The use of incentives in student recruitment and the implications for good risk management and control

It is that time of year again where students will embark on what, for many, is a life changing experience which will set them up for future careers and lives. However, the student recruitment landscape faces significant challenges. Over the past decade higher education has become increasingly competitive. With changing demographics, declining international applications and frozen student fees, universities are competing for the attention of prospective students, often employing various methods to attract them.

These can range from those designed to improve the offering such as scholarships, bursaries and enhanced campus services, to more explicit and targeted incentives such as guaranteed accommodation. While these strategies can be effective in boosting enrolment numbers, they also raise important questions about transparency, fairness, and the importance of ensuring there is a strong culture of risk management and ethical practices.

The use of incentives in higher education is not a new phenomenon, but it has gained significant traction in recent years. According to a recent article [1], universities are increasingly offering overtly financial incentives to attract students, particularly in the wake of declining enrolment numbers and heightened competition.

What types of incentives are universities offering to attract students?

• Scholarships and bursaries: Financial aid packages designed to reduce the cost of education for students.
• Guaranteed accommodation: Promises of on-campus housing for the duration of the student's studies.
• Enhanced campus facilities: Investments in state-of-the-art facilities, such as gyms, libraries, and student centres, to improve the overall student experience.
• Career services: Enhanced career support and job placement services to attract students looking for a strong return on their educational investment.

While these can make higher education more accessible and appealing, they also introduce new challenges for Vice Chancellors and senior management, who are tasked with ensuring that recruitment practices are ethical and transparent, whilst ensuring student numbers are maximised to improve financial sustainability.

How do these incentives impact the fairness and transparency of student recruitment?

The rise in incentives raises several ethical considerations and risks. Firstly, there is the risk of creating an uneven playing field where wealthier institutions can offer more attractive incentives, potentially marginalising smaller or less well-funded universities. This can lead to a concentration of resources and talent in a few elite institutions, exacerbating existing inequalities in the higher education sector.

There is also the issue of transparency. Prospective students and their families need to have a clear understanding of what is being offered and the terms and conditions attached to these incentives. Misleading or opaque practices can damage the reputation of institutions and erode trust.

Incentives also have the potential to influence student choice in ways that may not align with their best interests. For example, a student might choose a university based on the availability of a scholarship rather than the quality of the academic program or the fit with their career goals.

What role do internal auditors play in managing the risks associated with incentives?

Internal auditors play a crucial role in ensuring that student recruitment practices are ethical, transparent, and compliant with relevant regulations. Internal audit engagements in this area should focus on the following key areas:

The use of incentives in higher education is a complex and evolving issue. These strategies can be effective in attracting students, but they also raise important ethical and practical considerations. Internal auditors play a crucial role in ensuring that recruitment practices are ethical, transparent, and compliant with relevant regulations. By adopting best practices and promoting a culture of fairness and transparency, universities can attract students in a way that aligns with their values and strategic goals.

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References

[1] Cash prizes and free rent: Uni clearing offers 'inappropriate' - BBC News