Written by Megan Nail, VP, Total Rewards Practice
In today’s labor market, compensation strategy plays a central role in recruiting and retaining talent across the board, but higher education in particular faces unique constraints — long budget cycles, multi-layered approvals and a heavy dependence on public funding make it difficult for institutions to respond quickly to market shifts.
Simultaneously, rising labor costs and increased competition for talent are putting new pressure on colleges and universities to rethink outdated salary structures and modernize how compensation supports the workforce.
Grading Against a New Curve
Many institutions are still working with salary frameworks designed before recent market upheavals. In the years since the pandemic, entry-level wages for administrative and facilities roles have surged. Pay equity concerns are growing. And in many cases, compensation hasn't kept pace — eroding both morale and retention.
The result? Delays in hiring. Loss of top talent to the private sector. And increased disengagement across key staff groups. It’s no longer enough to make occasional adjustments. Institutions need a sustainable, phased approach to workforce pay that balances mission, funding and strategy.
The Curriculum of Compensation
The most effective compensation strategies today are grounded in data and built with intention. Higher education leaders are beginning to move away from reactive budgeting in favor of long-range plans that address pay challenges over time.
A targeted strategy often includes:
- Using market data to assess salary competitiveness.
- Segmenting compensation priorities by role or risk.
- Communicating total rewards more clearly to reinforce value.
Just as importantly, many institutions are rethinking how benefits and pay interact. By aligning compensation with employee priorities – including financial wellness, healthcare access, and career development – leaders can drive retention and rebuild trust even in the face of budget constraints.
NFP Can Help
At NFP, we partner with higher education institutions to modernize compensation in ways that reflect both your financial realities and your workforce ambitions. Our Total Rewards and Human Capital Solutions teams work closely with colleges and universities to assess current pay structures, model future-state plans, and implement sustainable solutions that align with institutional goals.
Whether you’re looking to refresh your pay philosophy or completely reengineer your compensation model, we’ll meet you where you are — and help you move forward with clarity and confidence.
Let’s build your compensation curriculum together. Contact us today.
