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Introduction and aim
This briefing note examines the governing body’s role in relation to employment. Its responsibilities include appointing the head of institution and acting as the employing authority for staff. The note discusses the role of a human resources strategy, staff surveys and quantitative data, pensions and pension deficits.
The governing body’s responsibilities
Higher education institutions (HEIs) are independent legal entities that are able to employ staff and enter into contracts. A governing body’s responsibilities for employment matters will be detailed in the Statutes and Ordinances (Chartered Universities) or the articles of government (Institutions constituted as Higher Education Corporations). They normally focus on key areas, including:
Full discussion of governors’ responsibilities and many of the topics discussed in this briefing note can be found in Getting to Grips with Human Resources Management.
Some, but by no means all, institutions establish committees of the governing body to look at employment matters. In chartered institutions they are often titled ‘staffing’ or ‘personnel’ committee. For post-92 institutions the articles of governance state the governing body ‘shall establish a committee or committees to determine or advise on such policies as relate to employment policy or finance as the governing body remit to them.’ Correspondingly, some post-92 institutions have a personnel or employment committee.
Appointing a head of institution
As the senior leader and its chief executive, the head of institution has a pivotal role in providing institutional leadership and management. Their appointment is a governing body’s responsibility, although in practice they are likely to (and may in some cases be required to) consult with a number of stakeholders, including Senate.
Frequently, the governing body will establish an appointments panel to oversee the appointment process. Membership of the appointments panel is often drawn from a number of constituencies, including, for example, independent members of the governing body, members of senate and students. The chair of the governing body normally chairs the appointments panel.
While appointment processes vary, typically they start by agreeing a role and personal specification for the position. Led by the governing body, this is frequently progressed by consulting with some or all of the following: staff, students, alumni and the Court. The consultation with different stakeholders inevitably takes longer, but leads to wider consensus of the type of leader sought. Once agreed, the role and person specification form part of an information pack for potential candidates.
If the recruitment is managed internally the Director of Human Resources (or similar role) takes the lead in overseeing the process. If institution employs a search firm, then they will be expected to manage the process.
Once the closing date for applicants has past, the appointments panel will meet to agree a short list of candidates. Those on the list will be invited to participate in the next stage of the process. This often involves one or more of the following: interviews, presentation, focus group discussions and psychometric testing. The process is often spread over a number of days. The process may also be designed to enable different stakeholders – for example, staff and students – to be involved and to offer their view on the candidates. In most cases the process leads to the emergence of a preferred candidate, who is then offered the position of head of institution.
Performance and pay
The governing body is responsible for appraising the performance of the head of institution and determining their pay. The remuneration committee discharges these responsibilities on behalf of the governing body (see Briefing Note No 16.).
Resource deployment and cost
Staff are a key resource and the largest category of recurrent expenditure. Examination of staffing should include both how resources support and enable the achievement of the institution’s mission and strategy, and whether their utilisation is efficient. Both aspects have a direct bearing on the institution’s performance and finances over the immediate and longer-term. Governors need to give consideration to both the strategic and financial aspects associated with the management of human (people) resources. The financial aspects of staffing decisions are discussed in Briefing Note 18: Finance.
Human resources strategy
The Statement of Primary Responsibilities included with the CUC Higher Education Code of Governance requires governing bodies to be responsible for ‘establishing a human resources strategy.’ The development of a human resources (HR) strategy is not however a requirement of the Scottish Code.
The development of a HR strategy offers governors the opportunity to ensure there is both clear direction and oversight of the resource base, while leaving the execution of the strategy to the executive team. A HR strategy is a sub-strategy of, and should be informed by, the institution’s strategic plan. Topics frequently contained in a HR strategy include an assessment of the current staffing position and future needs, aims and objectives of the strategy, key areas for action and performance measures.
The current staffing position should be informed by both quantitative and qualitative data. Typically, a HR strategy includes details of the total staff resource and costs, staff recruitment, retention and turnover, average salary levels, pay awards, profiles of service, age, sickness absence, gender, ethnicity and training and development.
The HR strategy should be agreed by the governing body, and regularly reviewed.
Staff surveys and forums
Periodically many institutions undertake a staff survey. The aim is to establish the levels of satisfaction of those employed by the institution, and identify issues requiring management attention. Surveys can be a useful source of information on staff perceptions, morale and motivation. They may be supplemented by staff forums, at which staff are able to meet with the executive and governors. When conducting staff surveys or forums it is important to be aware that they often raise expectations that issues will be addressed and actions taken. Should action not materialise, staff may become highly cynical about the process, with adverse effects on motivation. This suggests staff surveys and holding forums should be avoided unless there is a genuine desire to address any key issues that may arise.
Institutions return an annual staff record to the Higher Education Statistic Agency (HESA). This contains data on the characteristics of all staff under contract to the reporting institution, including, for example, total staff numbers, a breakdown of academic and non-academic staff, staff employed by cost centre and gender, ethnicity and disability data. The reporting period is the 1 August to 31 July.
HESA collates the institutional returns and produces the Staff in Higher Education publication. A sample of employment statistics drawn from the publication can be freely downloaded from HESA’s website. This data can be used for the purposes of making comparisons with other institutions and for benchmarking. However, in the light of the wide diversity of institutions comparisons need to be made with care.
Universities and Colleges Employers’ Association
The Universities and College Employers’ Association provides advice and guidance on employment matters and acts as the lead on national pay bargaining. 167 HEIs are members. While some HEIs have moved to local pay determination, the majority of institutions continue to be part of the national negotiating machinery for pay. Governors should expect to be briefed on any national or local negotiations, which affect employment in their institution.
There are a number pension schemes for staff employed in HEIs. Most staff working in pre-92 institutions belong to the Universities Superannuation Scheme (USS). Academic staff employed by post-92 HEIs are normally members of one of the Teachers’ Pension Schemes (TPS), while professional support staff belong to a Local Government Scheme (LGS).
As a result of improving life expectancy (increasing liabilities) and falling investment returns (reducing asset values), funded pension schemes are raising employee and employer contributions in order to address underfunding.1 Underfunding occurs if the scheme’s assets are insufficient to meet its liabilities. This is known as a pension deficit. Most pension schemes are currently in deficit. Pension schemes periodically reassess their assets and liabilities and the extent to which they are in surplus or deficit. Revaluations also affect individual institutions.
The net pension position for institution’s members of the scheme is shown as an asset or liability on the institution’s balance sheet. This shows the size of the surplus or deficit applying to the individual institution. Most institutions currently have a net pension liability. To ensure that the scheme’s pension payments can be met at some point funding will be required to make good this liability. Although currently there is little desire by institutions to remove their net pension liability, and revaluations keep altering the scale2, pensions remain a risk factor and a future call on resources.
Equality and diversity
There is increasing attention being given to equality and diversity, including in relation to new appointments and employment practice generally. Institutions need to meet a number of legal requirements, and governors should seek assurance that appropriate actions to meet statutory requirements have been taken. Governors should expect to receive, periodically, reports setting out the profile of staff and students and evidence that appropriate and positive action is being pursued to strengthen equality of opportunity and diversity.
The Equality Challenge Unit (ECU) supports the advancement of equality and diversity in higher education. Drawing on HESA data it produces reports on equality.3
Questions to consider
End notes and further reading
Associate Director, Governance
Aaron Porter was appointed as Associate Director, Governance at the Leadership Foundation (LF) in January 2014. He is also a higher education consultant and a freelance journalist, having previously been president of the National Union of Students (NUS) in 2010 – 2011. He is also an associate for the LF and the Higher Education Academy (HEA), on the advisory network for the Office for Fair Access (OFFA) and CFE research and consultancy alongside a number of other portfolio roles.
During his high profile term at NUS, he was the first NUS President to be invited as an observer to the board of the Higher Education Funding Council for England (Hefce) and to address the annual Universities UK Conference in September 2010. In addition he served as a non-executive director on the boards of UCAS, the HEA and Endsleigh Insurance. He also co-chaired the Beer/Porter Student Charter group which reported to Higher Education Minister David Willetts in January 2011, and was a member of the Hefce Online Learning Taskforce and the review of External Examiners chaired by Dame Janet Finch both conducted in 2010/11.
Previous to his term as NUS President, Aaron served two successful terms as NUS Vice-President (Higher Education), helping to build NUS’ reputation with the sector. He also served as a non-executive board member for the Office of the Independent Adjudicator (OIA) and on the board of the European Students’ Union (ESU). He was also a member of the Burgess Implementation Steering Group and the National Student Survey Steering Group. In 2009, he was part of the UK delegation to the European higher education ministerial summit in Leuven, Belgium.
Aaron studied BA English at the University of Leicester and graduated in 2006. He then spent two years as a sabbatical and trustee of the students’ union, he was also the founding chair of Unions94 (the students’ unions of the 1994 Group). As a student he was editor of the student newspaper, ‘The Ripple’.
Governance Web Editor
David Williams is Governance Editor for the LF website. He has over 25 years experience of working in higher education, as both as an academic and senior manager. During this time he has worked closely with governing bodies, contributing to, and supporting their work
in a variety of ways.
As Governance Editor, David works with the wider LF community and its members to ensure the governance website offers a repository of information and signposts recent developments in the field on governance.