Higher Ed’s Talent Imperative

As college and university leaders chart a course for the decade ahead, they face ever-greater challenges and ever-higher strategic ambitions: intensified competition for students with heightened needs and expectations, transformations of both digital and physical campuses, and new demands to lead local and regional economic development. At each institution, the most important asset for achieving these and other critically important aims is talent. All too often the cabinet relegates questions about talent to unit leaders or HR functions. But how cabinet leaders decide to manage talent as an asset, or whether they opt to not manage it, will determine their institution’s ability to thrive.

This executive briefing focuses on the growing business imperative for higher ed institutions to manage their talent as a strategic asset. It outlines five critical dimensions of change that have reshaped the competitive landscape for talent and spurred progressive out-of-sector employers to transform their talent strategy: mindset, investment, organization/function, job market, and social contract.

Cabinet leadership teams can use this briefing to prioritize the table-stakes investments their institutions must make to compete in today’s market and, ultimately, position themselves as attractive talent destinations. Download the full brief or read key takeaways below.

Our focus on higher education staff

Higher ed employs a uniquely complex workforce. It encompasses both academic faculty and administrative staff, who are often divided along structural and cultural lines. These distinct employee groups require their own specific talent management practices and policies, although institutions’ broader talent strategy and investments must include both.

This brief focuses primarily on higher ed staff, given the disproportionate level of turnover in this group. In some instances, we specifically call out where faculty have been impacted by staff shortages or disengagement and where aspects of talent strategy extend to both faculty and staff.

Use EAB’s Talent Strategy Diagnostic to Assess Current Performance

What higher ed stands to gain from treating talent as a strategic asset

Higher ed is ill-equipped to retain and recruit sufficient staff, much less top-tier talent

The 1990s were a pivotal decade for talent strategy at out-of-sector organizations. The advent of the internet and job search engines such as Monster and Hot Jobs introduced a wealth of options to employees. It simultaneously allowed employers to cast a wider net for top-tier talent. Corporate employers responded by abandoning the assumption that employees would dedicate their lives to one company and instead developing competitive recruitment, retention, and engagement practices. Instead of trying to keep employees in their current roles for as long as possible, corporate employers embraced internal career mobility with the goal of strategically moving people into their next position within the company.

But while the out-of-sector job market transformed, higher ed remained largely insulated. Still able to attract talent with stability, benefits, and mission orientation, colleges and universities did not feel the same pressure to invest in infrastructure or develop the capabilities to proactively recruit, retain, and engage the types of talent needed to execute their broader organizational strategy.

By the fall of 2020, colleges and universities were experiencing an exodus of talent as we all tried to navigate the early days of the pandemic and the volatile labor market, and the economic shocks it brought. Sector-wide, four-year institutions lost 11% of their labor force in 2020, a drop-off steeper than that experienced by K-12 schools or hospitals during the same period. It took a herculean effort for the sector as a whole to return to overall staffing levels approximating “normal.” And even for the institutions with sufficient staffing, the onset of disengagement campus-wide threatened leadership’s ability to execute institutional strategy.

Historically high hiring growth stresses higher ed HR

Percent change in total employees from January 2020, seasonally adjusted

How the Crisis Revealed Higher Ed’s Lack of Talent Infrastructure

Cascading impact across every priority on campus

The higher education sector overall has rebounded to near pre-pandemic staffing levels, which is a testament to the hard work of campus leaders and HR teams. But institutions are far from out of the woods. The narrative of recovery and double-digit hiring growth has overshadowed several deeper, longer-term sources of workforce instability. Many institutions continue to struggle with high turnover rates that threaten business continuity and increase workloads for staying staff, thereby fueling disillusionment.

Perhaps even more alarming than the risks to business continuity and campus operations is the downstream impact on student experience and success, both inside and outside the classroom. For example, a shortage of mental health counselors can directly result in reduced services for high-need students, leading to decreased academic performance and eventually increased attrition.

The failure to invest in talent infrastructure and strategy is, in fact, a failure to invest in student success. If institutions strive to be student-centric, they must first recognize the importance of being employee-centric. That is a critical prerequisite for recruiting and retaining the workforce needed to deliver on their promise of a high-quality student experience.

What’s more, without a sufficient and engaged workforce, institutions must also confront the broader challenge of making progress on other strategic initiatives, including their plans to execute them.

Understand the Ripple Effects of Poor Talent Strategy

Strong business case for investing in higher ed talent (and mounting risks for those who don’t)

While the consequences of underinvesting in talent infrastructure and strategy are steep, high-performance talent organizations reap the rewards. In the private sector today, more than 80% of a company’s value is intangible assets, with human capital the largest and fastest-growing proportion. As a result, hiring and retaining a talented and diverse workforce drives growth and financial performance for out-of-sector organizations. This means investing in people is good not only for employees but also for the bottom line. Moreover, managing the organization is managing its people.

Even more so than many of their out-of-sector competitors, colleges and universities are inherently in the business of human capital development. That means the value of higher ed’s intangible assets, especially faculty and staff, is likely even higher than in other sectors, and the potential gains that come from investing in talent as a strategic asset are an even greater source of competitive advantage.

Sizing Risks and Opportunities

How did we get here? 5 critical dimensions of change that have reshaped competition for talent

For decades, labor market dynamics changed around higher ed. But while out-of-sector employers changed with the market, higher ed stood still. Today, campus leaders ignore broader labor market transformations and the corporate talent playbook at their peril. Out-of-sector ideas have long been a source of innovation for higher ed leaders, but when competing for talent, out-of-sector practices are no longer optional. Colleges and universities that once competed mainly with one another for talent now must go head-to-head with corporate employers on a large scale. Nearly two-thirds of higher ed staff are open to opportunities at private, for-profit companies, which is almost the same proportion as those looking within higher ed itself.

Realistically, most institutions cannot compete with corporate employers on salary alone. Cabinet leaders have therefore asked us over and over again: how can we compete for talent beyond compensation? While some of the most commonly cited responses are “benefits” or “better HR technology,” the answer is actually much, much bigger than that.

EAB has identified five critical dimensions of change that have reshaped the competitive landscape for talent and spurred progressive out-of-sector employers to transform their talent management strategy.

While higher ed faces some distinct challenges in responding to these changes, campus leaders can no longer wait to develop core talent capabilities over time. Instead, they must “leapfrog” some of the developmental steps other companies took and undergo rapid talent strategy transformation.

Explore the 5 Dimensions and Next Steps for Cabinet Leadership Teams

Preparing for a workforce with fewer people

The demographic cliff just as urgent for the workforce

The looming demographic decline of 18-year-olds has provoked a robust response at many institutions concerned about the threat to enrollment. But few institutions also recognize what this population decline will mean for their future workforce. It will be yet another of the far-reaching effects of the coming sansdemic, a term meaning “without people.” By 2028 the U.S. will face a six million deficit in workers aged 15–64. Today’s heightened competition, smaller applicant pools, and constant turnover are not temporary phenomena—they are long-term structural challenges.

Just as campus leaders have responded to the enrollment threat, they must now prepare to weather the contracting labor force. Not only will competitive recruitment, retention, and engagement be more important than ever, but institutions will also need to proactively develop the administrative efficiency, flexible worker skillsets, and top-of-license performance required to operate with a leaner and higher-performing workforce. The importance of recruiting the right people, not just enough people, to the right roles will be at a premium.

Navigate the Changing Labor Market