Compensation Benchmarking

Compensation Benchmarking

For decades, institutions and universities have focused on growth and quality improvements and have passed on incremental costs via government subsidies and tuition increases. Today, macro forces such as revenue pressure, cost pressure and new technologies are at an all-time high. EduShine believes these factors are the impetus for disruption in the industry. We are entering an era that will require more informed and expert decision making higher education consultants. In higher education related areas, unfortunately the underlying data, especially benchmarking performance information, do not exist to support such strategic thinking and change. And, that makes the education industry highly unstructured and vulnerable in nature.

Indian Context

Indian higher education is operating at more than 30 % shortage of faculties. Even with such acute shortage of faculties, by and large. Most of the higher education Indian Institutions are not paying salaries as per the seventh pay commission recommendations. And on the other side, we have premier institutions offering 2 times of seventh pay commission salaries to their faculties. In such a scenario, not just faculty recruitment but faculty retention is a big challenge for most of the institutions. If you look at non-teaching roles, there is no formal salary structure at all. Without a competitive salary structure, organisations struggle to attract and retain quality talent. In such an unstructured sector like higher education, it is of utmost importance to compare your organisation’s salaries against your competitor institution’s salaries.

Our Take

EduShine can assist you as much or as little as you would like in your compensation benchmarking exercise, drawing from our experience, and wealth of market insight. We can conduct competitive compensation analysis for academic or non-academic leadership roles, faculties, strategically important job roles, an individual role or for the whole organisation. 

Modern university leaders must recognize these change factors and develop appropriate strategies for successful adaptation. Key strategic decisions concerning university offerings, tuition levels, infrastructure investment and operational improvements will benefit from a deep understanding of cost drivers and reliable comparisons to peers, which in many cases are unavailable today.

Ways in which the benchmarking can be done

  1. Vertical benchmarking: Seeks to quantify costs, workloads, productivity, and performance of a defined functional area, for example the work of a student admissions department.  As this approach is generally based upon existing organizational structures, data collection is often more straightforward than with other methods. Such initiatives may be limited to the investigation of a single activity or may be multi-dimensional.
  2. Horizontal benchmarking: Seeks to analyse cost, workloads, productivity, and performance of a single process that cuts across one or more functional areas (example:  all aspects of student admissions irrespective of location within an institution). Results provide a comprehensive view of institutional practice in any particular area, but data collection and interpretation may be problematic.  Both horizontal and vertical benchmarks are useful diagnostic tools in identifying and prioritizing opportunities to improve an administrative process or function.
  3. Comparative/Competitive benchmarking: Involves the use of institutions as comparative performance indicators.  Competitive benchmarking is basically a continuous process of comparing an institution’s/university’s practices and performance measures with the most successful competitor from the industry. We at EduShine help it’s clients to come up with a concrete idea to rectify the grey areas and thus work on them accordingly.
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