The Five Major Challenges Impacting Universities in 2023

As we welcome 2023, we find ourselves in a constantly shifting and changing market, especially as the world continues to digitize and automate.  

Over the year and through working with our 296 global educational or university partners spanning 45+ countries, we have gained exposure to the challenges faced by higher education institutions worldwide

As we head into 2023, we are highlighting these challenges, as well as the strategic ways that education providers can tackle them


1. Employers are hiring for skills over a degree

The National Association of Colleges and Employers (NACE) Job Outlook for 2022 reported that fewer employers are looking for GPA and are actively removing degree requirements in hiring processes, looking instead to competencies and skill-based hiring. 

In this case, with employers decreasing their reliance on GPA as a signaling factor in hiring, they are moving their focus to skills and work experience. In the short term, to ensure that higher education keeps high alumni employment statistics, they will need to infuse their degrees with the skills and competencies employers are looking for.

A degree has value because it is a strong signaler of a student’s capabilities. So if employers continue to look for other signals, could this further diminish the value of a degree?

Considerations for your university: 

Certificates or real-world work experience will continue to have increased recognition and prominence in hiring decisions. 


2. Students are questioning the ROI of a Degree

2022 saw a shift in how students approach higher education, with many confirming that the money and time invested should lead to feeling and being career-ready

While higher education is still generally the best pathway to higher-paying careers, with lifetime earnings 84% higher for university graduates than for those whose highest degree is a high school diploma, there’s no denying that alternative skills pathways such as stackable credentials have increased in value

With lower birthrates of the 2000s already making the traditional incoming student more scarce, we know that the smaller population is questioning if the high cost of a degree is worth it

Undoubtedly, degrees carry a significant ROI, but the rise of alternative pathways to reach that ROI is occurring. Knowing that, universities will be pressed to show their ROI to incentivize enrollment and engagement to increase their competitive edge – which will have them turning to more industry buy-in, connections, and career services.

Considerations for your university: 

It’s well documented that students see more value in their degree when they directly tie employability skills and experiences to their time. 

  • How can you directly address the diminished perceived value of the university degree in the face of decreasing population and rising alternative pathways through additional tie-ins to industry and employment?


3. Curriculum cannot keep up with technology

Skills gaps between university curriculums and the workplace have become a point of contention for many companies over the past year, with nearly 90% of companies noting that they currently exist or expect them to exist over the next few years. 

Creating a high-quality, well-thought-out curriculum is hard, which is why it takes time. But this now directly conflicts with the rapidly changing nature of the future of work due to technology

With 46% of workers younger than 30 reporting that they don’t have the skills and education necessary to get ahead at work, and only 48% of UK employers believing that students leave education with insufficient digital skills, it’s more important than ever that higher education is equipping students with in-demand skills such as digital and technical skills, to help them get ahead in their careers. 

This is made more apparent by the fact that digital skills, once acquired, have a very real shelf-life. Nearly half of students surveyed (48%) in the Salesforce Connected Student Report 2022 believed their academic coursework would only be relevant for five years, indicating a need for lifelong learning to meet the changing needs of industry and an opportunity for universities to stay connected with alumni.

Considerations for your university: 

  • To best meet the needs and expectations of the job market, how does your university plan to systematically address the skills gap within the market?
  • How can you infuse employer-led education, such as internships, into your curriculum?
  • How can universities create a more agile curriculum that provides a strong foundation with moving pieces to be readily infused with continuously changing new external industry knowledge and skills?
  • How can you build innovative and new certification pathways for alumni re-engagement and training to meet the new needs of the lifelong learner?


4. The rise of online education

With fewer students to fill the same amount of universities and with technology changing fast, competing universities are scrambling to keep up. Post-pandemic, it is clear that Covid-19 wasn’t only an accelerant for remote work but also remote education. Online higher education programs previously catering to busy working adults, such as WGU and SNHU, have seen a rise in traditional student enrollment. 

Before the pandemic, Southern New Hampshire enrolled approximately 33,750 online students under 24 years old. Today, that population has grown to approximately 43,750 students. The extra 10,000 students could, on their own, populate a traditional mid-size university or several small liberal arts colleges.

At Western Governors, traditional-aged student enrollments have more than doubled – from approximately 6,000 students in 2017 to 15,000 students in 2022. Like Southern New Hampshire, Western Governors’ young, fully online student population rivals that of a traditional, mid-size university or several community college campuses.

Today, 70% of university students give online and hybrid learning a thumbs-up. 

This means more universities must review the technology they use to stay in the lead and create pathways for in-person, hybrid, and remote learners. 

The rise of online education outside of traditional degree-granting institutions continues to open up global programs. Students can now access a Computer Science undergraduate degree on Coursera for less than $5,000 from a reputable Indian university – which also means competition between education providers has now extended from regional to global, making it even more important to maintain a competitive edge.

Considerations for your university: 

  • How can you lean into more flexible learning and introduce stackable credentials and certification programs to access a new population to enroll?
  • With increasing reliance and demand for online or hybrid programming, how is your institution leading in best practices and technology for online teaching, infusing new tools, programs, and opportunities into your traditional curriculum?


5. Students value a higher education that can provide career outcomes

When choosing a university, students increasingly review their employability impact during and post-program. This is pushing career services and connections to employers to the forefront.

A survey by Public Agenda this year found that only half of Americans think the economic benefits of a university education outweigh the costs. In addition, the Chronicle of Higher Education reported that the majority of Americans and 8/10 first-year students think that the primary goal of higher education should be career-readiness and providing a well-rounded education. 

It’s become clear that while it was always a factor in the decision-making process, employability is now one of the top factors students use to decide on a university

Students are also showing a desire for career guidance as part of their lifelong learning curriculum. They are seeking degree providers who can become a reliable source of training and guidance through their alumni years. 

Fully aware of the diminishing half-life of skills, students know that reskilling and upskilling will no doubt occur many times in their lifetime. They are increasingly pragmatic in choosing their degree, and universities can be better informed with labor market forecasting and data to prepare students for making pathway decisions based on facts

Components in this decision-making process now weigh heavily on:

  • Fully developed career services departments
  • Career-readiness integration, 
  • Pathways to career placement, 
  • Guaranteed employment.

With only 14% of students feeling that they have received “good service” from their school’s career center (2022, College Pulse), it’s time to evaluate what more can be done to ensure universities are putting their best foot forward to offer students what they are looking for from their higher education journey.

Considerations for your university: 

  • In what ways are you currently providing opportunities that meet students’ number one value: career readiness? 
  • What ideas do you have to innovate the curriculum to supplement the lack of career-readiness students are reporting?
  • Have you considered how integrating experiential learning into your curriculum can increase your students’ career management understanding and advocacy while preparing them to understand better what employers are looking for?


How Can Universities Strategically Address These Challenges?

It’s not all doom and gloom. While there are challenges ahead, and both student expectations and higher education realities are evolving rapidly, there are several innovative ways colleges/universities can address these challenges.

Higher education institutions can combat these challenges by leveraging in-house innovation and partnering with those directly tied to the industry to provide solutions focusing on career readiness, student retention, and increasing the overall value for their students. 

Read: How Universities Can Strategically Address the Challenges of 2023 

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