The Challenge for Higher Education – John Cridland’s thoughts on the future of Higher Education

With the effects of the credit crunch still filtering through organisations across the world many employees are beginning to think about the future of their own organisation or sector.

For Higher Education the question of what effect it will have on the shape and direction of the sector is a subject of interest to most in Higher Education (HE). So when John Cridland CBE, Deputy Director General of the CBI, shared his thoughts and vision on the future of the HE sector at the Universities Personnel Association there was keen interest.

 John Cridland opened his speech with a warning of tough years ahead. Not only is the sector likely to face reduced levels of income from central government, but the sector itself has also been affected by substantial increases in cost and lost income. University costs have increased substantially with above inflation wage increases and increased pensions contributions (the real cost of unfunded pensions is now predicted to grow to 1 trillion pounds). The cost of staff now equates to three fifths of University expenditure, which is set against a background of falling income from foreign and home students and income from commercial operations.

So where did John Cridland see the future of HE?

Reduced income in the sector he said, will inevitably lead to the reduction in the size of the sector. The sector needs to follow the American model, where universities work closely with business to align their output to meet the needs of its customers. The challenge for businesses to research, train staff and move into new markets will be more important now than at any time. So there is a real opportunity for Universities to partner with business and source new funding streams.

Higher Education needs to focus particularly on the research and development of renewable energy sources. John highlighted the fact that there is not only a need for research and development, but also more high qualified graduates with the skills to support the development and manufacture of this technology in the future. In summary, it’s both quantity and more importantly quality staff to fill the current skills shortage. Therefore UK Universities will need to focus on:

• Skills Gap – Greater focus on growing the number of students studying Science, Technology, Engineering and Mathematics (STEM) courses, as the UK is falling behind leaders like China which educates three times the number of STEM graduates than the UK. Growth will need to come from women and ethnic minorities to help double the number of STEM graduates.
• Adaptation and Change – The sector will need to shrink and refocus their activities putting new and old customer groups at the centre of all they do. Restructures, redundancies, mergers and shared services are all likely as the sector contracts.
• Collaboration with business – The sector will need to change and adapt in the way it works with business. HE consulting has grown to £300 million, but less than 3% of firms have a direct link with their local university. Universities and academics will need to work closely with businesses in all sectors, especially the service sector to drive research and development and provide education that meets the needs of business.
  Research and Assessment Exercise, needs to evolve to encourage greater collaborative working with business

So what does this mean for HR?

HR needs to facilitate and support the changes necessary to allow Universities and their academics to work with business. Training and development will need to focus on helping academics work in new and more flexible ways. Centralising services and working with other institutions will become necessary to reduce cost and refocus the output of higher education. Finally, a customer service culture will need to be fostered to develop the relationships between business and higher education to secure its future for the long-term.