As technology advances and societal expectations evolve, higher education institutions are navigating complex risks that affect their stability, relevance, and ability to adapt. The latest Top Risks Survey highlights the pressing challenges and potential vulnerabilities facing the sector in 2024. This list distills the most significant risks into core categories that institutional leaders must address to thrive in today’s dynamic landscape.
1.) Cybersecurity, Privacy, and Technological Competence
- Cyber Threats: Cybersecurity breaches remain a top concern, exposing institutions to financial, reputational, and operational risks. Comprehensive cybersecurity strategies are essential, incorporating routine monitoring, employee training, and penetration testing.
- Legacy IT Infrastructure: Aging technology systems limit competitiveness against “born digital” competitors and risk underperformance. Institutions should prioritize IT asset management and risk-based assessments to maintain up-to-date systems.
- Privacy and Data Protection: Compliance with identity protection and privacy standards is crucial. Institutions must have robust data management and privacy practices, including regular privacy assessments and stringent records retention policies.
2.) Talent Management and Resistance to Change
- Attracting and Retaining Talent: Competition for skilled professionals has intensified, especially for technology roles. Flexible work arrangements, competitive compensation, and engaging work environments are necessary to attract and retain qualified staff.
- Succession Planning: With an aging workforce, succession planning is critical for sustained operations and leadership continuity.
- Resistance to Change: The reluctance to adapt to new business models and operational approaches hinders progress. Institutions that embrace flexible and innovative programs are better positioned to meet evolving student needs and demographic changes.
3.) Regulatory and Economic Challenges
- Heightened Regulatory Scrutiny: Institutions must navigate increasing regulatory oversight on issues like Title IX, Title IV, accreditation, and online program management. Compliance functions must be reinforced with consistent risk methodologies, values-based cultures, and strong internal controls.
- Economic Pressures: Inflation, high interest rates, and rising labor costs impact budgets and may necessitate tuition increases. Economic conditions also affect private contributions and push students toward alternative education pathways.
4.) Business Model Risks
- Revenue Generation and Financial Sustainability: Institutions face increasing challenges to sustain revenue in a changing educational landscape. New delivery models and alternative revenue sources are necessary to remain viable against more agile competitors.
5.) Reputation Risks
- Media and Public Perception: In a 24/7 news cycle, higher education institutions are under constant scrutiny. Proactively managing reputation and media presence is vital to mitigate potential brand damage and maintain stakeholder trust.
6.) Operating Model Risks
- Operational Efficiency and Agility: Inefficient processes, outdated systems, and lack of adaptability affect competitiveness. Institutions need agile operating models that support program delivery, research, and vendor relationships.
7.) Enrollment Supply Risks
- Student Enrollment Fluctuations: Tuition-dependent institutions face financial risks from declining student populations and shifting demographics. Accurate forecasting and flexible programming are essential for enrollment stability.
8.) Compliance Risks
- Regulatory Compliance: Noncompliance with state, federal, and private regulations can result in funding loss, legal consequences, and accreditation issues. Strong governance and oversight are critical for adherence to evolving standards.
Embracing the New Normal
Higher education institutions must adapt to a “new normal” where rapid changes demand proactive, enterprise-wide risk management. Rather than managing risks in siloes, institutions should adopt a holistic approach to recognize the interconnected nature of these challenges. Governance, data sharing, streamlined processes, and a supportive organizational culture are necessary to anticipate and mitigate risks effectively. In this evolving landscape, institutions that embrace flexibility, innovation, and collaboration will be better positioned to thrive amidst continuous change.
Erin Teta, CIA
Director
Erin is a Director of Cerini & Associates, LLP and works primarily within the firm’s education department. She has a robust background spanning over 15 years in Internal Audit, SOX compliance and Claims Auditing. She has worked with school districts, villages, nonprofit organizations, telecommunications and higher education.
