My interview with University Business Magazine
What have been the most significant developments in the UK university sector in 2013?The most significant development in the sector has been the focus on recruitment with a trend towards aggressive recruitment strategies designed to protect and grow fee income.
The impact of higher fees, student number controls and the deregulation of AAB student numbers for 2012 entry took some in the sector by surprise. There were 14% less UK and EU accepted applicants and against predictions of 85,000 AAB graded and above students, there were eventually 79,200. This hit the Russell Group hardest with undergraduate numbers dropping at a third of its member institutions at a forecasted cost of £80m. The loss of the income to the sector from the 54,000 less students was estimated at £1.3bn over three years.
Universities hit hardest in 2012 were determined not to be complacent in future recruitment activities. The University of Birmingham, estimated to have fallen short by about 700 undergraduate students in 2012, became the first university in the sector to offer 1,000 unconditional places based on predicted straight A grades. It now plans to extend the pilot in 2014 after attracting 300 high achievers. It is almost certain that other universities – including us – will follow suit.
At Birmingham City University, we similarly have begun to pay increasingly close attention to our ‘offer strategy’. In one Faculty, during 2013, a system was piloted by Admissions and senior Faculty management whereby all rejected applicants were reviewed prior to a final decision being made. While labour intensive, this approach meant the Faculty subsequently had the highest conversion rates and went into Clearing with the smallest gap in numbers. For 2014 entry, this review process is being extended across all Faculties. Early decisions over the points to accept in confirmation and Clearing also meant BCU gained an additional 1,410 students (up 9% on the previous year), recruiting to the maximum 103% SNC.
Will the student experience continue to be a major focus in 2014?Recruitment will be the number one priority, but closely followed by student experience. We have all witnessed the anticipated rise in consumerist attitudes as a result of higher fees. Complaints by students in England and Wales against universities rose by a quarter in 2012 to 2,012 – the highest since the Office of the Independent Adjudicator was set up in 2004.
There will be an increasing focus on institutional policy and practice, specifically in relation to quality assurance. No university wants to hit the headlines in the way that London Metropolitan did when its UKBA Highly Trusted Status was revoked in 2012. Derby University has become the most recent victim of adverse publicity following accusations in October of falsifying data on graduate employment rates by allegedly withholding or misreporting survey returns.
At Birmingham City University, we have launched an institution-wide strategy – Partners for Success – which builds on our sector-leading positioning for student engagement and our focus on graduate employability. Comprehensive in its approach, this strategy includes among others positive actions to improve communications with new entrants and current students, early identification of ‘at risk’ students, expansion of personal tutor support and the embedding of entrepreneurship support and work experience into all course programmes. By 2015, we want to be employing 3,000 students across the University – triple current numbers – via OpportUNIty, our ‘Jobs on Campus’ initiative launched in 2012.
Over the past three years the University’s ‘THE Outstanding Support for Students’ award-winning Student Academic Partners scheme – which partners students with academics to review aspects of the student experience – has delivered over 160 projects, employed over 400 students and dramatically improved the learning experience across the University in wide variety of areas. Following a successful pilot in 2012, we launched the Student Academic Mentoring Partnerships initiative in 2012/13, enabling students to take advantage of peer-to-peer support from more experienced students, under the guidance of academic staff.
Will competition to attract the best students remain fierce?Universities have always competed to attract the best students using reputation and financial incentives, such as merit-based scholarships and bursaries. The cap on home undergraduate SNC numbers and deregulation of AAB, ABB and, for 2014, ABB or equivalent has, however, forced the issue further. High achieving students offer the biggest potential for growth for all universities, but for those universities for whom over 80% of their student numbers sit outside the SNC, the ‘best students’ are essential to maintaining their bread and butter fee income.
Russell Group universities in particular cannot afford to see these numbers reducing, which is primarily why the University of Birmingham adopted its unconditional offer strategy. Leeds (which lost out on 500 students in 2012), Newcastle and Sheffield offered scholarships to bright candidates in certain courses.On its website, the University of Manchester says that “more than a third of students will receive bursaries of up to £3,000 per year and many will be offered even more generous support”.
It is not just the elite universities who are getting in on the act though, financial aid up to £10,000 was offered at Aston, Bournemouth, Brunel, City University London, Coventry, De Montfort, Edge Hill, Essex, Gloucestershire, Kent, Leicester, Newcastle, Newman University College, Northumbria, Roehampton, the Royal Agricultural College, Salford, Surrey and Wolverhampton. The University of Bedfordshire offered students with ABB grades £3,000 a year and one Vice-Chancellor’s Scholarship (waiving all fees, worth £27,000) for each academic faculty.
At Birmingham City University, we offer support through the National Scholarship programme, but have shied away in recent years from what the press terms ‘cash bribes’. This strategy is being reviewed, but we are seeking to offer travel incentives for applicants for 2014 entry, as well as launching a programme of regular weekly visit opportunities. We know that if we can attract prospective students on campus, we have almost a 50% conversion rate. Travel costs and visit timings are the biggest barriers to visit day attendance.
Will 2014 present new challenges in the higher education sector?The biggest challenge for the sector will be to try to reverse the negative impressions overseas of a ‘closed UK’ due to the Government’s policy on immigration; the pressures on the home market mean that all universities will be seeking to maintain and most likely grow international numbers, as we are at Birmingham City University. There will be a concerted effort by universities to expand international partnerships to strengthen feeder pipelines, rather than the traditional recruitment fair/agent-led approach.
At an institutional level, the focus will be re-thinking the desired size and shape of universities. Almost all corporate strategies five to 10 years ago were optimistically seeking extensive growth in student numbers, but the reality has been very different. The portfolio of programmes will rationalise or expand, depending on individual circumstances, including competitive strength and demand. Informed decision-making through professional market intelligence will be critical. We should expect to see more rigorous new product development testing. Universities will make use of the large ‘pool’ of test subjects offered not only through universities own student population and enquiry databases, but also from the many commercial platforms, such as Youthsight or the Student Room.
The time for complacency in marketing is well and truly over. All universities need to wise up to the competitive environment in which we operate and commit the level of resource – both human and financial – required to succeed. To my mind, the biggest cultural shift needs to take place in the office of the Director of Finance. Traditional UK university marketing budgets estimated to be between 0.75-1.5% of their revenue simply won’t cut it when you consider that some for-profit US Colleges spend 20% and more. We need to shift from viewing Marketing as a ‘cost’ to recognising it as an ‘investment’, which is directly linked to and brings an enormous return.
Taking Birmingham City University as an example, academic fees and education contracts accounted for £93m of BCU’s £162m income in 2011/12 and the home full-time undergraduate market represents 63% of all students. In 2012/13, we spent around £800K on our positioning campaigns to drive traffic to Open Days and Clearing. The 2013 Clearing campaign – which included television, outdoor, online, press and radio advertising – cost in the region of £400K, but this generated 1,410 additional students. At an average fee of £7,500 that equates to £10.5m fee income in the first year and £32m over three years of a degree student; not a bad return on investment.