Australia’s universities are some of the most prestigious and highly-ranked in the OECD. Yet the sector is arguably in crisis.
It narrowly escaped a potentially devastating hit to the $47.8 billion in annual revenue generated by international education, with proposed international students caps only just scuppered in parliament’s last sitting fortnight of the year.
But it is again being rocked by headlines around “wage theft” and millions of dollars wasted on consulting fees by some of our biggest universities.
A damning report by the National Tertiary Education Union has labelled this a “crisis of governance” constituting “reckless spending’’ by “the overpaid executive class”.
Ouch.
Yet Australia’s education system is strong by global standards, ranking third globally, and is home to several prestigious universities that consistently rank among the best in the world.
It is unlikely that a sector built on advancing human potential has solely reached this point by maliciously setting out to hurt its own backbone – its faculty.
Rather, systemic problems often indicate structural sectoral flaws, and ineffective means to address them. And Australia’s university system is not immune by any means.
A legacy issue of systemic complexity
We cannot know with certainty if there are indeed some bad actors in this story. Possibly.
But what is undeniably evident are the range of sectoral factors contributing to the sector’s longstanding history of poor record-keeping, including the challenges posed by its complex workforce structure.
Payroll compliance in universities is highly complex due to the combination of intricate awards, unique enterprise agreements, and a history of poor record-keeping.
For instance, universities rely heavily on casual staff, working under often-opaque arrangements. Compensable tasks such as marking essays or tutorial attendance are governed by intricate rules or piece-rate agreements, complicating the tracking of hours and payment.
These layers of complexity create incomplete and inaccurate timesheet data, making it nearly impossible for a human to verify when employees worked and whether they were paid correctly.
And so the resulting payroll errors aren’t just mistakes – they represent a systemic failing with devastating consequences all round.
Underpaid employees face reduced morale, a loss of trust in their employers, and financial stress that often disproportionately affects the most vulnerable. Menwhile, the underpaying universities risk potentially enormous fines and suffer from deep reputational damage, as has been demonstrated recently.
Worse still, is the fact that attempts at resolving these issues are also failing, because they represent nothing more than curative and labour-intensive bandaid “solutions”.
For instance, many universities, after spending millions on consultants to recalculate and backpay impacted employees, have now shifted to hiring large internal teams to manage ongoing compliance efforts.
These teams are tasked with monitoring timesheet accuracy, tracking errors, and managing ongoing remediation efforts, seemingly indefinitely, as if fixing this problem should somehow just be “business as usual”.
Yet treatments should never be “business as usual”, because this is to accept that the problem will never be resolved.
Instead, systemic problems like this one require systemic solutions that assume eliminating the problem is indeed possible.
Fixing the system, not the symptoms
For this to occur, Australia’s tertiary education sector must urgently stop outdated and cumbersome legacy practices and instead embrace preventative long-term solutions that rebuild trust, and support fair and accurate pay for all employees.
In practice, this would involve the adoption of advanced compliance tools and technologies that enable payroll teams to efficiently and accurately monitor payroll end-to-end. This allows teams to rapidly identify errors before, not after, a pay run, and drastically reduce the need for constant manual interventions.
Introducing independent oversight by risk and compliance teams will also help to reduce the risk of a “marking your own homework” approach by human resources and payroll teams, bringing a fresh perspective to compliance checks.
Regular training to keep payroll and compliance teams up to date on changes in legislation, award conditions, and enterprise agreements are also a must in industries like education where payroll practices are complex and dynamic.
And, finally, all of these processes should be consistent across all schools and faculties to avoid disparities and confusion, and reduce errors caused by varying practices.
Any university with the courage to break from centuries of backwards-looking remediation practices and instead embrace a forward-looking, technology-based approach would not only demonstrate bold and refreshing leadership.
It would also help to create enormous goodwill for a sector in desperate need of positive news and, critically, potentially save millions in the process.
Fred van er Tang is chief executive of payroll compliance technology company PaidRight.
