Navigating the New Reality for US Universities

This year’s NACUBO Annual Meeting felt pivotal, confirming what many in the sector already recognize: financial pressures are intensifying, the pace of change is accelerating, and the decisions taken in the next few years can fundamentally reshape institutions. Revenue pressures are deep and structural with declining enrollments, uncertain government funding, and the recent changes to indirect costs of research. This reality puts added pressure on operational costs which are already challenged with escalating labor costs (5.9% in 2024 for administrative and clerical staff), growing student expectations, and a deferred maintenance backlog surpassing $112 billion. 

At the same time, opportunities exist in the promise of evolving technologies (AI is shifting how universities operate, teach, and do research), and the fact that a degree remains one of the most reliable routes to economic prosperity. Universities also continue to be the leading source of research, thinking, and talent to address modern problems – climate change, income inequality, and aging populations to name a few.

Institutions across English-speaking countries like the UK, Canada and Australia also face rising costs and shrinking revenues, but are finding ways to solve these challenges. Over the last 15 years, the UniForum program has brought together senior executives from across the best universities in the world to collectively enhance the efficiency and effectiveness of their institutions. This experience highlights that thriving universities are those ready to reaffirm their mission, invest strategically, and embed operational discipline. This starts with confronting the headwinds directly and then acting with intent. 

Long-term sustainability depends on deliberate decisions: where to invest for growth, what to scale back or stop, and how to reallocate resources to align with mission and strategy. Before universities can start the hard work of reallocating resources they must understand the reality of their service and financial performance, and how their underlying processes, technology, and roles are enabling the university strategy. A truly refined understanding of these aspects includes:

• How are the services and processes designed at my institution? Are they designed for the institution as a whole or are they a patchwork developed over time to suit individual units?
• Are services effective in supporting staff, academics, and learners in their university experience?
• Are these services being delivered at a cost acceptable to the institution and in line with the sector?
• Where are services underinvested and where might they be gold plated?
• Do resource allocation and staff roles enable the effectiveness of end-to-end service delivery?

For large, decentralized institutions, understanding the current state of service delivery is complicated by gaps in visibility - limited data on how work is done and towards which activities, and the true cost of delivering services. Without that insight, decisions are based on partial information at best or anecdotes and outdated assumptions at worst. 

The UniForum program helps institutions understand themselves, make informed choices, and then measure their progress against sector data on university operations.

Involve the entire campus: Universities operate and govern as communities. Any attempt at change must take this reality into account. That’s why UniForum engages stakeholders from across campus in data collection and input, building campus and departmental buy-in from the start.

Locally driven engagement starts the process of creating a buy-in to change from the start, rather than trying to convince stakeholders once all decisions have been made. This approach also enhances the accuracy of data, as those closest to delivering the work know it best. 

Start with a comprehensive baseline of all activity: Data needs to take into account all the activities performed across the institution. Broad operational insight is essential. Without consistent, cross-unit data, inefficiencies remain hidden and reallocations become guesswork. Internal comparisons can entrench underperformance, while external benchmark data reveals what is both achievable and aspirational.

UniForum experience in North American universities shows that for many functions considered “central” or “corporate” such as Finance or HR, only 20-25% of the capacity delivering the work sits in central functions. This means central units, Dean’s offices and individual academic departments all need to work together for meaningful change.

Understand which functions can be streamlined, and which need investment: Comparing staffing, service models, and costs to similar institutions using a normalization method that accounts for teaching scale and research intensity unambiguously identifies areas that are over-resourced or underperforming.

This method allows the university community to quickly come together to understand how resources might be re-allocated. For example, are investments in areas like student support and support for researchers keeping up with the sector and with changes in the university’s own student and research profile? 

Unpacking the drivers that matter: UniForum’s reporting suite and advisory support help leaders unpack the factors influencing both the cost and quality of delivery. Because cost and capacity data are collected at the record level, leaders can assess which levers will have the biggest impact. These can include role design, service location, employment type, or staff seniority.

Considering both the effectiveness and efficiency of a service is key. UniForum data shows that there is little correlation between these two measures. This means that universities have a choice on how they can design services to achieve both. 

Accelerate and de-risk change through collaboration: Bringing together change-oriented leaders from across institutions to share strategies, success stories, and lessons learned. These conversations are grounded in the common language of UniForum data so that universities can spend less time translating and more time strategizing for change.  

Being informed directly from the successes and failures of peers helps de-risk change, and when data is shared transparently, it builds trust, shifting discussions from ideology to evidence. This clarity empowers decision-making with greater speed and confidence.

The UniForum approach to change combines robust data, collaboration between like-minded sector leaders, and a library of case studies from institutions that have already navigated challenging transitions. Over the past 15 years, it has shown that universities making the necessary trade-offs and focusing on their core mission deliver the greatest impact for learners, researchers, and communities.

Learn more about how UniForum data can benefit your institution.