How Can Labor Market Information Inform Higher Education Program Offerings?

INTRODUCTION?

Why would higher education institutions decide to start new academic programs? Institutions are looking at post-pandemic enrollment and student and family attitudes towards college and concluding that new programs are a way to attract new students. New programs can show linkage to workforce demand and facilitate industry partnerships. There is also a natural tendency to respond to competitive demands and to differentiate from other institutions. It is important to note that starting new academic programs is not without its risks.?

There are several points that could lead to starting a new program. It might be College or University leadership seeing an article in the press, reading a book, or viewing a TV segment. A member of the governance board might advance the same during trustee meetings. An employer or industry coalition might supply their own analysis supporting the need. Federal, state, or local governments might put incentives and funding in place to jumpstart the creation of a program. Student demand can also point to the need for programs. Labor Market Information can also highlight gaps in supply in demand for talent where employer needs may differ in quality or quantity from the local populace.?

It can be expensive to develop and implement new academic programs, and there is no guarantee that they will be successful. Recent research has shown that many new programs are not successful. However, for institutions that beat the odds starting new academic programs can be a way to weather the storm of falling enrollment. New programs can drive additional revenue and can raise the reputation of the institution beyond their existing geographies and attract new pools of students.?

RISKS OF STARTING A NEW PROGRAM?

Higher education institutions face several challenges when trying to create new programs in response to shrinking enrollment. The creation of a new program requires the shepherding through various governance structures including academic departments and leadership, the institutions governance board, the state, various Federal entities, and accreditors. Every new program has assumptive startup costs including staffing, facilities, equipment, and software licensing. Innovative marketing will need to be created to support the program. A new program is also an opportunity cost from an institution; the time and labor creating a new program could have been spent elsewhere. Partnerships will be needed to validate demand and curriculum, to provide paths for experiential learning such as internships and apprenticeships, and to develop employment opportunities for new graduates. The supply and demand for qualified faculty for some programs may be constrained. Existing labor agreements may not allow for the salary levels necessary to attract people away from well-compensated employment in industry. The enrollment, academic, and business units on campus must agree on the costs, enrollment projections, and revenue needed to sustain the program. Lastly, competitors may already offer this program or nearby institutions may have reached the same conclusion and are spinning up a program.?

LABOR MARKET AND HIGHER EDUCATION PROGAM OFFERINGS?

Labor Market Information (LMI) can be a valuable tool for institutions of higher education in making decisions about the inauguration, investment, or disinvestment of programs of study. By understanding the current and projected state of the labor market, institutions can make more informed decisions about which programs are likely to be in demand and which are not. Labor Market Information can identify high-demand programs that lead to employment. Labor Market Information can also inform institutions which programs could benefit from additional investment and identify programs at risk. Institutions can use labor market information to identify programs that are at risk of becoming obsolete or less in demand. This information can be used to make decisions about whether to disinvest in these programs.?

There are caveats to using LMI data. Labor market information should be accurate and up to date. This can be done by consulting sources such as government agencies, industry associations, and professional organizations. The labor market information should be relevant to the specific programs that the institution offers and align with its mission. For example, an institution that offers programs in engineering should focus on labor market information for engineers. The labor market information should be timely so that institutions can make informed decisions about the programs they offer. For example, an institution that is considering inaugurating a new program should use labor market information that is at least a few years old. It is also important to consider the distortions in LMI data due to the pandemic and lingering effects.?

ASSUMPTIONS WITH LABOR MARKET INFORMATION?

There are several assumptions in looking at Labor Market Information. These include the geography considered. In this case I choose to look at the Philadelphia Metropolitan Statistical Area which includes the Philadelphia region and the collar counties, Southern New Jersey, Delaware, and Maryland. It is likewise important that this regional approach does not consider specializations within the region. For example, many Federal employees live in Maryland. The financial industry is highly concentrated in Delaware. Philadelphia has many medical institutions and several corporate headquarters. Occupations should not be assumed to be distributed throughout the region. Also, in looking and what education and training entities exist we look at the same geography. ?

When using labor market information in the creation of academic programs at institutions of higher education, it is important to consider the following criteria: ?

• Estimation of occupation growth: Institutions should consider the projected growth of occupations in the labor market when creating new academic programs. Occupations that are projected to grow rapidly are more likely to be in demand and offer good job opportunities. An occupation might be in demand for other reasons than growth for reasons such as an aging workforce.?
• The concept of Net Commuters: Institutions should also consider the concept of net commuters when creating new academic programs. Net commuters are people who live in one area but work in another. Institutions should consider the number of net commuters in the area when creating programs that are likely to attract these workers. A new industry entering your geography may attract qualified residents. Conversely, industries entering a nearby geography could attract residents and create new demand.?
• Work experience needed: Institutions should also consider the amount of work experience needed for different occupations when creating new academic programs. Occupations that require little or no work experience are more likely to be open to recent graduates.??
• On-the-job training requirements : Institutions should also consider the amount of on-the-job training needed for different occupations when creating new academic programs. Occupations that require a lot of on-the-job training may not be a good fit for students who are not planning to work in the field immediately after graduation. Work experience can range from none, short, medium, or long term through apprenticeships and internship or residency.?
• Expected entry -level education: Institutions should also consider the expected entry-level education for different occupations when creating new academic programs. Occupations that require a bachelor's degree or higher may not be a good fit for students who are only planning to complete an associate degree. Education levels can range from none, high school diploma, some college no degree, postsecondary non-award, or associate, bachelor, master, or doctoral/professional degrees.?

CLARIFICATIONS WITH JOB QUALITY?

When designing academic programs around occupations, institutions should consider the following factors with regards to job quality:?

• Livable wage : Institutions should consider the wages that are typically earned in the occupation when designing the program. The program should prepare students for jobs that pay a livable wage, which is a wage that is high enough to cover basic living expenses. The living wage according to data provided by MIT (Massachusetts Institute of Technology) says the livable wage in the Philadelphia MSA for a single person is $17.53/hour and up to $26.14 for a dual income household with two dependents.??
• Return on investment: Institutions should consider the return on investment (ROI) for the program when designing it. The ROI is the amount of money that students can expect to earn in added wages over their lifetime as a result of completing the program. The program should have a positive ROI, which means that students should earn more money in additional wages as compared to a high school graduate than they spend on tuition and other costs. ??
• Risk of automation: Institutions should consider the risk of automation when designing the program. Automation is the use of machines to do work traditionally done by people. Occupations that are at risk of automation may not be a good fit for students who want to have a stable job with a good salary.?
• Job turnover : Institutions should consider the job turnover rate when designing the program. The job turnover rate is the percentage of people who leave their jobs in a particular occupation each year. Occupations with high job turnover rates may not be a good fit for students who want to have a stable job. Students should consider whether high turnover is an indication of high upward or lateral mobility within an industry or a warning flag of difficult working conditions or workplace culture.?