Universities need to realise they’re in the service industry

An ideological gap has grown, where some universities have different ideas to students about the concept of a university, says Steve Davies

二月 9, 2021
Service industry
Source: iStock

UK universities are undoubtedly among the best in the world. True, the likes of MIT, Stanford and Harvard may often be the ones that top the rankings these days, but it’s British universities that are still spoken of with hushed reverence.

As a result, the culture of many British universities can certainly be considered elitist. But let’s not forget that virtually all UK universities have a touch of elitism about them − by their very nature they cater to a student with “higher” ambitions and charge a not insignificant price tag for the pleasure.

And herein lies the paradox.

Modern universities, despite perceptions, are in fact part of the service industry. Students pay and they are provided with a service. But some universities seem to struggle to reconcile their service sector status with their perceived position as hallowed fonts of educational and research excellence.

This has come to the fore since the introduction of the £9,000-per-year tuition fees. Students are leaving university with more debt than ever and are increasingly seeing “value for money” as a key issue when making university choices. An ideological gap has grown, where some universities seemingly have different ideas to their students about the concept of what a university even is.


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Of course, this mood shift has not gone unnoticed and the notion of “student as consumer/client” has gained traction, with a growing understanding that the UK may need to switch to a more business-orientated approach. So, how do British universities become more “client focused”?

To begin with, let’s look to the US. I’m not here to wax lyrical about the US system − their fees are extortionate, prohibitively so for many, but what the Americans do understand is that universities are indeed part of the service sector and offer their students a full 360 experience, with facilities that are often world-class. So, what are the keys to delivering such an experience?

The wooing
I think of this in terms of booking an expensive holiday. The holiday company treats you incredibly well from the moment your tickets are booked, you’re kept up to date with the latest information about your destination, and when you arrive there is a host of people on hand to cater to your needs.

I’m not suggesting that the British university experience should resemble a 5-star holiday, but the fact remains that students are paying tens of thousands of pounds for their university education, and many universities fall short in terms of the type of customer service that one would expect in the hospitality sector, for example.

Customer satisfaction
To date, many of our universities have viewed their role as a one-way impartation of knowledge. But the role of a modern university needs to be far more than that – it must throw a holistic perimeter of care around each student, to monitor and be responsible for everything from their engagement and interaction to their physical and mental health, financial matters, career paths and much more.

In all other sectors of the service industry customer satisfaction is placed at the very heart of what they do, with a full bottom-up approach − something that some universities have been slower at implementing.

The reality, of course, is it hasn’t been that long since British universities moved out of the state-dependent sector and, for some institutions, it will take some time to adopt a capital market perspective. However, since 2005 strides have been made in this area with the introduction of the National Student Survey, which has become an influential source of public information and has provided universities with a crucial source of consumer intelligence.

The age of Covid
Universities have found themselves at the centre of negative Covid-related headlines since the start of the pandemic. For now, they are enjoying something of an economic “free pass” that has not been afforded to the rest of the service sector, and still charging full fees.

Clearly, this unhappy status quo will not continue and there will undoubtedly be a reckoning that will rock the sector to its core. But out of the wreckage of Covid it is hoped that universities will capitalise on the opportunity to build back better by placing the student at the centre of the story.


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Perhaps some universities may finally invest in the much-neglected digitalisation of programmes (some have made strides here while others lag). And many institutions will be forced to embrace hybrid in-person/online teaching methods that, had they already been implemented, would have placed them in much better standing to weather a pandemic.

Certainly, such a watershed will require some universities that had been operating in much the same way for centuries to experience a moment of introspection and hopefully emerge resolute to being more adaptable in the future.

If nothing else, the pandemic has made universities realise that, without fees, particularly those of international students, their business model is vulnerable. And while many universities have multiple income streams, with corporate research funding being perhaps the most lucrative, without their students their very existence becomes something quite nebulous.

Steve Davies is professor of medical education at the University of South Wales, a consultant physician in Cardiff and the founding director of Learna, a provider of postgraduate online education, with courses spanning specialist postgraduate diplomas and MScs for medical professionals, to a portfolio of Executive MBAs.

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Reader's comments (4)

Although I do my best to look after my students (often to the detriment of my career progression), this article makes me glad to be near retirement. It is depressing that it is OK to talk about elite sport but not its equivalent in academic study. Students gain entry to an institution just as one does for a gym and so universities are not like shops or restaurants as considerable effort is required to come away with a good degree. Moreover, if staff are not more knowledgeable than students then what are the latter paying for? A lot of the problems of viability would be solved if expansion (with its continual building programme) slowed and the mass system was brought to an end.
Full professor in a technical discipline here. I didn't sign up for a service sector career. I wanted autonomy, tenure, be my own boss, and preserve integrity, rather than kissing customers' behinds. I got the opposite in the end. Time to leave the sinking ship? With a bit of effort, I might still be able to move into the private sector. Better pay anyway, and most of the perks in academia are gone. So sad because I worked hard to get those dozens of papers done and accumulate thousands of citations. I've been advising my students against this career path for a while now. Maybe it's finally time to move to greener pastures.
There are opposing poles here. Clearly groups (which can be the minority ) of self-entitled academics who want a University to revolve around them. And then a student contingent who are equally self-entitled and whose abhorrent behaviours have been exposed during this past difficult year. In-between is a solid core of people who just want to get on, learn, gain knowledge and make the very best of any opportunities laid before them. Cut off the lazy tail and the dead head and you don't need a 'service industry' view. Creating common behavioural standards and charters is the way to weed out those who don't deserve to be there, regardless of grade or background. A service industry perspective is used to correct institutional failure, whereas people working together naturally and harmony will deliver much of what you require around efficiency and community.
Great comment Cactus. It doesn't help that much of the article seems to be based on the position that "students pay so should receive a service". There is an element of that, but the contract between student and university [should] also state the expectations of students to contribute through sharing of ideas and civic/community engagement. The old chestnut of perception vs reality with tuition fees doesn't help: "the fact remains that students are paying tens of thousands of pounds for their university education, and many universities fall short in terms of the type of customer service" - actually, most of them are not paying in the end (and that is a fault of policy and legislation, rather than the universities themselves).