The Essential Guide to Cost Containment Strategies for Higher Education

This resource center will be free to access for the month of April to highlight EAB’s cost containment research. Check out Strategic Advisory Services to learn more about how we work with higher ed strategy leaders to solve their toughest challenges.

As institutions face tightening budgets and uncertainty about future revenues, campus leaders are seeking opportunities to mitigate unnecessary costs and increase financial efficiency across every part of the enterprise: talent, administrative workflows and organizational structure, academic affairs, technology, and facilities.

In this resource center, we’ve catalogued near-term and long-term tactics for cost containment across five functional areas of colleges and universities:

• Labor Cost Containment
• Workflow and Org Design Cost Containment
• Academic Affairs Cost Containment
• Technology and IT Services Cost Containment
• Facilities and Auxiliaries Cost Containment

Labor Cost Containment

Labor comprises 60-70% of most institutions’ operating budgets, so it’s a likely target for cost containment initiatives. That said, to sustain long-term labor savings, leaders must slow labor cost growth over time—or “bend the labor cost curve.” Our resources help leaders strategically plan for labor savings across both the short- and long-term.

Labor Resources

• Administrative Cost Containment Playbook: Originally created for responding to challenges stemming from COVID-19, this playbook has 60 tactics—evaluated by savings potential, time to achieve savings, and need for union negotiation—to immediately contain admin labor costs.
• Understand three vital steps to slow labor cost growth: Understand the current state of higher education labor spending and learn how to implement the necessary cross-silo tools and incentives to achieve meaningful savings.
• Creating cost-effective labor alternatives to support local leaders: Pursue cost-effective alternatives to full-time hires, including central, cross-silo staffing that unit leaders can tap into when needed.
• Leverage position control to prioritize resources: Leverage position control to assess positions as they become vacant, reclaim staffing dollars when appropriate, and redeploy staffing lines to other units with greater needs.
• Incentivize local leaders to find sustainable labor savings: Incentivize unit leaders, who best understand existing processes and inefficiencies, to find sustainable labor savings within their individual units.

Workflow and Org Design Cost Containment

Every institution has opportunities to redesign processes and organizational models to improve efficiencies and service quality. Our resources help leaders and staff identify the greatest opportunities for improvement on their campus, prioritize them, and execute—to the tune of significant cost savings. They also help leaders get buy-in for change with even the most resistant staff.

Process Improvement Resources

• Design Better Workflows with Five Process Improvement Steps: Follow these five jargon-free steps for every exercise to improve processes and design better workflows.
• Process Improvement Primer: Explore case studies of commonly broken processes across six functional areas to boost buy-in for process improvement initiatives on your campus
• Boost Process Improvement Success by Starting on the Right Projects: Use this roadmap to leverage customer input in process improvements, prioritize projects, and assemble the right team to lead these efforts.
• 4 building blocks of continuous improvement culture: Learn about four strategies to transition from one-off process improvement projects to a more widespread culture of continuous improvement.

Shared Services Resources

• Shared Services Primer: Take our shared services readiness diagnostic to evaluate urgency and guide senior-level conversations about campus readiness to adopt shared services models.
• Design a Shared Services Model That Reflects Campus Priorities: Use our roadmap to design a shared services model that strikes a balance between efficiency of process standardization and responsiveness to units’ service expectations.
• Ease the Transition to Shared Services with a Plan for Change Management Hurdles: Use our roadmap to ease the transition to shared services with a plan for change management hurdles.
• Compendium of Shared Services Profiles: Use our Compendium of Shared Services Profiles to understand how peer institutions structure and fund their shared services models.

Organizational Design Resources

• Advancement Organizational Design Review: EAB will audit your advancement shop’s organizational design against best practices and provide expert recommendations for improvement.
• Facilities Organizational Chart Assessment and Evaluation: Participate in EAB’s higher ed Facilities Organizational Chart Assessment and Evaluation to audit your unit’s current structure and compare it with peer institutions.
• Efficiency and Effectiveness Initiatives: Review key lessons from post-Great Recession efficiency audits to identify successes to emulate and mistakes to avoid, and get guidance on where the majority of potential savings lie.

Interinstitutional Partnerships and M&A

• Compendium of Interinstitutional Partnerships: Explore 50+ examples of higher ed institutions partnering with peers to share costs and grow revenue.
• Addressing Persistent and Emerging Campus Risks: Understand the challenge of risk management, access plans for rapid-response situations, and review implementation guidance for foundational enterprise risk capabilities.

Academic Affairs Cost Containment

Faculty and staff often correlate a reduction in academic costs with a reduction in quality. In reality, institutions can realize savings and promote excellence by reallocating existing resources to high-impact, mission-aligned activities. The resources below highlight both immediate savings opportunities from increased instructional efficiency and longer-term opportunities to increase instructional productivity and rightsize the academic portfolio.

Academic Affairs Resources

• Breaking the Cost-Quality Tradeoff: Review the five primary drivers of academic costs and capacity and identify the greatest opportunities to realign academic resources while maintaining or enhancing quality.
  Read the Study
• 10 “No-Regrets” Analyses Infographic: Run these 10 “no-regrets” analyses to isolate the key drivers of academic costs, pinpoint opportunities for savings, and allow department leaders to better meet future student demand.
• Align Workloads and Schedules with Student Demand: Follow this roadmap to align faculty workloads and course schedules with student demand—and generate more student credit hours without adding part-time instructional staff.
• 38 Approaches to Maximizing Instructional Productivity Infographic: Review 38 approaches to maximize instructional productivity on your campus, organized around four major goals for instructional productivity efforts.
• Academic Vital Signs: Require that every academic department monitor these three cost-efficiency metrics to optimize academic resources and minimize costs.
• Implement Gainsharing Agreements in Your Academic and Administrative Units: Implement gainsharing agreements to incentivize more prudent management of unit budget dollars.
• Rightsizing the Program Portfolio: Use our rightsizing the program portfolio toolkit to see four imperatives to lay the groundwork for principled academic program review and discontinuance processes.
• The Multidisciplinary Reorganization Toolkit: Consider whether an academic reorganization can advance your institution’s teaching and research goals while also reducing overhead costs.
• The Instructional Capacity Playbook: Use this playbook for practices to realign resources to meet changing enrollment patterns.
• Enfranchising Faculty in the New Budget Reality: Discover four key lessons to help you give faculty firsthand exposure to institutional financial planning and resource management.

Technology and IT Services Cost Containment

Our resources help IT leaders prioritize new projects, optimize purchases, both centrally and locally, and creatively use student labor to respond to workload surges.

IT Resources

• Project Prioritization Frameworks That Work: Use our project management prioritization frameworks to eliminate unnecessary projects and ensure IT resources are devoted to projects that best align with your institution’s strategic goals.
• Mastering the IT Project Pipeline: Use this resource to gain control over chaotic project backlogs, develop a standardized project request process, cost-effectively filter project requests for further development, and shape customer project demand.
• Supporting Frontline IT Purchasing in the Cloud Era: Review best practices in supporting frontline IT purchasing to avoid duplicate licenses and ensure investments meet technical and security standards.
• Fostering the Next Generation of IT Talent: Review seven tactics to help your institution build a productive student workforce.
• Data-Driven Approaches to Sunsetting Technology: Discover how to leverage data and principled tactics to mitigate risks, eliminate legacy and redundant technologies, and recoup valuable IT costs and resources.
• IT Vendor Assessment Resource Center: Explore industry best questions and templates to collect information for complete and accurate vendor product assessment when selecting a new higher ed IT vendor.

Facilities and Auxiliaries Cost Containment

Move the needle on evergreen challenges like reducing deferred maintenance backlogs, decreasing energy consumption, optimizing space utilization, and maximizing the value (and savings potential) of outsourcing and public-private partnerships.

Space Utilization Resources

• Working with Academic Leaders to Maximize Space Utilization: Implement best practices in working with academic leaders to maximize space utilization and inflect behavior change.
• Taking Space Offline: Learn how Bowling Green State University effectively aligned classroom inventory with curriculum needs to streamline deferred maintenance and reduce campus size.
• Campus 2030: Envisioning Tomorrow’s Multi-Modal Campus: Our infographic shares how seven campus spaces will change over the next decade due to trends in student expectations, hybrid work, and more.

Capital Projects and Deferred Maintenance Resources

• Compendium of Design and Construction Tactics to Minimize Total Cost of Ownership: Review our compendium of design and construction tactics to minimize total cost of ownership.
• Capital Renewal Funding Playbook: Evaluate 10 executive-level lessons and 100 strategies for funding capital renewal to reduce your deferred maintenance backlog and enhance the capital planning process.
• Capital Project Planning Toolkit: Use this tool to quickly generate more accurate capital project cost estimates to help evaluate different options, or as a model for developing a campus-specific construction cost calculator.
• Enhance Your Capital Planning Process: Learn how to improve transparency in capital project prioritization to ensure investment in projects that best support broader institutional priorities.
• Shift the Balance from Reactive to Preventative Maintenance: Implement best practices to eliminate common timesinks and reprioritize critical preventive maintenance tasks.
• Improve Preventative Maintenance Performance: Follow this roadmap for strategies on how to reduce the deferred maintenance backlog and invest in and expand preventative maintenance programs.

Partnerships Resources

• Optimizing Your Facilities Outsourcing Arrangement Roadmap: See our four-step process for developing more effective outsourcing arrangements to help reduce costs and increase levels of service.
• Navigating Public-Private Partnerships: Review 10 imperatives to effectively evaluate, plan, and implement successful public-private partnerships, as well as case studies of universities’ P3 projects.

Talent Resources

• Launching In-House Talent Development Programs in Facilities Management: Use this step-by-step guide to reduce maintenance recruitment costs over time and increase staff productivity.
• EAB’s Flexible Work Collaborative for Hybrid and Remote Employees: Join EAB’s series of guided workshops to understand the principles behind an effective flexible work policy and develop your own policy to implement on campus.

Sustainability Resources

• Energy Reduction Strategies: Pursue proven energy- and cost-saving strategies through the following levers: commissioning, recommissioning, retrofits, and continuous commissioning.
• Compendium of Sustainability Initiatives in Higher Education: Explore 100 sustainability tactics, complete with prioritization guidance and higher ed case studies.
• Campus Sustainability Plan Review: Receive a custom report that identified opportunities for improving your institution’s environmental sustainability plan.
• Supporting Sustainability Initiatives Through Corporate Partnerships: Gain insights on how to fund campus sustainability initiatives through corporate partnerships.