Like many countries, the UAE is considering scenarios where distance learning is extended as the only or the dominant teaching method in the new academic year, 2020-2021. Many schools and universities that took emergency measures to launch distance learning with the onset of COVID-19 may need to rebuild their programs for the long haul. To succeed in this enormous undertaking, these programs need to meet the needs of students, teachers, parents and regulators. The financial and organizational impact of establishing a robust distance learning program can be quite taxing for any institution. Schools and universities have a better chance of success by planning for multiple scenarios and assessing impact on costs and liquidity.
In this environment, schools need to reassess their expenses and prepare for different scenarios
With the possibility of COVID-19 measures persisting into 2021 and distance learning becoming the norm, every expense line in a school’s budget will change drastically. If your school has not done so already, then take time to define at least three possible scenarios:
- 100% online learning continues until the end of the 2020-2021 academic year
- Combination of part online and part classroom learning
- 100% online learning for the first term then moving to classroom in early 2021
Once you’ve identified possible scenarios, estimate the number of students and new fee structures to calculate total revenues for each scenario. You will need this information to put together a 12-month cashflow forecast. Consider how the following expenses will be impacted by each scenario and update your forecasts accordingly:
Teaching Staff – Unfortunately, some schools in the UAE already let go of staff or cut salaries. Staff compensation is, by far, the biggest expense for any school which makes it an obvious target for spending cuts. Such cuts come at a high social and strategic cost. I would argue that schools, instead, need to do everything they can to retain talent and to keep them motivated if they are to survive beyond this crisis. Some schools will need fewer staff members if they lose more students, but others may require more. They will need to hire teachers with new skills or to increase training for current staff. Think about your school’s future – do you want to shut down, survive or grow? Then answer these questions based on the scenarios you identified:
- How will staff numbers change?
- Will you need new roles to support a sustainable distance learning program?
- How will this impact recruitment costs?
- What will salary structures look like?
- What kind of staff training will you need to invest in?
Administrative services (accounting, registration, technical support, payroll, etc.) –
- How will administrative workload change with each scenario?
- Will staff work from school or home?
- Should you outsource these services?
Facility management (cleaning, maintenance, utilities, waste) –
- What kind of enhanced disinfection service and specialized cleaning supplies will you need?
- How will costs be impacted by requirements for social distancing, smaller classes, and staggered attendance schedules?
- How are your vendors’ businesses faring and will they survive the crisis?
- Will you need more flexible terms and conditions in contracts?
Catering and bus services –
- Will the same services be needed?
- How will a staggered attendance schedule impact these services?
- If they are outsourced, what are your contractual obligations, and do you need to renegotiate them?
Office and classroom supplies –
- How will volumes be impacted by each scenario?
- Are there any supplies that will no longer be needed? Or new items that need to be added?
- Will you need to deliver supplies to teacher or student homes?
Photocopy and print –
IT and telecommunications – If your current distance learning tools are “interim” solutions designed to last only a few months, then you may need to acquire new software or upgrade licenses.
- Will this require technical retraining or certification for your staff?
- If you were receiving free software tools, will your vendors continue to provide this support?
- Do you need to host your own tools in-house or use cloud services?
- What new infrastructure costs do you need to consider?
- Should you outsource IT services?
- Will you need to provide any IT tools to teachers or students at home?
Finally, Are there other regulatory requirements or guidelines that you need to consider in your planning, e.g. UNESCO Education Response for School Reopening?
How will they impact your expenses and cashflow?
In It Together
As the situation evolves revisit your alternative scenarios and keep them updated. Your cashflow forecasts will help identify liquidity gaps and risks, but also possible opportunities for savings or reinvestment. Armed with this information you can prepare for the worst and you can engage in a constructive dialog with your stakeholders.
Engage your board or owners and get their backing for your plans. Help them with their own scenario planning.
Keep your employees informed and help them understand the different scenarios – you’ll be surprised by how this empowers them to help the entire organization and increases your chances of success.
Talk to your vendors and suppliers about the new norm and how your service agreements may need to change. Don’t assume that contracts are set in stone; almost anything is open to negotiation, especially in the current crisis. Find solutions that work for both parties and that help both your businesses survive.
Proactively reach out to parents and show them how you’re using tuition fees to keep their children safe, highly educated, and well-prepared for an everchanging future.
Hang in there and reach out for support if you need it. It’s not easy, but we’ll always value a great education for our children. It’ll just look different than what we’re used to.
About the Author: Hatem Mahdy, from straightforward continuous improvement and efficiency projects to more complex organizational development interventions, Hatem partners with his clients on a rewarding journey of exploration and learning in pursuit of sustainable strategic outcomes.