How COVID-19 Has Compelled Colleges to Shed a Tenth of Their Employees
Per the U.S. Bureau of Labor Statistics (BLS), the country’s unemployment rate hit a record peak of 14.7% in April 2020, with colleges laying off at least 10% of their employees, due to the COVID-19 recession. According to the Chronicle of Higher Education, more than 50,900 employees from 218 universities and colleges across the country have lost their jobs due to pandemic-related job cuts and layoffs. It is worth noting that even after the cautious reopening of some colleges, many colleges and universities have announced hiring freezes, leading to lower employment figures compared to previous years. Here is more information about this topic.
The Layoff Numbers
In the past several years, colleges and universities in the U.S. have experienced financial difficulties at least once. However, the COVID-19 recession has had a major impact on the financial capabilities of most higher learning institutions, leading to mass layoffs, unpaid leaves, and the dropping of contracts for many employees. Additional statistics regarding layoffs include:
- In March 2020, Stanford University’s management board decided to lay off some workers, citing a huge financial crisis. They also predicted an even bigger crisis, particularly a $267 million loss during the COVID-19 pandemic period. Much of this loss would result from factors like housing revenue due to many students moving out of the college hostels, temporary cessation of income-generating activities, and increased expenses such as student aid. To deal with these issues, the university management opted to freeze salaries, reduce payment for senior leaders, temporarily halt all projects that require capital, and lay off some workers.
- So far, the University of Massachusetts has placed 1,000 workers on unpaid leave and announced a hiring freeze in an attempt to cut their expenses.
- Due to the COVID-19 recession, the University of Wisconsin also faces a $30 million loss, causing management to put survival measures in place. For instance, the university has urged employees to go on monthly furloughs to reduce their salaries, with those earning more having a bigger reduction. Senior leaders have also reduced their salaries by 15% to save on costs.
- The University of Missouri has laid off more than 100 workers, furloughed some, and refused to renew contracts for others. Additionally, those lucky enough to retain their jobs have had their salaries cut by a certain percentage.
So far, these measures have been hard for most employees, with some going through financial turmoil. Even so, the tough measures have helped some colleges stay afloat amid the pandemic while allowing them to conduct online learning.
The Major Reasons for Job Cuts
In general, the COVID-19 pandemic has been the major cause for layoffs, furloughs, and non-renewal of contracts in many U.S. colleges. However, the economic impact of the pandemic is what has rendered many jobless, as universities strive to remain operational during the pandemic since most of their sources of income are not operational. In addition, the health concerns arising from the COVID-19 virus have compelled the federal government to close down all schools and only conduct virtual learning where possible, says the Federation of American Scientists (FAS). For this reason, there has been little or no demand for labor in most higher learning institutions, causing management to lay off workers.
For more information about the financial outlook of higher learning careers, contact the professionals at McKnight Associates, Inc today. We are ready to offer you hands-on human resource consulting for colleges, universities, medical centers, and organizations of all sizes.