Transforming HR to better support higher education institutions

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Faculty and staff are often key contributors to whether colleges and universities can meet their strategic objectives, which range from improving outcomes for students and increasing the diversity of their student and faculty bodies to creating a more inclusive culture and expanding research impact. But like most organizations, higher education institutions face increasing competition in the race for talent—both for HR talent and the people HR recruits.

The COVID-19 pandemic upended the US labor market, and the number of job openings is far outpacing the pool of available workers.1The Great Attrition is making hiring harder. Are you searching the right talent pools?,” McKinsey Quarterly, July 13, 2022. Many employers are rethinking what it takes to attract, develop, and retain talent. Higher education institutions are no exception. In recent conversations, college and university leaders have indicated that universities’ historical advantages for attracting talent—such as a strong brand, compelling mission, greater flexibility, and perceptions of a better work–life balance—are no longer sufficient in distinguishing them. Indeed, in an era of high inflation, and with companies increasingly offering more flexibility, the gap between higher education and corporate America is widening.

Human resources can play a pivotal role in maintaining a robust higher education talent pipeline, supporting faculty and staff, and building new skills across an institution. But many higher education faculty members, as well as clinical and research leaders, have told us that their HR functions need to evolve beyond what they mostly are seen as: compliance and administrative functions. In our conversations with administrators of higher education institutions, some have even suggested that a lack of strong HR engagement and support has delayed implementation of university strategies.

But higher education HR faces a unique set of circumstances, including having to operate within a decentralized governance structure that often reduces HR’s focus to compliance and administration rather than talent attraction, development, and retention. In this article, we examine the common challenges HR faces in playing a central and strategic role in universities. We also explore how an integrated approach that focuses on building capabilities and redesigning processes could help HR leaders overcome these hurdles to better support the university in achieving its strategic objectives.

HR today: Core challenges across universities

Current HR functions tend to focus on executing existing processes rather than on more strategic activities such as workforce planning. However, a more agile, strategic, and collaborative HR function could help universities be successful in this new era.

Expanding work beyond the execution of existing processes is a common challenge in HR departments across industries and sectors. But this challenge can be even more pronounced at colleges and universities given that most have a decentralized governance model, many processes tailored to meet different university needs (for example, one process for hiring faculty and another for hiring researchers), and poorly defined HR career paths.

Lack of alignment between the HR function and the rest of the university

University HR departments often have a central HR function analogous to “corporate HR” at many large private-sector organizations. These organizations often report to a vice president or the equivalent of a COO, and they set university-wide policies and procedures. Individual colleges or departments (especially in science, technology, engineering, and mathematics fields) may also hire their own HR staff, similar to business-unit HR in the private sector. The role of these staff members is often to meet a particular department’s individual needs, such as hiring and managing research teams to fulfill staffing requirements based on grant funding.

That said, unlike in the private sector, where chief human resources officers (CHROs) typically report to the CEO, university CHROs often do not report directly to the university president. In addition, these CHROs rarely have a university-wide mandate on the more strategic topics that cut across areas of the university, such as employer branding, modern organization design, cross-university career paths, culture, and employee experience. In fact, some of the most strategic activities related to human resources—for example, processes to determine faculty needs and the hiring process—may fall outside of HR altogether.

As such, university HR organizations are more likely to be seen by their institutions as compliance and administrative functions that are not always ready to support the strategic needs of the major divisions of the university.

Cumbersome and obscure processes

Despite a focus on operations, HR processes can drag on for weeks or even months and can be a source of frustration for university leaders. Organizational transactions, such as a reporting change or hiring a student for the semester, can take weeks or months. Critical activities, such as hiring candidates to support research grants, can also become bogged down by processes. Some of this reflects how people are paid (for example, federal work-study funding for students or research grants) and numerous people processes across various parts of the university (for example, reconciling different approaches to titles and compensation across departments).

Navigating these complexities in a compliant manner can be time-consuming, especially during times of peak demand. Many higher education HR functions also lack up-to-date technology that can support and streamline processes. Moreover, HR’s ability to change policies quickly is often limited, which can leave HR employees feeling powerless, stifle innovation, and erode trust among university leaders.

While some university leaders understand these complexities, others regard HR as a black box that emphasizes process and compliance and focuses too much on doing operational tasks squarely within policy rather than helping to further the university’s mission. HR leaders we’ve spoken to who aspire to be true partners with university leaders are often overworked due to a never-ending set of exceptions and escalations. As such, they are unable to invest the time required to develop proactive talent strategies while also keeping up with day-to-day operational work.

HR leaders who aspire to be true partners with university leaders are often overworked due to a never-ending set of exceptions and escalations.

Insufficient capability building across the university

Universities often source senior HR employees from non-HR roles across the university, such as research administration or academic functions, partially because of increased competition with the private sector for experienced HR talent.

While it is possible for such individuals to succeed in HR, not all receive the training or upskilling necessary for HR-specific work. Individuals coming from these roles are rarely well equipped to take on the strategic HR activities universities need to expand, such as succession planning, developing and supporting long-term career paths, and communicating with the complex web of stakeholders inherent to universities.

And given that university leaders are not trained in HR matters, they may not be able to provide the kind of actionable, informed feedback—that is, feedback on the policy rather than the people or process—that their HR colleagues need. This may compound the existing capability gap.

Initiatives that could help HR advance and support talent strategies

Due to their highly intellectual cultures and dedication to learning, universities are uniquely equipped to address these hurdles with the right investments and commitment to change. The decentralized nature of academic campuses naturally engenders a diversity of perspectives that can be brought together to solve the toughest challenges, including breaking the loop of overwork and building trust and collaborative relationships among HR and critical stakeholders.

The following four initiatives could help get higher education HR on track.

Creating talent goals that are explicitly aligned to the university’s strategy

Too often, HR strategic plans are created by HR and for HR. By conducting interviews with university leadership and gaining explicit alignment with the president, provost, and chief administrative officer (CAO), HR could establish goals for a broad transformation of its mission and capabilities that are aligned with the university’s mission and strategic plan, as well as with the needs of key leaders.

In the private sector, some organizations have elevated the CEO, CFO, and CHRO as the core team to oversee strategy and financing, ensuring they have the capabilities to execute key initiatives.2 This goes beyond having HR leaders actively join and participate in senior leadership discussions. HR becomes central to the initiatives most critical to the organization’s success.

In a university setting, however, we often find that HR leaders are at least two steps removed from a similar partnership, instead reporting to a CAO or provost. As such, they often are not included in core leadership meetings—and are certainly outside the inner circle of presidents, provosts, and CAOs creating and executing an integrated strategic plan.

Once HR and university leaders are aligned on the plan, HR will also need to understand progress against goals and continue to address gaps in perceived skills and performance. For instance, an anonymous survey may demonstrate that the HR function believes talent sourcing is strong (for example, technically strong and low cost), while university leadership sees it as weak (for example, too slow). In this case, HR leaders could have a more explicit conversation about what would need to change to improve processes, such as implementing a better IT system or investing more during peak hiring times.

Building and actively sustaining a pathway for HR professionals

Universities have the opportunity to reimagine the professional journey for HR practitioners from hiring and training to career development.

Hiring. HR job postings more than doubled from February 2020 to January 2022,3 reflecting the high market demand for talent professionals in a tight labor market. While universities may not stand out in terms of compensation in this competitive environment, they may have various other advantages, such as the university’s brand and prestige, the mission of the university, and the location of the job within a vibrant collegiate community. In addition, universities could consider offering flexible employment opportunities to employees who are unable to commit to full-time or fully in-person roles.

Training. Many university HR employees come from non-HR backgrounds, bringing extensive expertise in other areas that are beneficial to HR functions. At the same time, they would likely benefit from training programs in core HR skills to help them succeed in their roles, both as new hires and during role transitions. Specifically, during training and onboarding for entry-level employees and those transitioning in from non-HR roles, universities could teach technical HR skills, such as how to determine compensation.

To be better equipped to resolve conflicts, have difficult conversations with leadership, and solve problems efficiently and effectively, HR leaders could improve communication, problem-solving, customer-service, and stakeholder-management skills. To develop them, HR could undertake communication workshops, role playing, mentorship groups, leadership training, and HR-specific trainings. As a practical example, HR staff should be able to explain processes and rationales for policies that may cause friction; for example, it can be hard to communicate the impact of salary compression in a poorly implemented reorganization. HR should also be empowered to work with campus stakeholders to update or streamline policies or processes as needed to achieve the university’s mission.

University HR employees would likely benefit from training programs in core HR skills to help them succeed in their roles.

Career development. Ideally, leaders can articulate how each employee can advance to senior roles or switch to different HR units that provide growth opportunities throughout their career. Leaders can underwrite these paths by listing the skills required to be successful at each level of seniority of a role. Leaders will likely want to make the model consistent across similar HR roles in all parts of the organization and design from the center.

Well-structured performance management can also play a critical role in development and advancement. Based on a transparent set of performance measures for each role, employees can receive qualitative and quantitative feedback on their performance that is directly tied to incentives, such as financial add-ons and public recognition. In addition, the performance management process is a time for individuals to set goals and receive feedback. This process can chart a clear path to the next level if the employee wishes to advance, and managers can establish regular check-ins to ensure people are making progress toward their goals.

These fundamental elements of defining the competencies of each role and potential career progression—and the associated performance management process—may be well established in many organizations. But we have found that due to the distributed nature of universities, many of these elements are often neither consistently applied nor in place for HR professionals.

Structuring HR so it can respond to changing needs with agility

University HR talent pools often work in silos based on a specific college, department, administration, or other unit. These silos tend to be even more separate in higher education settings than in large corporations. Even if HR professionals in similar roles across the university, such as HR business partners across colleges, communicate with one another, they rarely have an opportunity to load balance across roles as spikes of work arise. A large research grant received in one college or a large reorganization in another can tie up critical resources that make it challenging to take care of other day-to-day activities.

One way to address this is by establishing a group of HR professionals (often in entry-level roles) who can move across the organization to support different operations as work ebbs and flows throughout the academic year. For instance, it may be beneficial to add analysts at the start of each semester to onboard all student hires. Then, after the demand for student-hire onboarding has decreased, these analysts could shift to employee relations. This system could allow high-potential talent to gain exposure to different functions within a university, allowing them to determine what is a good long-term match and also accrue a breadth of experience that could prove useful if they eventually step into a leadership role overseeing multiple functions.

For the long term, leaders may need to consider a new organizational structure that can better meet the needs of the organization. A more agile operating model in which HR employees have flexible roles can help organizations adapt more quickly to change and disruptions such as COVID-19.4An operating model for the next normal: Lessons from agile organizations in the crisis,” McKinsey, June 25, 2020.

Continually investing in HR services and technology

We’ve found that universities often do not continually improve HR processes in a way that allows them to advance and are typically further behind in this regard than large corporations. While focusing on process improvements is important, achieving a step change in performance will likely require a fundamental shift in the HR operating model.

HR leaders and HR business partners may be able to take on more strategic roles within their organizations if they establish a central sub-HR unit, a shared-services center, or support staff dedicated to operational and transactional work. Transitioning activities to a central unit within a university setting presents unique challenges in process design, approvals, and communication due to the complex network of stakeholders involved—and it does not always go well initially.5 However, when implemented effectively, this transition can lead to high satisfaction in the HR function.6 Moreover, by reevaluating their roles, HR employees, especially HR professionals and leaders, can reflect on prioritization and delegation in their daily work, including prioritizing hiring new staff, which can help alleviate long-term capacity issues. At the same time, this can allow leaders to focus on being role models for customer service and partnership, strongly and clearly communicating the strategic role of HR across the university.

That said, HR organizations do not need to take a “big bang” approach to improving technologies and processes. In many cases, HR can deploy small teams on a project-by-project basis to understand, design, and implement critical system customizations or processes that are common pain points for organizations. Sometimes refining or automating a process may be quite simple, such as creating a streamlined intake form with a clean handoff to an existing IT system. In other cases, HR may need to create new processes that handle requests differently—for example, bifurcating requests as low or high complexity depending on the oversight needed. Piloting processes and receiving feedback from users are critical, as is developing clear and effective training materials to ensure that all stakeholders understand the requirements, scope, and benefits of the new process.

As higher education institutions seek to adapt to a very different world, the right people could have an impact on how well universities navigate new challenges and continue to create positive student experiences. HR plays a pivotal role in this, but it faces unique challenges. By harnessing HR professionals’ dedication to learning and growth, universities could invest in transforming HR from a function bogged down in compliance and administration to a nimble, empowered partner that advances the institution’s strategic goals.

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