The Costs of Losing Talent & the Case of the Star Researcher
Richard A. Skinner, Senior Consultant
The challenges to American universities are multiple and complex. One stands out: How to compete for talent: talented students, talented professors, talented staff and talented leadership.
Demographic trends are for fewer numbers of high-school graduates in the East and the Midwest. Asked how they propose to deal with these declines, most enrollment managers speak of “poaching” students from other, often adjacent states’ universities. But the managers of those other states’ universities confide that they intend to “poach” on the institutions whose managers are planning to attract students from those other colleges and universities. In the absence of cloning, it remains to be seen how reciprocal poaching will produce more students overall.
By contrast, the West and parts of the South will see more students and, in some cases, large numbers of students. But many will be the first in their families to attend college and may need more institutional help to succeed.
Productive scholars and researchers, especially those in some STEM fields, are recruited not just nationally, but internationally from countries focused on achieving a critical mass of talent in one or two key areas of strategic and economic importance. Expertise in the intersection of biology and engineering, especially at the molecular level and involving genetics, serve as worldwide passports to countries prepared to recruit for their expertise.
Technical staff needed to make the advanced systems and technologies work in universities are also sought by the private sector, but with fewer inhibitions to paying higher salaries and generous bonuses.
And because research-intensive universities are increasingly viewed as catalysts for invention and innovation that spur national growth, their presidents are sought out – again, increasingly on a global basis (Skinner, 2017-18).
Enrollment declines typically mean fewer dollars to operate the complex of facilities and activities that go on in a university, whereas the inability to recruit outstanding professors can mean students benefit less from what they are taught and what they learn from the teacher of lesser renown and fewer insights. Or, the university is unable to secure funds awarded on a competitive basis because the researchers either do not produce proposals for such funds or submit proposals of less quality.
A shortage of technical staff can mean important services that might otherwise improve the efficiency of a university’s operations take longer to bring online or are not considered since the wherewithal needed to implement such improvements does not repose among existing staff.
The effects of the quality of institutional leadership usually take time to be discern and may not be evident until, if the effects are adverse, the opportunity costs – i.e., what was foregone – are apparent. And opportunity costs are important to assess.
The “Virtue” of Opportunity Costs
Definitions of “opportunity costs” abound, but the online Business Dictionary provides a model of simplicity
A benefit, profit, or value of something that must be given up to acquire or achieve something else. Since every resource (land, money, time, etc.) can be put to alternative uses, every action, choice, or decision has an associated opportunity cost (www.businessdictionary.com/definition/opportunity-cost.html).
And as Stanford’s David Henderson notes:
The word “opportunity” in “opportunity cost” is actually redundant. The cost of using something is already the value of the highest-valued alternative use. But as contract lawyers and airplane pilots know, redundancy can be a virtue. In this case, its virtue is to remind us that the cost of using a resource arises from the value of what it could be used for instead.
Examples of opportunity costs in higher education abound in matters as diverse as introducing or reintroducing intercollegiate athletics, reducing faculty teaching “loads” in order to free up more time for the professors to undertake research by hiring more adjunct instructors, or accepting the gift of a contemporary art collection with the donor stipulation that the collection may not be sold, either by piece or as a whole and must be on display at all times.
The value (no pun intended) of opportunity costs stems from its emphasis on choice, on decisions, on the process by which leaders make choices and the degree of risk leaders are willing to take on on behalf of their institutions. And choice and its opportunity costs help to explain one of the more conspicuous developments in higher education in recent years.
Conspicuous Construction in an Age of Scarcity
More than a few observers of American higher education have taken note of the amount of construction of new facilities that has gone on of late and shows little sign of slowing at a time when:
§ as noted earlier, enrollments of traditional students have declined in parts of the country, including areas where there will likely be no upturn in the near future;
§ maintenance of existing facilities has been and is being deferred and creating health and safety issues as well as placing the finances of some institutions in dire straits;
§ technology-based forms of teaching and learning have emerged and are now readily accepted which do not rely on brick-and-mortar buildings;
§ advances in high-speed communications, artificial intelligence and augmented-reality techniques reduce the need for highly-specialized facilities for teaching, learning and research;
§ the number of full-time, tenure-track professors has not increased and is actually declining in some cases such that additional office space may not be required.
Writing in 2017s, Jon Marcus observed:
After years of budget cuts and continuing austerity, universities and colleges collectively face a shortfall of a record $30 billion for what they variously call “deferred maintenance” or “deferred renewal” to deteriorating buildings and other infrastructure, according to an estimate by the national association representing facilities officers.
The problem is compounded by the fact that they nonetheless continue to build more—spending a record $11.5 billion last year—in the hope of attracting students at a time when enrollment is leveling off or falling. That’s further straining maintenance resources and adding billions of dollars of debt for which someone has to pay the interest.
All of this complicates even the most innovative attempts to reduce the price of college. Along with pension liabilities and the bill for health-care they provide for their retired employees, it means colleges and universities face even higher, not lower, costs to do business (Marcus, 2016).
The Difficult Case of the “Star Researcher”
Opportunity costs are relatively easy to tally when a research-intensive university learns that one of its productive scholars has accepted an offer to join another institution or national laboratory. The funding secured for research projects typically follow the principal investigator, so those dollars are departing. The several more junior scholars who accompanied the “star” are also likely to depart and take with them any grants they secured.
The laboratory facilities either constructed or renovated to the researcher’s specifications will probably have to be redone for the successor and her team.
Should the star be active in medical research, she will likely take the drug trials paid for by the pharmaceutical firms. And the patients attracted by that new surgical procedure pioneered by the star are not likely to remain behind.
Then there are the costs of identifying, recruiting and equipping a new researcher to replace the star.
Challenged as to whether such competition is really worth the investment, the leaders of most research-intensive universities will respond unequivocally, “Yes.” And many are quick to ask, “What’s the alternative – the status quo?” For some, withdrawal from attempts to grow and improve an institution is simply out of the question. Besides, seldom do governing boards of universities reward presidents for declining to improve learning, research or service or applaud provosts aspiring to become presidents for eliminating activities or services that invariably raise the hackles of any one or more of the many stakeholders on and off campus.
But the recent appointment of the provost of a well-known research-intensive university provides a useful context within which decisions can be made, especially about recruiting or retaining a star researcher. Asked what attracted her to the post in light of the resource constraints higher education operates in now, the appointee responded that making difficult choices among alternative and sometimes equally-compelling opportunities are what leadership is all about. And that view of leadership, she noted, has always been the case at great universities: there are and always be should be some decisions that have a zero-sum quality, albeit in better times more latitude may be available to make choices a bit less zero-sum.
No doubt, the new provost said, giving everyone some resources, even if the amounts apportioned are modest to the needs or ambitions expressed by those seeking resources, is easier at first glance than making the choice an “all-and-nothing” situation. But excellence, particularly in a time of very limited resources, often compels just such an approach. And that, she noted, is why we have leaders.
But still, losing or gaining a single researcher or a small team of researchers cannot be all that critical to institutions that are large, complex and have roots in the 13th Century. Or can it? Here the often-quoted contention of Margaret Mead, herself a person of singular importance, seems apt: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”
More information may be found at: https://www.harrisandassociates.com/web/index.php
Marcus, Jon (2017) “Why Colleges Are Borrowing Billions,” THE ATLANTIC (October 10) see https://www.theatlantic.com/education/archive/2017/10/why-colleges-are-borrowing-billions/542352/
Skinner, Richard A (forthcoming 2017-18) “Globalizing the Academic President: Competing for Talented Leadership,” INTERNATIONAL HIGHER EDUCATION, Winter.