What To Know About Forecasting Labor Costs In Higher Ed
Budgeting and forecasting labor costs in higher education can seem impossible. On average, staff salaries and benefits account for about 60% of the budgets of U.S. higher education institutions. If you don’t accurately forecast these costs, they can quickly push your institution into the red.
Labor forecasting helps you predict future staffing needs and costs. You can leverage this data to allocate resources efficiently and avoid overspending.
Traditionally, labor cost forecasting could be time-consuming. Thanks to platforms like When I Work, it’s simpler than ever. Try When I Work for free and see how it can streamline your labor cost management processes.
Key takeaways:
- Forecasting helps you plan and allocate resources efficiently
- Estimating future costs supports proper budgeting
- Accurate forecasts allow you to make informed hiring decisions
- You can run multiple “what if” scenarios to develop contingency plans
- When I Work simplifies the forecasting process with easy-to-use tools
Table of contents:
- Why are forecasts important in higher education?
- Budgets and forecasts in higher education
- Forecasting and budgeting best practices in higher ed
- Forecasting labor costs made easy with When I Work
Why are forecasts important in higher education?
Budgeting and forecasting labor costs in higher education help your institution plan for the future. You can allocate resources to support your students without breaking the bank.
Forecasts don’t just help you stay on budget. They can also help your institution overcome the higher ed labor shortage. You can identify how much money you have to pay salaries, upgrade benefits packages, and recruit talented professors. Labor cost forecasting will also help you:
Align resources with student needs
Labor forecasting shows you where resources are needed. Enrollment levels change from year to year. So do the programs students prefer. You need to keep up with these trends and structure your staff accordingly.
Maintain financial stability
Labor costs account for most of your expenses. Without careful forecasting, it’s easy to overspend. Even relatively minor overspending will leave less room in the budget for other needs.
Labor forecasting helps you plan ahead. You can obtain an accurate estimate of salary and benefit costs for the upcoming year. Use this information to prevent financial instability.
Budgets and forecasts in higher education
Budgets outline how much money you have to spend. Forecasts predict how that money should be allocated based on expected future needs. You need to align your budget with realistic labor cost projections. That way, you can avoid any big financial surprises down the road.
Forecasts help you prepare for the unexpected. Your budget will be more resilient to changes like lower enrollment or salary increases.
Forecasting and budgeting best practices in higher ed
Successfully budgeting and forecasting labor costs in higher education requires the right forecasting tools, a unified team, and a willingness to pivot if the organization’s needs change. Let’s unpack these and other best practices to set you up for success.
Accurate projections
Unreliable data leads to inaccurate projections. Before you run any scenarios or forecast labor costs, review your input data. Clean up inaccuracies and complete any partial records.
“Garbage in, garbage out” is a popular saying among data analysts. If you start with junk information, your forecasts will be unreliable. On the other hand, taking a little extra time to clean up your data sets will make your forecasts much more accurate.
Keeping the team on the same page
Labor forecasting and budgeting are collaborative processes. Get key stakeholders involved from day one. You should include HR, finance, and executive leadership.
Make sure everyone is aligned on institutional goals and what data to use. If everyone is on the same page, there’s a lower risk of miscommunication. For example, if your HR team understands budget constraints, they can work within those limits when hiring new professors.
Multiple what-if scenarios
Don’t assume that your first forecast is the right one. Create multiple what-if scenarios. You should build your budget around the most likely scenario. However, you must also create contingencies in case something doesn’t go according to plan. For instance, if enrollment numbers suddenly drop, you’ll need a plan to prevent overspending.
The right forecasting tools
You need the right software solutions to succeed at forecasting. There are lots of options out there—not all of which were built for higher ed.
When I Work has tools specifically for the education industry. With these tools, you can tap into the insights you need to make informed budgeting decisions.
That’s not all. When I Work also functions as full-service payroll software. You can forecast labor costs, build schedules, and run payroll, all from one user-friendly platform.
Pivoting when necessary
You create contingency plans for a reason. If an unexpected event makes your original forecast unreliable, pivot and adapt. Don’t simply stay the course because the school year is already underway. Adjust to avoid any major budget overruns and realign your forecast with projected revenue.
Forecasting labor costs made easy with When I Work
When I Work employee scheduling software can alleviate your labor forecasting headaches. Our all-in-one platform includes forecasting capabilities, scheduling tools, and much more. It features a time clock for tracking employee hours and secure messaging capabilities, too.
Try When I Work for free and unlock the power of our forecasting tools.