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Bang for buck & ROI in recruitment: do universities know their costs?

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"Not having a finger on the pulse of who you work with and how is tantamount to neglect"

The article struck me not only for the glaring headline but also how this topic has been in and around the thought of many an internationalist in recent years. Having been immersed in the global education landscape for some 30 years and possessing experience of both sides of the agent/provider partnership, being director at a major student recruitment agent and working at senior level in and with diverse types of education providers, it has always been a major part of my thinking.

Where is the balance in the use of agents and how are those relationships effectively managed?

A comment on the article suggested that institutions may want to compare or rate themselves using this data, but that would be like comparing apples with oranges. Each institution is different, what works for one may not work for another.

If the strategy is to have a business model whereby the bottom line shows a healthy gain, then institutions will have worked out their cost of acquisition against income, won’t they?

Some I have worked with have little idea what their costs are in relation to student recruitment, home or international, or their ROI & gearing ratios. Institutions should not forget about recruitment costs such as scholarships (centralised/departmentalised), agents (commission/retainers/bonuses), staff (salaries/time/in country presence/academic) & others that are not always apparent. Do universities make as much as they think they do or is it just about income, with costs sitting elsewhere?

Sometimes agent costs sit outside of the international recruitment budget and are possibly not considered when looking at success/failure, however that is quantified. We conducted such deep analysis at a university I worked with, focussing on five key international markets. The results were remarkably interesting showing which markets had the best bang for our buck & ROI, but the university chose to ignore the analysis as it didn’t match their own strategy.

In the article, reference is made to 10% being the commission norm, but I would reason that that has not been the norm for some time, certainly not in the direct provider/agent contract terms. This possibly exists in sub-agency networks & the aggregator model, but I would suggest that most contracts will be incentivisation based, upon volume/diversity/range with 10% being the basic.

In my view in order to have a sustainable and mid-/long-term strategy relying so heavily on agents is risky.

I can imagine certain providers having short-term plans needing quick returns and filling campus spaces to enable income to be invested in other areas, but with the losing of a sponsor’s licence being so high on the risk register, managing agent relationships, knowing who your agents are and what they are doing is paramount; not having a finger on the pulse of who you work with and how is tantamount to neglect.

“At the moment agents are certainly an important part of that mix for most universities, but the portfolio should always be balanced”

That of course raises the question of aggregators with their model of thousands of agents within their network, but if an institution has decided to use that model, I am sure they will have done their homework first and asked the right questions. Again, my view is that the relationship with your agents is a strategic partnership, and a university should be managing that relationship with as much importance as, say, a research partner, after all universities live and die on reputation and that can be blown away quickly by the negative business practice of unscrupulous partners.

Having a sustainable mid-/long-term recruitment strategy must include a balanced portfolio of recruitment channels. At the moment agents are certainly an important part of that mix for most universities, but the portfolio should always be balanced and include such as direct relationships with potential students, pathway pipelines, partnerships with international schools (very much overlooked especially onshore), academic partnership activities including direct relationships for progression/articulation pathways, collaborating with alumni, & possibly venturing into the online/blended space.

For me, putting so much emphasis and reliance on agents shows a lack of creativity, knowledge and experience and in some ways can smack of desperation. Maybe the bigger question should be whether agents are needed, and if universities should explore other models, but that article is for another day!


About the author: Matthew Hornshaw has his own consultancy company, MGH Educonsult, and is a global education specialist and leader with more than 30 years of experience in a range of diverse roles such as Director of Business Development at a major student recruitment agency, a much sought-after consultant for individual projects and is often called in by universities to undertake Interim roles in the global recruitment and partnership spaces.

Matthew has specific expertise in change management, international student recruitment, TNE, institutional partnership development, and delivery of in-country services that significantly impact university brand profile. With a large and diverse global contact book and a successful track-record of being a go to specialist for universities, colleges or schools venturing into the global marketplace or for those in need of a step change.

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