The Great Tertiary Reset

For nearly two decades Australia’s university sector has grown significantly by attracting overseas students - so successfully in fact that it is our third greatest export valued at nearly $34 billion annually.

But the sector has been hit hard by COVID-19. Research by the University of Melbourne’s Centre for the Study of Higher Education found that Australia’s public universities have lost $3.8 billion in revenue this year. That has led to the loss of 5,600 full time equivalent jobs and an estimated 17,500 researcher and casual positions are also predicted to be lost. To put that into perspective, that equates to 9.5 per cent of Australia’s entire higher education workforce.

Nearly one in every four students (24.3%) at Australian universities are from overseas but for some universities the figure is much higher, for example, 34.3% of Monash University’s 64,479 students are from overseas. Those international students that have studied at our universities have made a major contribution to the multicultural country we have become. Many have stayed and made their life here. Many have also gone back to their homeland and have become ambassadors for Australia. 

The Transformation Imperative

All of Australia’s universities will be examining their business models. The influx of international money has dried up virtually overnight. There are estimates that $12 billion will be wiped off university incomes over the next two years solely through the significant decrease of Chinese students. According to Australian Government data, Chinese students make up the highest number of international students (not just those going to university) at 27% followed by India at 17%.

Charles Sturt University Acting Vice-Chancellor John Germov said the University had not been as badly affected as many others. “The problem is that sector funding has been in constant flux with ongoing regulatory change, which has led to an over-reliance on fees from international students. And a lot of that money has gone into research as well as underlying operations,” he said.

“Our plan moving forward is not to be reliant on international revenue for our ongoing sustainability. We will cover our operations by refining our operating model."

“One of the main concerns we see for the sector is how research will be funded in the longer-term.  Several Vice-Chancellors have met to look at the funding structures of universities. There could be a significant shake up on the way research is funded and what is actually researched.”

The Federal Budget handed down on October 6 addresses this issue somewhat with $1 billion provided “to safeguard Australia’s research sector against the impacts of the pandemic”. However, this extends only for 2021, with less clarity beyond next year.

The budget also included $252 million for 50,000 places in higher education short courses in IT, science, health, agriculture and teaching. 

An additional complication for the sector is adjusting to the Federal Government’s Job Ready Graduates package  which was passed by the Senate on October 8.

The reform package includes a major restructuring of university funding by hiking up fees for some courses, including an increase of 113% for humanities, in order to pay for cuts to STEM, nursing and teaching courses. The government says the changes will fund an extra 100,000 university places for domestic students by 2030, while cheaper fees in certain fields will deliver more graduates in areas of expected job growth. Universities Australia says the reforms will see total funding for each student decrease by an average of 6%. 

Less funding means that the sector needs to look closely at efficiencies across the board, particularly the workforce.  “As a sector, we are going to have to address productivity and the issue of quality work outcomes,” says Professor Germov. 

Of the 200,000 university staff, an estimated 80,000 are casuals. The rate of casualisation is expected to increase as universities scramble to stabilise their revenues as they redesign their business models. Professor Germov said he expected to see a greater diversification of academic appointments with some industry professor roles being a blend of academic and professional experience.

“I also think there will be more pressure to expand teaching-only roles."

“We will start to see more refinement and sophistication and attention to a performance driven culture, performance management and workforce planning."

“This is about trying to get universities to develop a system of workforce planning. I don’t think we do that particularly well as a sector. There are a lot of good examples in the private sector that universities could learn from.”

Education’s Digital Future

“Understanding the workforce of the future is a constantly changing cycle of improvement. This is where we need to address workforce culture. We need a more fluid and dynamic approach to our workforce and understanding what the expectations are,” Professor  Germov said.

“The initial worry with working remotely was that productivity would drop. However, this was not the case but rather exposed new opportunities to cater for a diverse workforce."

“That also means universities will need to innovate and move some courses that were face-to-face to online – and stay online for the foreseeable future."

“At Charles Sturt we were fortunate as we have long been a leading university for online course work. We already had a large constituency online which meant we had the infrastructure and expertise to transfer all courses to online delivery."

“We are also reviewing our assessment practices as an  outcome of the move to fully online. This has led to fewer exams, and those that do require exams can now be done quite efficiently. In the future the vast majority of our exams may continue to be offered online.”

Leading Educator

Now more than ever we need to equip our leaders with the skills to navigate through this crisis. Leadership is about developing and enabling talent that is aligned with the strategy and purpose of the organisation.  We have seen demands on our leaders increase rapidly over recent years and the current COVID crisis has created additional demands and incredibly challenging environments in which to lead. 

“Effective communication from leaders has never been more important. With the majority of staff working from home, individuals are not physically seeing each other (Zoom doesn’t count) and not having those incidental conversations you may have in the tea room or literally at the water cooler,“ Professor Germov said.

Leaders need to effectively communicate with their workforce and that means  finding a number of ways to communicate and engage with their people. This could be through team huddles, one-on-one video calls, town halls as examples.  The key element is for leaders to demonstrate empathy, to listen to any concerns or challenges and to provide ongoing support and coaching so that there is a sense of optimism for the future or a focus on what is within our span of control.

“It’s about having a great team with an understanding of the institution's purpose, their individual alignment to that purpose, and providing access to information" Professor Germov said. 

“It is important to convey the message that we are sustainable and want to bring our staff along for the journey as they understand there will be the need for some changes.” 

“For some it might mean additional professional development. Even though a university’s bread and butter is to provide required skills and capabilities to its students, it often does not look inwards to its staff. Yes professional development takes place but it is then linking that to the needs of the organisation, the capacity of the workforce and the currency of the workforce.”

“Look at the rapid changes in technology – how do we keep ensuring that our staff remain current in their skill set,” Professor Germov said.

The Ripple Effect 

Whilst staff directly employed by universities are under threat we must also consider the considerable flow-on effects. Student accommodation is virtually empty and with students away most food and retail outlets have no revenue.  The student experience has being impacted for those who preferred to complete their studies on campus, including the lack of social connections with their fellow students.  

Universities will now be looking at having less reliance on students from China and India and look to diversify by attracting students from other countries.

Professor Germov said he believes Charles Sturt will take two or three years to get anywhere near they were before the pandemic struck. “Will we ever get to those heady heights again? We think so. Universities will need to adapt their operating model – not just us – as I think most university councils will insist on one that does not expose the university as the international student shortage has done.”

About Professor Germov

John Germov is a Professor of Sociology and Acting Vice-Chancellor at Charles Sturt University, Australia. He was Pro Vice-Chancellor (Academic) and Pro Vice-Chancellor of the Faculty of Education and Arts at the University of Newcastle, Australia.

John is a sociologist with expertise in mixed methods social research, specialising in the social determinants of health (notably the social origins of food and alcohol habits), public health nutrition policy, interdisciplinary wine studies, and the history of sociology.

John also holds a Doctor of Letters honoris causa and a PhD in Sociology from the University of Newcastle. John's academic leadership has specialised in workforce transformation, performance management, gender equity and leadership development. In 2016 he was a recipient of an AHEIA award for Excellence in People and Culture.