All Education Services Financial Metrics and KPIs
Every business, whether it’s in the Education Services industry or not, should track and monitor its financial metrics and KPIs. These numbers provide a snapshot of how your company is performing financially. So, it can help you identify areas where you need to make changes. Additionally, there are many specific education services financial metrics and KPIs to track.
That’s the reason, in this article, we’ve discussed the size of this industry, the importance of financial metrics and KPIs, and a detailed explanation of each individual metric. With this information, you should be able to make informed decisions about your educational services business.
Let’s have a quick look at the Global Education Industry.
How Big is the Global Education Industry?
Globally, the Educational Services market is projected to reach US $1.9 Trillion by 2027, growing at a CAGR of 6.6% over 2020-2027 during the COVID-19 crisis.
These numbers speak volumes about the size of this industry. Also, the global educational services market has grown, despite the pandemic. This just goes to show how essential these services are.
Moreover, the education industry is expected to grow significantly in the next few years, making it an attractive industry for entrepreneurs.
Now that you know how important this industry is, let’s take a look at some specific educational services financial metrics and KPIs.
We have divided these metrics and KPIs into the following categories:
1. Educational Services Financial Metrics
2. Student Success KPIs
3. Admissions and Enrollments metrics
4. Faculty and Staff KPIs
5. Facilities and Resources Metrics
Education Services Financial Metrics
When we talk about education services financial metrics, we’re referring to the numbers that give you a snapshot of your educational institution’s financial health. Although these financial analysis metrics can help you understand your business’s overall financial performance, it’s not easy to do it all on your own.
That’s why you will need professional financial analysis assistance in this regard. And this is where Oak Business Consultant comes in. We have been providing expert financial analysis services to businesses in various industries, including education, healthcare, fintech, real estate, automotive, and more.
We know that every industry has its own unique financial analysis requirements. That’s why we offer customized solutions tailored to your specific industry and business needs.
Our financial analysts and expert consultants have prepared education financial models, business plans, and pitch decks. These are the tools that you need to make informed decisions about your educational institution. Along with that, we also provide special-purpose CFO services for educational institutions.
Some of the education services financial metrics that we track are:
Every educational institution has instructional costs. These include the costs of materials, faculty salaries, and other associated expenses. Also, if your institution offers online courses, you will need to factor in the costs of technology and maintenance. Here we are interested in knowing about these instructional costs per student.
So, how do you calculate them?
The first step is to calculate the total instructional costs. You can do this by adding up all the faculty salaries, cost of materials, and other associated expenses. Then, you will need to divide this number by the total number of students.
Instructional Cost per Student = Total Faculty Salaries + Cost of Materials + Other Expenses / Total number of Students
This will give you the instructional costs per student. This metric is important because it will give you an idea of how much it costs to arrange one class. This, in turn, will help you budget your resources and make informed decisions about your educational institution.
Operating Margins (Administrative Costs per Student)
Since you are in the education industry, you need to know about education services’ financial metrics like operating margins. This metric will help you understand the percentage of revenue that is left after all the expenses have been paid. But before going into to whole operating margins details, let’s look at one particular area of this metric – administrative costs per student.
The administrative costs per student metric give you an idea of how much it costs to run your educational institution on a per-student basis. To calculate this number, you will need to add up all the administrative expenses and divide it by the total number of students.
Operating Margins = Total Administrative Expenses / Total number of Students
This metric is important because it will help you understand where your money is going. This, in turn, will help you make informed decisions about your educational institution.
Revenue per Student
There can be various streams of revenue for an educational institution – tuition fees, government grants, donations, and so on. But what’s important is to track the revenue per student. This number will give you an idea of how much each student is contributing to the overall revenue of your educational institution.
To calculate this number, you will need to add up all the revenue streams and divide it by the total number of students.
Revenue per Student = Sum of all the Revenue streams / Total number of Students
This metric is important because it will help you understand how much each student is worth to your educational institution. Because of this, you can make informed decisions about your educational institution.
Program and Department Budgets
Another one of the important educational services financial metric is budgeting. We are mainly interested in budgeting for various programs and departments within your educational institution. Every educational institution has a limited amount of resources. Therefore, it is important to budget your resources in a way that is best for your educational institution.
There are various ways to approach budgeting. One common method is zero-based budgeting. With this method, you start from scratch and justify every expense. This can be a good method to use if you want to have a good understanding of where your money is going.
Another method is activity-based budgeting. With this method, you allocate resources based on the activities your institute is carrying out. This can be a good method to use if you want to ensure that you are using your resources efficiently.
The choice of budgeting method is up to you. But what’s important is that you have a budget and that you track your expenses against it.
Student Financial Aid Percentages
When analyzing your educational institution’s finances, you should also look at the percentage of students who are receiving financial aid. There are two reasons for this. First, it will give you an idea of how many students need financial assistance. Second, it will give you an idea of how much money you are spending on financial aid.
The budget that you have for financial aid will affect the overall budgeting of your institution. Therefore, it is important to track this number and make sure that you are not overspending on financial aid. There are various ways to calculate this number. But the most common way is to divide the total amount of financial aid by the total number of students.
Student Financial Aid Percentages = Total Amount of Financial Aid / Total Number of Students
Now that you know about some of the important education services financial metrics, let’s look at the student success KPIs.
Student Success KPIs
It’s very important for every educational institution to track student success KPIs. After all, the ultimate goal of every educational institution is to help students succeed. There are various student success KPIs that you can track. But we have discussed some of the most important ones below.
One of the most important student success KPIs is graduation rates. This metric gives you an idea of how many students are able to successfully complete their studies. Since this is the ultimate goal of every educational institution, it is important to track this number closely. The more students who are able to graduate, the better. But it’s not just about the number of students who graduate. It’s also about the quality of graduates. Therefore, you should also track the employment rates of your graduates. This will give you an idea of how well your graduates are doing in the job market.
When we talk about retention for educational institutions, we are referring to the number of students who stay enrolled in your institution. There are various reasons why students might leave your institution. But whatever the reason, it’s important to track this number closely. A high retention rate is a good sign. It means that students are happy with your institution and they are not leaving for another one. There are various ways to increase retention rates. But one of the most effective ways is to provide good student support services. If students feel like they have someone to turn to when they need help, they are more likely to stay enrolled in your institution.
Course Success Rates
Another important student success KPI is course success rates. This metric gives you an idea of how many students are able to successfully complete their courses. It’s important to track this number because it will give you an idea of how effective your institution’s teaching methods are.
If a lot of students are failing their courses, it means that something is wrong with the way you are teaching them. There are various ways to calculate course success rates. For example, you can look at the number of students who pass their courses divided by the total number of students. Or you can also look at the number of students who get good grades in their courses. Whatever method you choose, it’s important to track this number closely.
Last but not least in this category, we have Disproportionate Impact. This metric gives you an idea of how your institution is impacting different groups of people.
For example, if you’re looking at the impact of your institution on low-income students, you would track the number of low-income students who are able to graduate from your institution. It’s important to track this number because you want to make sure that your institution is having a positive impact on all groups of people, not just one group. You can consider the disproportionate impact of your institution on different groups of people when you’re making decisions about things like financial aid or admissions.
Admissions and Enrollments Metrics
The next type of metric we’re going to discuss is admissions and enrollment metrics. As the name suggests, these metrics give you an idea of the number of new students. The students who apply to your institution and the number of students who actually enroll in your institution.
There are various admissions and enrollment metrics that you can track. But we’re just going to discuss three of the most important ones below.
The first admissions metric we’re going to discuss is application volume. This metric gives you an idea of the number of students who apply to your institution. It’s important to track this number for various reasons. It can give you an idea of the popularity of your institution.
It can also give you an idea of how effective your marketing and recruitment efforts are. If you’re not getting a lot of applications, it might be time to rethink your marketing strategy.
While your institute might not be popular when it’s new, you can always go for starting awareness campaigns. You should also track the number of applications you get from different groups of people. Along with this, you will get an idea of how well your recruitment efforts are working for different groups of people.
Recruitment Marketing Programs
The next admissions metric is recruitment marketing programs. This metric gives you an idea of how much money you’re spending on marketing and recruitment efforts.
It’s important to track this number because it can give you an idea of whether or not your marketing efforts are effective. If you’re spending a lot of money on marketing but not getting many applications, it might be time to rethink your strategy.
You should also track the number of applications you get from different groups of people. This will give you an idea of which marketing programs are working well and which ones aren’t.
Another important admissions metric is admissions yield. This metric gives you an idea of how many students who are admitted to your institution actually enroll. It’s important to track this number because it can give you an idea of whether or not your institution is attractive to students.
If a lot of students who are admitted to your institution decide not to enroll, you might need to reconsider the criteria. For example, you might need to make your institution more selective or reconsider the type of students you’re admitting.
Faculty and Staff KPIs
For any educational institution, the faculty and staff are the backbones. Without them, it would be impossible to provide quality education to students. That’s why it’s important to track various KPIs that relate to your faculty and staff.
Below, we’re going to discuss three of the most important ones.
Faculty Retention Rate
The first KPI we’re going to discuss is the faculty retention rate. This metric gives you an idea of how many faculty members stay at your institution for more than one year. Various factors can affect this rate.
Institution’s Locality and Cost of Living
The faculty retention rate is usually higher in institutions that are located in areas with a low cost of living. This is because faculty members don’t have to worry about the high cost of living when they’re working at these institutions. Also, the location of the institution can affect how easy it is for faculty members to find jobs.
If an institution is located in a rural area, it might be difficult for faculty members to find jobs outside of the institution. This can lead to them staying at the institution for longer periods of time.
Compensation is another important factor that can affect faculty retention rates. If your institution offers competitive compensation, it’s more likely that faculty members will stay at your institution for longer periods of time.
Another factor that can affect faculty retention rate is an institution’s reputation. If an institution has a good reputation, it will be easier to attract and retain quality faculty members.
Another important factor that might affect faculty retention rate is an institute’s affiliations. If an institute is affiliated with a prestigious organization, it will be easier to attract and retain quality faculty members.
Faculty Recruitment Rate
The next KPI we’re going to discuss is the faculty recruitment rate. This metric gives you an idea of how many new faculty members your institution hires each year. This number can be affected by various factors, such as the reputation of the institution, the size of the institution, and the location of the institution.
If your institution has a good reputation, it will be easier to attract quality faculty members. If your institution is located in a rural area, it might be difficult to attract quality faculty members.
Faculty Satisfaction Rate
This metric gives you an idea of how satisfied your faculty members are with their jobs. Faculty satisfaction can be affected by various factors, such as compensation, workload, and institutional support.
If your institution offers competitive compensation and adequate support, it’s more likely that faculty members stick with their jobs. For example, if your institution offers health insurance and retirement benefits, it’s more likely that faculty members will be satisfied with their jobs.
The last faculty and staff KPI we’re going to discuss is faculty diversity. This metric gives you an idea of how diverse your faculty members are. In today’s contemporary society, it’s important to have a diverse faculty. A diverse faculty can provide different perspectives and life experiences to students. It can also make your institution more attractive to prospective students.
At the same time, you should also be aware of the potential challenges that come with having a diverse faculty. For example, you might have to deal with language barriers and cultural differences.
Facilities and Resources Metrics
The next category of KPIs we’re going to discuss is facilities and resources metrics. This category includes metrics such as classroom size, number of classrooms, and availability of resources.
The first and most important resource for any educational institution is the classroom. This metric will give you an idea of how much space each student has on average. It’s important to have enough space for each student so that they can learn and focus properly. If your average class size is too large, it might be time to consider adding more classrooms or splitting up classes into smaller groups.
Number of Classrooms
This metric is pretty self-explanatory. It will give you an idea of how many classrooms your institution has. If you don’t have enough classrooms for all of your students, it’s going to be a big problem. You might need to consider adding more classrooms. Or if the classrooms have a larger area that is vacant, you could use that space to create more classrooms.
Availability of Resources
The last metric in this category is the availability of resources. This metric will give you an idea of how many resources (books, computers, etc.) your institution has for each student. It’s important to make sure that each student has access to the resources they need in order to learn properly. If you don’t have enough resources for all of your students, you might need to consider buying more or finding a way to get more from donations or other sources.
These are just a few examples of the types of financial metrics and KPIs that you should be aware of if you’re in the Educational Services industry. There are many others that we can guide you to when you hire our professional financial analysts.
Why Should You Hire Oak Business Consultant as Your Educational Service Financial Analysts?
There are many reasons why you should consider professional assistance. The most obvious one is that we can take care of all the research and analysis for you so that you don’t have to. We know where to look for the most relevant data and we have the tools and experience to make sense of it all.
Another reason is that we can help you develop custom financial metrics and KPIs that are specific to your business. This way, you can be sure that you’re measuring the right things and making decisions based on accurate information.
If you’re ready to take your Educational Services business to the next level, contact us today! We’ll be happy to discuss your specific needs and give you a proposal for our services.