“After 2012/2013, a major decline in the size of the youth cohorts would begin to affect [postsecondary] enrolments”
– Darcy Hango and Patrice de Broucker, Statistics Canada 2011
As predicted by Statistics Canada, postsecondary enrolment is projected to decrease in the coming years, meaning postsecondary institutions are going to have to fight harder for students, staff and funding. But why is there going to be a downward trend in enrolments? Well most of us are familiar with the term ‘Millennials’, more formally known as Generation Y - the generation born roughly between 1977-1994. What you may not be familiar with is the size of this generation; at 85M they’re the largest cohort since the Baby Boomers.
The tail end of this generation will be finishing up their postsecondary educations in the next couple of years. Those that follow, Generation Z, is just starting to enter the postsecondary system. The major issue for higher education organizations is that the size of this cohort is less than 1/3 the size of Generation Y. The result; their numbers are just not big enough to support the enrolment numbers postsecondary institutions have adjusted too over the last decade or more.
This could result in several obvious challenges, however I want to discuss the financial management problems that could arise as a result of decreased enrolment.
- First, with less enrollment post secondary institutes will need to rely more heavily on non-tuition based funding
- Secondly, they’ll need to increase efficiency within the organization to improve overhead costs, while still offering the declining number of students a quality institution they’ll want to attend
1. Increasing External Funding
Whether you’re a private or public postsecondary institution less student enrolment means less tuition income. This is going to result in postsecondary institutions relying more heavily on external funding. In order to maximize your external funding, your institution will need to differentiate itself from other also seeking support. For funding, one of the key ways is done through comprehensive, accurate, up-to-date reporting provided by your Finance Department. The more professionally you can present your organization and the more confident you are in your data, the more professional you appear and the more likely you are to get external funding. Think “Dragons Den” – the more professional and comprehensive your data and reports, the easier it becomes to ”sell” your institution as a worthwhile and low risk recipient.
For organizations that lack a modern, functionally rich Enterprise Resource Planning system, compiling the data needed to produce the caliber of reports necessary can take weeks to do and will be based on stale data. With a robust ERP system you could run a report within minutes and have a professional financial report completed and ready to show in a timely manner. Most modern ERP systems have standard report templates installed on their system or custom versions tailored to your needs, which means the finance team will be ready to go with a professional report when the Executive Board makes a request for the data.
2. Improving Overhead Costs
A good way to reduce overhead costs is running your institute more efficiently. One way to do this is by reducing manual processes. You can reduce the amount of time your staff spend on tedious manual processes and let them focus on more value add tasks such as student recruitment or forecasting/data analysis (not just presenting figures) – the two things that are really going to matter as this next cohort enters postsecondary institutions. This also has the added bonus of improving staff moral as they will be carrying out more useful and rewarding work. Having a more modern ERP system can dramatically reduce manual processes (see the Canadian Museum of History case study). With older ERP systems you may suffer issues around extracting data, stale or incomplete figures or having to carry out external data manipulation in Excel for example. Moving to a newer ERP system can get you away from these time consuming processes. Again, this means your organization can do tasks within minutes instead of hours, or hours instead of weeks. Creating more efficient staff means you can accomplish much more in the same amount of time with the same headcount – cutting back the unnecessary cost of spending hours running analysis’ that a system can do in seconds.
The Peak of Academic Enrolment Hit Two Years Ago – It’s All Down Hill From Here!
As a result of a significantly smaller cohort starting to come into postsecondary institutes, recruitment and funding will become two key areas of focus for schools. The need for more professional reporting capabilities and more efficient processes will become very advantageous. Getting these systems in place now is important as the peak of enrolment hit two academic years ago (Stats Canada).
Like the students they educate, Institutes need to invest now to succeed in the future.