Higher Education Industry Outlook: 3 Strategies to Navigate the Hurdles Ahead

• Digital Upgrades Deliver a Superior Student Experience
  
• Modern Budgeting and Planning Systems Give Institutions an Edge
• AI Powers Efficiency for Staff and Students

For the higher education industry, the road ahead offers a fair share of challenges-a significant multiyear decline in traditional-age college students, for one-as well as opportunities. Consider that a whopping 86% of new jobs by the end of the decade will require postsecondary education, McKinsey finds.

Industry leaders are also navigating an environment of heightened expectations for higher ed offerings and negative perceptions around the value of a higher education. Just 36% of adults in a 2023 Gallup poll reported a great deal of confidence in higher education, compared to 48% in 2018, and 57% in 2015.

"The issues of value and affordability are central to the value proposition of higher education today and beyond," said Mark Hussey, CEO and president, Huron, at Workday Rising in 2023. "The sustainability of the higher education business model is under increasing pressure. The business-as-usual response is just not going to work."

To enable a more sustainable business model and future, college and university leaders are seeking technology that transforms and improves how their institutions operate, so they can be more resilient and adaptable. Here are three ways the industry can navigate the roadblocks ahead.

Digital Upgrades Deliver a Superior Student Experience

College enrollment is slowly rebounding from pandemic drops-undergraduate enrollment grew by 1.2% in fall 2023-but with a smaller pool of potential students to draw from, schools will need to find ways to set themselves apart. Often that comes down to the kind of student experience they deliver.

Higher education leaders know their mission hinges on student success-that's why they rank student experience and satisfaction as their number one priority, according to a Workday-sponsored IDC survey. But what do students want? Engaging, supportive experiences that enhance their well-being and increase their chances of academic, personal, and professional success, research shows. In other words, no small ask.

"At the core of all effective strategies for growth, you'll see a laser focus on student experience and success," Hussey said. That focus involves aligning educational offerings with the skills and competencies that the job market requires-a strategy that requires digital solutions, process improvements, and data-driven insights, Hussey added.

Among college students, 96% say a high-quality digital experience is important to their satisfaction with their campus.

Schools must support both traditional and nontraditional students by focusing on the learner mindset and designing experiences based on a deeper understanding of the students' needs, an Accenture research finds.

To achieve such high levels of student support, colleges and universities will need to focus on digital transformations that enhance services from preadmission to postgraduation. Most leaders agree-78% of higher ed CIOs are focusing on digital transformation to drive student success, and 73% consider digital transformation a high or essential priority, according to an Inside Higher Ed survey.

Students also want to have a say or provide feedback on the transformation. Today's students expect technology that makes it as simple to register for courses, track academic progress, and schedule meetings with professors as it is to order lunch. But most legacy systems can't deliver.

"Many of the systems supporting the student experience were built for a much different time: the 1990s," says Shane Topping, Workday senior director of product marketing for higher education. "The iPhone wasn't out yet, and the internet was just becoming a mainstream thing. The student systems were meant to house transactions. They weren't thinking, 'How will this impact the student, and what will make it easier for them to register, pay a bill, or check on financial aid?'"

Changing that reality can go a long way toward boosting student satisfaction. In fact, 96% of college students say a high-quality digital experience is important to their educational satisfaction, Accenture found.

Learn how Cornell University is using Workday Skills Cloud to empower employees and open up growth opportunities.

Modern Budgeting and Planning Systems Give Institutions an Edge

Amid seismic sector shifts and evolving business models, higher ed institutions need to modernize their budgeting and planning processes so they can thrive-not just survive.

More than one-third (36%) of CFOs at colleges and universities expect their school's financial conditions to worsen over the next year, according to a 2023 Inside Higher Ed survey. But siloed data is making it tough to anticipate and adjust to financial realities. And 21% of financial leaders strongly agree their institution has the data needed to make informed decisions.

Higher ed leaders need access to timely, accurate data on everything from enrollment and recruitment to faculty and staff administration to empower them to look ahead. Real-time data can help institutions offer the right courses at the right time or judge whether the operational costs of increased enrollment are worth the additional revenue.

Not surprisingly, campus leaders are clamoring for more data to improve their decision-making and help make more informed strategic choices that bolster institutional and student success, an Educause survey found. How can institutions deliver? By investing in data infrastructure and implementing modern ERP solutions that provide a single source of data truth, Educause found.

"Having access to information at all levels of an institution is just simpler," Topping says. "It frees staff to do the jobs they really want to do and it allows them to focus on what's most important based on real-time insights."

"The issues of value and affordability are central to the value proposition of higher education today and beyond."

Mark HusseyCEO and PresidentHuron

Recognizing the institution needed to become more change-ready, Wake Forest University recently replaced the legacy systems that were keeping the university "from being the agile institution we wanted to be," said Mur Muchane, vice president of IT and CIO, Wake Forest, at Workday Rising in 2023. Under a single, unified system, the university has broken down departmental silos, slashed system maintenance costs, and reduced administrative overhead, Muchane said.

AI Powers Efficiency for Staff and Students

Generative AI isn't on the horizon in higher ed-it's already here. A majority (58%) of college instructors say their students are using AI in the classroom, according to a Wiley report.

"The whirlwind that is generative AI has swept across our college campuses with remarkable speed, and there's no going back," says Smita Bakshi, senior vice president of academic learning at Wiley.

Higher ed leaders are well aware of the transformative power of AI on both the front and back end. In a Chronicle of Higher Ed survey, more than three-quarters (78%) of higher ed leaders agree that AI offers new ways to improve higher education, and 59% say AI tools can help reduce campus costs and create new efficiencies.

Still, while AI has long been used to improve the efficiency of rule-based administrative functions such as enrollment management in higher ed, what's new is the yet untapped potential of AI to increase automation and improve the efficiency of nonrule-based systems. For instance, AI could be used to respond to more routine student queries. Already, almost 40% of higher ed CIOs report their institution is in the early or advanced stages of using generative AI technology for administrative tasks, per an Inside Higher Ed survey.

An additional exciting use for the technology is to strengthen students' employment opportunities. AI can analyze market trends to help students and educators better identify in-demand skills, and better match students' skills and experience with internship and job opportunities. Internships, in particular, give students a leg up in the working world, according to a 2024 report from the Burning Glass Institute and the Strada Education Foundation. The chance of becoming underemployed after graduation drops by almost half for students who participate in an internship during college.

"The challenge for institutions will be how best to adopt these technologies while managing the risks," Hussey said.

No matter where you are in your digital transformation journey, Workday can help. Here's how.