions attracting and retaining their talent?
0:05:57.9 LH: Absolutely. Well, I think, again, when we think about the advantages that a career at higher ed has, it's really leaning into those non-compensation benefits. And so, I think recently we've heard in the headlines sort of splashy strategies, like certain colleges and universities establishing a four-day work week. We also heard from other institutions who have created calculators to help quantify the non-compensation benefits that they provide for their employees, so that prospective employees can actually see the quantification of some of the value of their employment within a college or a university.
0:06:38.3 LH: I really understand the benefits of that employment, and I think going forward, one of the key pieces of attracting talent is the opportunity for remote and flexible work options, and I know that's something our partners and a lot of college and university leaders are grappling with right now, and trying to shore up their remote work policy. We've seen a lot of institutions really start to take a hard look at their historical workplace policies. And that's actually something that we at EAB have been working with our partners on through our remote work policy audit to try to identify opportunities to leverage that flexibility and leverage industry best practices there in order to attract talent and really take advantage of the nationalization that we're seeing in the workforce and some of the draw that that's creating for employees.
0:07:34.5 BS: So really taking some of these things that I think we just had to do during the pandemic, and now saying there's value here, there's tangible ways that we can use this to say, this is an attractive job and compete for some of that talent.
0:07:49.7 LH: Absolutely.
0:07:50.8 BS: That's cool. You mentioned a little bit too like this is really straining HR departments and really putting a lot of pressure on them. But I can imagine that it's not just those HR departments that are facing a lot of pressures from this talent shortage. Can you tell me a little bit about how this is affecting other parts of the campus, especially student-facing and that experience, and how are institutions that we're chatting with. How should they be working and focused on maintaining that high quality student experience, given a lot of these pressures?
0:08:25.8 LH: Sure, absolutely. So I think as you alluded to, student-facing office as student-facing positions in particular have been very hard hit by some of the staffing shortages that we're seeing across the sector. In one area that we explored in our state of the sector research was the counseling center. And according to a recent survey from the association for university and college counseling center directors at 70% of counseling centers with open physicians have had difficulty recruiting staff, and 61% have experienced turnover in the past year. And these are huge numbers, and they're having a demonstrative impact, not only on the ability of those counseling centers to meet the ongoing student needs but on student experience itself. There's been great research on clinical load, which you can think of is roughly analogous to advising ratios. And it's found that institutions with higher clinical loads, fewer staff members are able to provide services to students. Those institutions and the students at those institutions, so less improvement and issues like depression, anxiety and general distress. And so when we think about the growing mental health crisis and the growing need for institutions to provide mental health and well-being support, that's directly tied to their ability to attract and retain college counselors and other student-facing staff there.
0:09:56.9 LH: And so when we think about what institutions should do in order to meet sort of these intertwined challenges, I think there's a strong imperative here to elevate these issues both of talent and staffing, as well as student mental health and well-being. Elevate them up to the level of cabinet and the level of centralized institutional strategy. I think historically, talent recruitment and retention, student well-being, those are issues that were really decentralized in an institutional delegated down to either department heads or student affairs leaders. But I think we're seeing now as the magnitude of these challenges arose and as the implications and the consequences of some of these issues really start to manifest across campus. What is needed right now is a centralized strategy, is that centralized investment, and really the power that folks at the center have to sustain investments to seeing progress and really embedding accountability into the institution. And so we're starting to see institutions elevate some of these issues of, staffing of student well-being to the cabinet level, to the cabinet agenda and start to attack these as centralized institutional strategic challenges rather than individual office power department challenges.
0:11:30.0 BS: Gotcha, so essentially, this has become an issue that's getting that central value that the institution is providing, and so it really needs to get... All the leadership needs to be tackling and really thinking about how to address some of these... How the talent is affecting mental health services and because that's affecting everyone else.
0:11:51.0 LH: Absolutely, and speaking of issues that have, I think risen to the level of executive and cabinet strategy and importance, right? I wanna turn and chat with you a little bit about some of the research that you've been doing on enrolment in the undergraduate space, and in particular, I would love to talk with you about a trend that we profiled on our state of the sector research, and that's the growing non-consumption market. And in plain terms, what we're talking about are the millions of high school graduates who have chosen to not attend the college at all. And there are a lot of reasons that an individual may opt out of attending colleges, but presents a major challenge for enrollment offices and institutions. And so why should institutions really be focusing on this non-consumption market and what are we seeing now that it's really increased urgency here?
0:12:51.2 BS: Yeah, I think that's, this is definitely an exciting area of research that I've been working on now. Now the consumers aren't new, for basically since I read has been in existence, there's been people who haven't got... What has changed, and what we're seeing now is that this is a population that is now growing, despite the situation where we're seeing actually the total population of students starting to decline and anticipating declines over the next decade, and so...
0:13:21.8 BS: As institutions are looking around and saying, "Where can we bolster our enrollments?" We know that there's all these pressures on enrollment, generally, we think that this is a population that deserves a more critical second look over the next few years, and even the next decade. From 2010-2020, when we looked at this non-consumer population, we saw that the population of it was actually growing. It grew by about 11%. And this is because although high school graduation rates have continued to rise, we've actually seen the college going rate start to decline, really in what is sort of a... We've had this trend for the last 80 years of increasing college attainment. And we're seeing that start to turn around. So that's obviously something where it's like, there's this population that's getting larger. We need more students. Let's take a look here. Obviously, that's easy to say sort of in theory. I think the other reason colleges should be taking a second look here is because we think this population is actually closer to higher education. And the barriers, the reasons that these students aren't attending college are actually more addressable by a higher education institution than I think many might think.
0:14:38.9 BS: When we looked at these non-consumers in this increasing population, we were seeing that, broadly, they're pretty similar to students who are enrolled in college, but they're not established in careers or life, many of them have not gone out, they're still living with parents or grandparents, a large proportion haven't even started working yet. And so, in a lot of places, they're very similar, waiting to start getting started. From household income, as well as racial diversity, there's some differences, but it's not dramatic. And I think many of our partners probably, when they think about this population of students who don't go to college, are probably, in their heads, over-estimating the difference between the students they currently serve and this population. So for one, it's a big market, it's one that's growing, and I think, given the pressures facing higher ed, it's one that increasingly deserves to be looked at like other growth markets, like adult... Serving adults who are 25 and over, serving graduate students. If you're going there, if you're looking there to try and address declining undergraduate populations, you need to be taking a second... Another look at non-consumers as well.
0:15:53.8 LH: So I wanna circle back to something that you said, which was that this population of non-consumers, particularly over the last decade, is growing. And it reminds me a little bit of the fact that it feels like every few years, there's some headline that comes out, some story, that question, "Is college worth it anymore?" But when we continue to look at the research and the data, we see that there is a quantitative and qualitative benefit to higher education, both in terms of wealth and earning potentials, but also in terms of long-term health and happiness. So why do you think that this population of folks who are graduating high school and not going to... Into higher education is growing? Why is college becoming such a tough sell? And how should individual institutions ensure that they are effectively communicating the value of higher education and of attending their particular institution?
0:16:54.9 BS: Yeah. It's a great question, and I think one that sort of lends itself to thinking about how do we address that, how do we approach it? First off, I think the alternatives to college are more attractive than ever for many students. College is still, for the vast majority of people, the best bet. And we think it's the best option in most cases. But when students are coming out of high school, they're facing a lot of choices. They could go and work in an entry-level job, they could go and do non-degree training, something like a certificate from Grow With Google. And many of these students probably also face other choices. They might have obligations in their homes where they need to be helping out with caring for parents or caring for dependents. You could also go into the military. So they have a lot of choices that they're weighing. And one thing that we're thinking is, as we're looking at students going through the process, these other options are working hard to capture their attention, to get them in quickly, to get them into that pipeline fast.
0:17:56.6 BS: At the same time, the higher ed is sort of putting barriers in the way to making that transition into college. It's a pretty... There's a lot of steps on the way to going into college. All of the application, all the processes there. And every single additional roadblock that either comes up or that students aren't getting expedited around, leads them to think, "Well, let's look at these other options. Let's take another chance and think about these other things I could do," or simply say, "I'm super frustrated. Is my college experience going to reflect what my application experience has been?" So I think that a combination of there are more options now for a fair number of students. Plus, this process being difficult means that it's a harder sale in the current situation to make for a lot of students.
0:18:52.5 BS: One thing that we've seen specifically with this non-consumer population is that a lot of them come from summer melt. And this is a specific situation, I think, where we definitely see this trend, where many institutions are not finishing that sale and saying, "Hey, college is worth it, college has a lot of value. Here's what we can give to you." Our partners and folks that we're talking with across industry, they do a lot of work across higher ed, do a lot of work up to deposit day. We're coming, and helping these students get through putting in their deposits, working with their applications. You also have high school counselors who are helping students through that process. What happens in the summer though is, high schools close, so their high school counselor, those offices close. They may lose access to that. Admissions might scale back after deposit day and say, "Hey, we got the deposit, let's pop the champagne and let's start thinking about next year."
0:19:51.9 BS: At the same time, student affairs, academic affairs offices that might be more focused on retention and working with keeping these students engaged, probably look at their efforts really starting at either the day in, the welcome in day during the summer or late in summer or right into the fall, but really starting their efforts in the fall, and so you've this gap in the summer where the assistance and the help scales back just at the time when students are having a lot of critical questions. So, that's definitely an area we think institutions could do more to help work with these non-consumers, get them through that sale and help address some of these... Compete with some of these alternative options that they're facing. So that's where I think there's a lot of opportunity for lower lift ways to help out and serve this non-consumer population.
0:20:47.3 LH: That's great. And as we talked about at the beginning of the podcast, when we framed our state of the sector research, we really talked about shifting competitive dynamics, and as you were talking, it reminded me of the similarities, I think, across the challenges that the universities are facing, both with retaining and attracting talent, but also attracting and retaining students. And that is the explosion of competition from outside of higher education for these students' time for these employees' time, and the need for colleges and universities to take a hard look at their value proposition for employees or students, and really figure out ways to remove barriers and communicate and sell that value proposition to prospects. I wanna shift gears a little bit and talk about another competitive force that was really shaping a different market here, and so we're gonna talk a little bit about the masters and graduate markets and perhaps start to get into some market concentration that we're seeing here. And one of the things that we uncover, that our team uncovered as we were doing our state of the sector research was the growth in graduate enrollment that we saw over the past few years, even during the pandemic, and that was something that, Brian, you in fact predicted at the outside of the pandemic, while a lot of other industry experts and leaders were predicting the opposite. So what can you tell us about what's going on in the graduates and masters market?
0:22:22.9 BS: Yeah, well, I'm excited that you mentioned that we predicted it, I actually think we got it right, but for somewhat the wrong reasons. So we were originally predicting that we are gonna see this graduate... This boost in graduate enrollments during the pandemic, because in past recessions when unemployment had went up and the employment was higher, we saw more students go to college. What I actually think happened is that barriers to remote enrollment went down, so we did still see this push from individuals say, "Hey, maybe unemployment is worse in and we're seeing a little bit more uncertainty in the labor market." But also sitting at home, not doing a whole lot and saying, "I should do something about that. And everything is now online. So why not attend college online?" And so I think that is... Both of those that play a role, but I think that online element and sort of the incredible effect that the pandemic had in turning online engagement, online working, online learning, all sorts of different estimate... Online conferences, things like that, made those much, much more normal. So both of those things played a role. Just to quantify some of that growth, we saw 2.4% growth in graduate enrollments in 2020 versus, and also 2.1 in 2021, which is almost double what it had been for really, the previous decade.
0:23:56.2 BS: But why we think this is mainly online, is actually when we looked at institutions that were primarily online before the pandemic, so I had expertise, they already had all the information out there about here's our online programs, here's what we can offer, they had the programs smooth up and running, they were advertising as purely online, they grew by 11.4% just between 2019 and 2020. So huge, huge growth, highly correlated with having online experience before the pandemic. So that's part of why we think that growth happened and really being sort of a push towards online benefiting those big online players.
0:24:40.7 LH: I see. So it sounds like in some ways the pandemic was a story of the big getting bigger amongst the online mega universities. I'm curious, what would you say to an institution who saw this growth and perhaps has aspirations to join these online giants, but also has very real resource constraints, how can those types of institutions hope to compete? Should they try to compete? And what are the opportunities, especially in the online master's market for the institutions that aren't the mega-giants?
0:25:18.7 BS: Yeah, it's a great question, 'cause it does look like a scary market, I think if you just zoom back and you say, "Who's playing here." You've got the sort of the old guard of online giants. The Southern New Hampshire University, Grand Canyon University, Liberty University, we're talking 40,000 to 50,000 online graduate students enrolled, which is... Those are really large numbers. It's kind of wild. We're also seeing some, I would say, new giants. No one's really surprised. Like Southern New Hampshire is big, people were telling us about that in 2017. The thing that I think would surprise some watchers and folks who are interested in grad education is there's a lot of big state schools that have been getting pretty big in online and graduate education, big famous names that are probably more associated with their in-person undergraduate experiences, or maybe they're in-person graduate experiences, you think of Purdue, Johns Hopkins, Harvard, Illinois, they have online enrollments above 10,000 for each of those institutions and are pushing pretty hard to grow. So we're sort of looking at like, there's a lot of big players in this market.
0:26:32.8 BS: That does not mean that there's not an opportunity for more regional players and institutions that maybe have less resources though. What I would say is, there are these big players, they are playing nationally, they are reaching out across the United States and spending eye popping amounts on recruitment and advertising, but it's spread everywhere, or mostly everywhere. If you're a smaller institution, this is still a growing market, but you have to be targeted, you can't say, let's go toe to toe with Southern New Hampshire, you can't say, let's go toe to toe with Johns Hopkins. We have to say, let's go toe to toe with them, but here, where folks know about us, where we understand these students well, we can say, hey, we know that there's this opportunity, we're gonna help you get into these jobs that are in demand in our local region with a degree that local employers recognize and respect. And so, I think, although it's a scary sort of playing field, every institution gets to decide what the size of the playing field is, where are you going to play this game?
0:27:39.4 BS: And so you've gotta play the game where you can win and being targeted, being really specific about those places and where you're gonna spend those resources is the approach. So it's a tough game, it's a growing market, so it's a good place to be, but you definitely have to be strategic, because there's big players out there that are definitely playing hard as well.
0:28:00.9 LH: For sure. One last area that I want us to touch on today, and I think there's a lot of parallels in terms of the market and some of the competitive dynamics, it is the research funding market. This is a conversation we've been having internally for quite a while now. Again, this seems like we're starting to see some winner take most dynamics here when it comes to research funding, so could you share and give us a sense for just how big is the gap these days between the haves and the have-nots, as far as competing for research funding, and in a similar vein too the online graduate market, what do you advise for institutions who aren't able to generate hundreds and millions of dollars for research expenditures every year, what's the opportunity there?
0:28:53.6 BS: Yeah, so I love this question 'cause there's a very nice clean answer to what the gap is, and gaps about a billion dollars. We can put pretty much that number on here. There's 19 institutions that spend a billion with a B or more on research, while half of institutions have research expenditures that are... Or half the institutions that are spending on research, so not all the institutions, there's plenty that have zero, but half of the institutions that are spending on research, spend less than $12.5 million a year. So this is a huge goal in research spending. We can even take a different approach there and look at, let's say the 90th percentile institution, you're an institution that spends more than 90% of institutions that are spending on research, you're also still about a billion dollars behind the top 1% of institutions, and of course, the second leading institution, so number two in the nation in terms of their research expenditures, they're spending a lot.
0:29:55.1 BS: They're still more than a billion dollars behind the leader, which is Johns Hopkins University, which has... They're sort of an outlier, but wherever you are in the research market, if you wanna compete, you need a billion more dollars. So some institutions might be able to say, we can scale up and get that. Really though, unless you're in the top 50, it's gonna be really pretty tough to be playing and competing and running hard at that game, at saying like, we're just going to become the top research institution, like, you need to start making friends with Elon Musk or with Bill Gates or someone who's got a few extra billion on hand. The implications though I think are similar in terms of what we were talking about for the grad area. It needs to be a little more targeted and say, hey, here's where we're good, here's where we can really play, and probably less of the going toe to toe with the big, well-known institutions and what some of our colleagues have been looking at here has been that hub and spoke model.
0:31:04.3 BS: So thinking about how institutions can, big institutions that they're working near by or they have partnerships with, they'll bring in these large grants, these large dollar amounts, but we'll need some assistance and probably have elements of these big grants where your institution can be helpful. And so identifying, making these connections, seeing how as a potentially a smaller player in the research market, you can be working with these large players, helping them out with these research grants, taking these sub-grants, that's really where we're thinking many of the institutions will become, should be playing and a bigger and growing part of the research ecosystem moving forward. So a lot of stuff there that I think is very interesting. Again, scary, high-level numbers, but still a strategy to compete and move, it just means playing the game a little bit differently.
0:32:03.2 BS: I'd love to pivot it back to you, we've covered a lot of different and I think exciting topics, it really only scratched the surface on some of our state of the sector research here. I open the podcast, so I'd love to get your sense on if you were to pull out those takeaways from what we've talked about today for our listeners, what would you recommend? What sort of the go back to the office and start thinking about, of things to take away here?
0:32:29.8 LH: Sure, so I think first and foremost, when it comes to the talent crisis, is establishing and articulating an employee-facing brand for your institution. I think colleges and universities are really good at investing in student-facing brands and thinking about students as their customers, but I think it's going to be increasingly important to invest and compete for employees as well, and so, really taking time to articulate that employee-facing brand and making sure that you're including within that brand, the advantages that your institution can uniquely provide as an employer. But the second thing I would say in those “winner take most” markets that you were just describing, so online graduate education, research funding, as you mentioned, most institutions aren't going to be able to go toe-to toe with the giants. And so, thinking strategically about what does your pathway to success look like? Is it doubling down on a more niche but differentiated area of expertise? Is it really focusing on your reputation with any given region, or perhaps is it through a partnership? Like you just mentioned with the hub and spoke model with another institution who has complementary strengths to your own.
0:33:48.7 LH: I think institutions are gonna have to be more creative around charting a path to success in these “winner take most” markets, because direct head-to-head competition isn't going to be feasible for most. And then the last thing I would say is, institutions really need to learn how to sell higher education and not just their own institution to this growing population of non-consumers. When you are competing against the workforce, against off-campus responsibilities and other life challenges, you need to take a broader approach, you need to be able to sell the value of higher education at large before you can effectively communicate the value of your institution. And so, I think it involves a little bit of going back to the drawing board and really being intentional about what is the value of higher education for this generation and how can we communicate that to folks, at the same time as we're removing the barriers that we often throw up in that pathway into higher education. So those would be the three things I would say, establish that employee-facing brand, be creative about your path to success in these “winner take most” markets, and then really be intentional about selling the value of higher education to this growing generation of non-consumers.
0:35:20.0 BS: Fantastic. Well, thank you for summing that up, Larisa, and it was a pleasure chatting with you today.
0:35:26.5 LH: Thanks, Brian, it was great to be with you today.
0:35:34.2 BS: Thank you for listening. Please join us next week when special guest, James Kvaal, President Biden's Under Secretary of Education, joins the podcast to discuss the administration's stance on student loan forgiveness and many other topics. Until then, thank you for your time.
Don't miss a beat
Visit our podcast homepage for additional episodes, information on our expert contributors, and more.