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Strategic Budgeting, HR & Racial Equity, Educating Faculty on School Finances

By Net Assets posted 5 days ago

  

(from McKinsey & Company) CFOs across the business world are seeing the need for a new approach to budgeting this fiscal year. 43% of 127 CFOs that McKinsey recently surveyed cited the need to streamline their overall budgeting processes to react more quickly and efficiently. Meanwhile, 65% anticipate more use of rolling forecasts in 2021 and beyond. The typical budgeting exercise can get stuck in endless negotiations and may not address critical concerns about strategy, value creation or resource allocation. A reimagined strategic budgeting and performance-management processes can generate bolder discussions that are more in line with strategy. McKinsey recommends five steps: 

  • Stress-test scenarios and assumptions to counter uncertainty.
  • Reimagine the business from a zero base to determine key business drivers.
  • Hold back some spending centrally — as contingent resources — to build flexibility and optionality into budgets.
  • Assign finance talent to the highest-priority areas or topics to prevent burnout.
  • Rethink decision making to speed up and debias processes.
More from McKinsey & Company 

(from CUPA-HR) When educational institutions promote diversity and inclusion values or statements that are not substantiated by evidence of their implementation on campus, they can actually inhibit racial equity strategy development by encouraging passivity. Such statements, often lacking clear-cut outcomes, data and action steps, can be easy to hide behind, thus allowing inequities to persist. HR professionals need to identify where such gaps and disconnects are evident in order to develop targeted strategies. Data on the racial makeup of administrators, staff, faculty and other employees on your campus is a helpful place to begin. Consider these questions:

  • Does my institution or department frequently communicate its commitment to diversity and equity, yet employ disproportionately fewer people of color in significant staff, administrator or faculty roles?
  • If asked, would I be able to identify long-term, rigorously executed efforts to recruit, hire and retain such employees?
  • Are there obvious inconsistencies between institutional or departmental rhetoric and on-campus racial realities?
More from CUPA-HR

(from the Chronicle of Higher Education) While there are many things to know about how colleges and universities operate, the lack of financial understanding among those who work in higher education has become increasingly obvious. Faculty and staff members have responded to coronavirus-related budget reductions, layoffs, furloughs and pay cuts with demands for greater financial transparency. They want to know how buildings are paid for, why the college can't simply borrow more money and how the endowment is spent. Those questions are reactive, not strategic. Consultant Allison Vaillancourt asks college faculty a list of 10 questions to assess their real knowledge of institutional finances. These include:

  • What was the annual revenue of your institution in the last fiscal year? What percentage of that was tuition?
  • What were your college’s top three sources of revenue?
  • What was the total amount spent on faculty and staff salaries last year? And the total cost of annual benefits?

"It is certainly time for more open and honest conversations about how money is raised and spent," she wrote, "but those conversations must also deal with the myriad ways that faculty and staff members influence both costs and revenue, and the imperative to consider new approaches."

More from the Chronicle of Higher Education

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