Quality AND Profits: Interrogating Student Recruitment through Agents

These are exciting times in the international student recruitment market. This is a time for new winners and losers, new markets emerging and dominant ones stagnating, and new rules are being written. After explosive growth for a decade, Australia let its dominating position slip in 2008. Also, Britain, which became a very attractive destination in the new millennium, enjoying 64% growth in annual student numbers in the years leading up to 2010, is all set to lose the markets because of the muddled and unwelcoming approach of the current government, which seems to regard all International students coming from outside the EU as potential illegal immigrants. Further, the coalition government's on-the-fly policy-making has decidedly hurt Britain's position as a provider of High Quality Higher Education internationally: The absurd categorisation of Higher Education, Further Education and Private Education colleges (a system not readily understood elsewhere in the World) for visa purposes, and the confusion at its public universities regarding fees and places on the wake of funding reforms, created confusion among the aspiring students, who started looking for options elsewhere.

So, suddenly, it is deja vu all over again in the International student market, with new players, Canada and Germany among them, and old and new American universities, trying to pick up the opportunities abandoned by British institutions. Australians are also making an effort to come back in contention, as are different offshore locations, including Malaysia, Hong Kong and even Mauritius, who are promoting themselves as easy countries to live in while pursuing British or American degrees.

In the middle of this churn, the recruitment models are being redefined. The huge growth in the market in the last decade or so, dominated by Australia and Britain, was facilitated by an agency-based recruitment model that the institutions from these countries followed. It was a simple model: The local agents got a fee, usually a share of student fees, for every student they recruited. This model, observers claimed, was instrumental for the success of British and Australian institutions in international student markets. They even suggested that the American institutions, which operated with a direct recruitment model, start following this system to scale up.

However, if one looks closely, it surely appears a bad idea. The agent-based recruitment model shifts the financial risks from the institutions to the agents, but, as the Australian and the British experiences demonstrate, often shifts the compliance risk up the value chain, sending out students without any intent to pursue studies to sponsoring institutions, thereby turning them to conduits of illegal immigration. It is particularly bad in small private institutions in Britain and Australia, as the agents gathered massive clout during the boom years as they earned the money for the colleges and effectively taken over the admission systems of the host institutions, which invited the backlash, in Australia in the form of racial violence, and in Britain in the form of unreasonable regulation, eventually. This also goes on to show that the Agency model in its current form isn't scalable, and the American institutions may not gain anything by abandoning their current systems of recruitment. If anything, they have a lot to lose.

In fact, I would think that the British Higher Education institutions will need to think beyond the agency recruitment model and engage with its target audiences in a more direct way. This may change the cost structure of recruitment, but with technological innovation and fresh thinking, this may not break the bank. Indeed, this may require scale and some small private colleges may not be able to afford this recruitment model at all, but a merger wave is already underway in Britain and further, the change of regulatory regime, from various private sector bodies to Quality Assurance Agency, will accelerate this trend anyway. The costs associated with compliance risks that the agency model creates have become unsustainable, and the only way left is to create a more direct recruitment model.

Indeed, managers at various institutions will look at this closely and come up with various innovative, middle of the way, arrangements. There will be much greater investment in education marketing and student information systems: Many more interesting student fairs, better courses and more facility and services for the students. This will mean much greater efficiencies and transparency for the students, which will lead to better quality education in the end.

So, in summary, the practises in international student recruitment are going to change. Completely. And that will be good.


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