Institutions of higher education nearly always feel a budgetary crunch, and this holds true for online programs. However, the costs of running a successful online program run far beyond the expected line items of salaries, technology, and marketing. Faculty turnover and attrition can bring a number of serious but unanticipated costs to a program, costs that are may be poorly understood due to a lack of research identifying these costs.
Kristen Betts, assistant professor in the school of education at Drexel University; and Bernadine Sikorski, deputy human resources division leader for Bechtel Systems and Infrastructure, Inc., at Los Alamos National Laboratory, have set out to change this. In a recent paper, “Financial Bottom Line: Estimating the Cost of Faculty/Adjunct Turnover and Attrition for Online Programs,” the pair identify a variety of costs that can result from turnover and attrition of online faculty.
Divided into three categories – direct costs, opportunity costs, and indirect costs – the extensive list of potential line items will help online program administrators understand the potential financial impact of failing to retain qualified, enthusiastic faculty and staff for the program.
Direct Costs of Faculty Turnover
Direct costs, Betts and Sikorski write, are “fixed and variable costs related to hiring, salary/benefits, training, and support.” These are all costs essential for recruitment and retention of employees; the category also includes separation costs for employees that leave. Direct costs include the costs of recruitment, the application process, hiring, orientation and training, professional development and ongoing support, technology support and training, separation costs for the staff member, separation costs related to student attrition, and overtime. These subcategories encompass a wide range of potential costs, such as personnel costs to conduct reference checks, pre-employment drug testing, decreased productivity for the new employee until he or she masters the new position, severance pay, and overtime for faculty to teach courses left uncovered when a faculty member leaves.
Because of the many costs associated with recruiting a new faculty member, getting him or her up to speed, and dealing with separation, it is important to look to retention efforts as a cost-saving move rather than an additional expenditure. “Not everyone can teach online; it really is a different skill set,” says Sikorski. “The care and feeding of adjunct faculty should be looked at right away.”
Opportunity Costs of Faculty Turnover
Even more significant, in Betts’s opinion, are the opportunity costs associated with faculty and staff attrition. Opportunity costs, Sikorski and Betts write, are costs associated with “loss of business and loss of students resulting from diminished resources and/or decreased service quality due to faculty/adjunct turnover/attrition.” This category encompasses costs from loss of business, loss of students, loss of faculty/adjuncts, and loss of reputation.
Loss of students and the consequent loss of reputation is the element that Betts finds most dangerous. “Once you start losing students, you can’t seem to stop it,” she says. “Online students are savvy. They will call and want to speak to students and faculty. If there is any sense that there is attrition [they won’t attend]. You can’t get reputation back,” she says.
These opportunity costs can result in other damage to the program or the university beyond the loss of students and reputation. Faculty and staff attrition, if serious enough, can lead to limitations on course offerings due to lack of staff, a decrease in research and publication coming from the school, decreases in donations, and even loss of accreditation.
Indirect Costs of Faculty Turnover
Indirect costs, which Sikorski and Betts define as costs relating to “productivity, morale, and ultimately the climate of the university,” are the most difficult to quantify, but they still play an important role in understanding the impact attrition has on the bottom line. Examples of this category of costs includes lower staff productivity and burnout from covering for colleagues that have left, inability to secure grants, mistakes made by new hires, and low morale on the part of faculty and students.
“When people see a lack of productivity, it can put your program in a negative space,” says Sikorski. And lack of productivity can also come from missing staff. Betts tells of an example of losing an academic advisor, which negatively impacted the program during the six to eight weeks that it took to recruit a new person, in addition to the time it took to bring the next person up to speed. During this time, new students especially, who require a lot of attention, did not have the resources they needed to help them be successful. “Staff are just as important or more so than faculty because they have daily contact with students,” Betts says.
Excerpted from How Much is Faculty Turnover Costing You?, Distance Education Report, May 15, 2008.