The Strategic Importance of Human Resources
In the time it takes to read this sentence aloud, someone in the United States will turn 60 years old—and that baby boomer could be a faculty member or administrator at your institution. Are colleges and universities prepared to lose these longtime service employees? Are these employees financially and psychologically prepared to retire?
According to The Conference Board (“Managing the Mature Workforce,” 2005; www.conference-board.org), approximately 64 million baby boomers—more than 40 percent of the labor force—may retire by the end of the decade. That statistic bears out at Montgomery College, Rockville, Maryland, where up to 40 percent of the community college’s 500 full-time faculty and 1,500 staff will become eligible to retire during the next five years, says Vivian Moore Lawyer, chief human resources officer. In conjunction with the college’s center for professional development, her office has launched an institution-wide initiative to determine how to move forward in a manner that will achieve demanding hiring goals but also maintain the institution’s commitment to affirmative action and other employment policies.
Faculty transition. Understanding and managing the bulge of an aging faculty is among the biggest human resource challenges facing higher education, says Madeleine d’Ambrosio, vice president and executive director, TIAA-CREF Institute, New York City. “For some institutions, retiring baby boomer faculty will free space for institutions to meet new demands for increasing faculty diversity. In other instances, the abrupt loss of faculty may deplete core strengths in key disciplines.” In both cases, institutions must be careful to develop appropriate and cost-effective incentives for faculty to stay or leave, says d’Ambrosio. One way to achieve an orderly transition is with practices such as phased retirement, with faculty members voluntarily waiving tenure to work on a part-time basis. “Strategies for gradual retirement can provide institutions an upper hand in their succession planning,” says d'Ambrosio.
Retirement readiness. High-level focus on human resource practices and policies is not only about managing program costs but also about optimizing workforce goals. While retiree health and pension benefits represent significant costs, they also influence employee decision making, says d’Ambrosio. “Without what is considered adequate retiree health coverage, for example, many faculty may be unwilling to retire. And with tenure, you have a labor force that doesn’t have to retire.” The same is true for retirement saving. If employees are not encouraged to save, then they may not feel ready to retire—either financially or psychologically,” says d’Ambrosio. “Retirement readiness presents a big issue for chief financial officers who must grapple with how to manage and communicate benefits costs.”
Faculty pay. Until three years ago, Karen Hutcheson rarely got requests to examine faculty compensation. While faculty hiring and salary concerns were once the domain of academic affairs or the faculty senate, an institution’s human resource function is increasingly involved in faculty search and compensation discussions, says Hutcheson, senior higher education consultant for Sibson Consulting, a division of Segal, Boston. “Because faculty are key to institutional success, managing faculty compensation is critically important—from identifying guiding principles and the benchmark group; to developing guidelines around specific pay actions such as promotion, tenure, and scholarship; to evaluating internal and external pay equity.”
Top leader turnover. With increased focus on fundraising, national rankings, and operational efficiency, the requirements for experience and talent place even greater strain on institutions looking for their next president. To fill these high-level requirements amid a competitive labor market, the reality is that more institutions face recruitment of top administrative and presidential leaders from outside higher education, says Elizabeth Adkins Neumann, principal, Brill Neumann Associates Inc., Boston. “That sets the stage for a potential culture clash as new leaders bring their corporate ideals and expectations.” In addition to creating programs that develop leaders from within, effective succession planning must include concerted efforts to welcome those from outside higher education and to help them succeed in the unique mission-driven culture of colleges and universities, says Neumann.
Workforce development. Barbara Beck is associate vice president for finance and administration and director of human resources, Skidmore College, Saratoga Springs, New York. As a former corporate “outsider,” she agrees that new leaders too frequently aren’t given the tool sets they need and believes that commitment to employee development should extend to all levels within an institution. “Demographic shifts spell challenges for recruiting line workers as well as top-level talent. Some institutions are struggling to bring in grounds crews,” says Beck, part of an ad hoc gathering of human resource professionals from 25 small liberal arts colleges who meet twice annually and regularly exchange best practices and data. Given workforce realities that spell stiff competition for a shrinking pool of applicants, Beck believes some institutions may face changes such as outsourcing of bookstore operations based on an inability to staff those units on their own. “In the same way that institutions track prospective student populations, more may need to consider creating outreach training programs to develop a pool of employee recruits.”
Competition. Ample professional development leave and a growing menu of on-campus programs and training seminars are two ways Montgomery College is setting itself apart from other community colleges in the state and at the same time honing the skills of faculty and staff at all levels, says Lawyer. Intentional workforce development efforts are something more institutions must engage in to successfully compete not only with peer institutions across the country but with other higher education institutions across town, says Peter Martel, former associate vice president of human resources, Bridgewater State College, Massachusetts. As competition heats up with for-profit employers for local workers, Martel believes more institutions will face a tough fight to maintain or reposition themselves as employers of choice in their communities. Impending recruitment challenges alone should convince more leaders of the need to include a place for human resource officers in key institutional decision making, says Martel.
Karla Hignite, principal of KH Communication, Tacoma, Washington, is editor of NACUBO’s HR Horizons; e-mail: email@example.com.