Today I sat in on a one-hour webinar presented by Inside Higher Ed to review the results of their recent survey of business officers at American colleges and universities. You can read the full report on the survey results here. Presenters were Doug Lederman of Inside Higher Ed, Mary Jo Maydew of Mount Holyoke College, and Larry Goldstein of Campus Strategies.
About the survey: 606 participants, representing two-year, four-year, and graduate institutions from both the public and private sectors (including 9 for-profits). All participants represented institutions with at least 500 students. Participants were guaranteed anonymity in order to encourage frank and truthful responses. The voluntary survey was administered electronically over May-June, 2011, and the response rate was approximately 25% of those invited to participate.
Some takeaways from the report and the webinar:
- 69% of CFOs reported that their institutions were in good or excellent health. That is a rosier picture of financial health than was expected. However, it leaves 31% who rate their institutions’ financial health as fair, poor, or failing.
- Most respondents felt that the greatest negative impact of the recent economic downturn and consequent budget cuts have been to staff morale, and that academic programs and services have suffered little. I challenged this opinion a little. It seems to me that any data showing impact on academic programs and services would come from lagging measures, and so, as the presenters agreed, it’s probably too soon to really know for sure. Not surprisingly, CFOs predicted that it would be impossible to protect these programs and services from negative impact in the face of additional cuts.
- Just over a third of respondents reported that financial data played a critical role in institutional decision making and that budgets were strategically aligned. Oh, mercy!
- According to the report, “Just under a third (30.7 percent) are cutting underperforming academic programs while more than a fourth (27.1 percent) report terminating employees (including faculty) for poor performance.” Pause for a moment to appreciate the fact that, faced with severe financial constraints, colleges and universities will now consider firing poor performing employees. Pause for a second moment to consider the confidence of these colleges and universities that they will not need to replace these poor performers (otherwise, firing them would not achieve any cost saving). Pause a third time to ponder why these poor performers — who apparently will not be missed — have been kept on the job.
- Almost 40% of respondents expected to resort to outsourcing and partnership with other institutions as a cost-saving strategy. I was particularly interested in the opinions of the presenters, who were unsure whether that much outsourcing/partnering would really take place. Mary Jo Maydew pointed out that partnering with other institutions can be effective, but such partnerships require significant time and effort. They are by no means short-term solutions, nor can they be executed successfully without the proper up-front investment. Larry Goldstein recommended that institutions not ignore partnering between entities within a single institution — centralizing or sharing certain administrative services, perhaps.
- The topic of communication came up a few times. CFOs in the survey indicated that faculty generally did not understand the institution’s financial challenges (yet two-thirds reported that most faculty had been supportive in coping with those challenges). Presenters discussed the need for the CFOs to communicate about financial issues and challenges better, and to be much more transparent in the budgeting process.
All in all, it was an interesting hour. The webinar was smoothly presented, and the discussion was engaging. Attendees were invited to submit questions electronically, and many (including one of mine) were answered over the course of the presentation. The presenters obviously have good insight into the life of a CFO in the higher education space today. A self-report survey of this sort is most effective for gauging respondents’ mood and most pressing concerns. A more objective and comprehensive study (including quantitative data collection and artifact review) is certainly outside the scope of Inside Higher Ed. Given what we can see in the self-report data, however, I hope these institutions are undertaking that very analysis on their own.