Inflation, Pay Transparency & Benefits Packages: Compensation Shifts in Higher Ed This Fall

As institutions brace for the new academic year, evolving priorities in compensation are reshaping hiring, retention, and equity in higher education. This fall, three intersecting trends—rising inflation, mandated pay transparency, and richer benefits packages—are leading colleges and universities to rethink traditional approaches to faculty and staff compensation.

Inflation-Driven Pay Adjustments

With consumer price inflation remaining elevated post-pandemic, many institutions are opting for Cost‑of‑Living Adjustments (COLAs) to preserve purchasing power. According to McKnight Associates, inflation remains a top concern entering 2025, prompting widespread COLA implementation across campuses. However, CUPA‑HR data shows these increases—around 2.9% for tenure-track and 3.2% for non-tenure-track in 2022–23—have consistently trailed behind inflation, leading to real wage losses for many faculty . Reddit accounts echo this: one professor reports earning less now than at initial hire—even after promotions. 

Pay Transparency Takes Hold

In response to inequities and legal mandates, pay transparency is gaining traction. California’s SB 1162 (effective Jan 1, 2023) requires publicizing salary ranges for all positions, including academic roles—prompting university systems like the University of California to update recruitment policies. Meanwhile, SHRM data indicates that 70–82% of employees prefer jobs listing pay ranges, and employers report improvements in candidate quality.

Transparency isn’t just a hiring boost—it can advance equity. Studies in academia suggest pay disclosure leads to fairer compensation and narrower wage gaps. Recognizing this, universities are developing internal processes to audit salaries, monitor equity gaps, and bolster transparency across departments. 

Expanding Benefits Beyond Pay

Institutions increasingly recognize that total compensation extends far beyond salaries. Rising inflation has intensified demands for comprehensive support. Employers are responding by enhancing benefits—expanding healthcare coverage, increasing mental health support, offering childcare, parental leave, and flexible work arrangements. Virginia Tech recently raised base pay by $608 for staff earning under $43,175, part of a broader push to stabilize lower-tier wages and address cost-of-living pressure. 

While U.S. higher ed benefits still pale compared to international standards, anecdotal evidence from Reddit suggests many U.S. faculty see healthcare contributions as the primary benefit—far short of the robust packages seen abroad .

Strategic Balance & Forward Outlook

This fall, institutions face the task of balancing constrained budgets with evolving compensation expectations. COLAs remain crucial but insufficient. Pay transparency initiatives are building momentum and yielding equity gains, while cohesive benefits packages offer a competitive edge—especially in recruitment and retention.

Still, challenges persist: merit raises are often frozen—Boston University, for instance, suspended merit increases this year despite inflation running above 3%. Strategic budget planning and stakeholder engagement (including unions and faculty governance) will be key to sustaining meaningful compensation growth without compromising institutional stability.

Unless campuses bridge the gap between headline pay raises and real economic value, higher education risks losing talent to sectors offering both transparency and robust non-salary support. For faculty and staff grappling with rising living costs and wage stagnation, this fall represents a potential turning point—where the convergence of transparency, inflation, and benefits could redefine how colleges compensate their people.

This fall marks a critical moment for higher education compensation strategy. Institutions that pair inflation-sensitive pay, transparent policies, and enhanced benefits will be best positioned to retain and attract talent in a tight labor market.