As colleges and universities grapple with financial pressures, adjusting instructional capacity to align with shifting student demand has become a critical strategy. rpk GROUP’s latest report, The Financial Sustainability of Higher Education: Bright Spots & Challenges 2012 to 2022, highlights how institutions have adapted their faculty staffing models in response to enrollment shifts—and where challenges still remain.
Higher education is a labor-intensive industry, with compensation comprising a significant portion of an institution’s operating expenses. Effectively managing faculty staffing, course loads, and instructional efficiency is crucial for financial sustainability. However, making these adjustments is not without challenges, particularly given entrenched labor models and institutional cultures that resist change.
Key Findings
In recent years, institutions have had to rethink how they deploy faculty resources. Some have made progress in adapting to shifting enrollment trends, while others continue to struggle with outdated or inflexible staffing models. The following trends illustrate how institutions are managing instructional staffing and where challenges persist:
- Flexible labor models provide an advantage: Institutions that have adopted more flexible labor models through the use of part-time faculty have demonstrated a greater ability to respond to enrollment declines. This flexibility was particularly evident at public nonresearch institutions over the past decade.
- Institutions have excess instructional capacity: While the mix of full-time and part-time faculty has a significant impact on financial sustainability, an even more critical approach is maximizing the instructional output from all faculty. Faculty throughput—a measure of student credit hours per full-time equivalent (FTE) faculty—declined across public institutions, hitting decade-long lows by FY22. This suggests that many institutions have the capacity to serve more students without increasing faculty numbers, presenting an opportunity to improve instructional efficiency while maintaining academic quality.
Increasing Efficiency Without Sacrificing Quality
Adjusting instructional capacity can help ensure institutions meet increasing student needs while also moving toward a financially sustainable future. Several strategies can help colleges and universities navigate this challenge:
- Optimizing faculty position allocations: Institutions should regularly assess whether faculty resources are allocated to departments with strong student demand. Reallocating positions from low-enrollment programs to growth areas can improve financial health without compromising academic offerings.
- Balancing tenure-track and contingent faculty: While tenure remains valuable for academic stability, increasing reliance on multi-year contracts for non-tenured faculty can provide the flexibility institutions need to respond to enrollment fluctuations.
- Focusing on student credit hour (SCH) production: Institutions would be well served to focus on total SCH production and not just the number of courses taught in assessing faculty workload.
A Path Forward
The financial sustainability of higher education requires institutions to be proactive in managing faculty resources. Leaders must navigate the cultural and operational challenges of instructional realignment, while maintaining a focus on student success. By making data-driven adjustments to faculty staffing and outputs, colleges and universities can better position themselves to weather financial uncertainties and continue delivering high-quality education.
Stay tuned for more insights as we unpack additional findings from the Financial Sustainability of Higher Education report.
Want to dive deeper? Download the full rpk GROUP report here. And register for our upcoming webinar on Thursday, April 3rd at 1pm ET (register here).
During the webinar, rpk’s Rick Staisloff and Donna Desrochers will share key findings from the report. Later, they will engage in conversation with industry leaders, Terry Brown, Vice President for Academic Innovation and Transformation at American Association of State Colleges and Universities, and Ed Smith-Lewis, Senior Vice President, Strategic Partnerships and ICB at United Negro College Fund, on the financial sustainability of higher education and the impact on institutions.
