Questions universities should be asking about recruitment strategy

Our U.K. and Irish partners are caught between a rock and a hard place. We’re all unpleasantly familiar with the challenges facing the home market, such as stagnant tuition fees and the impending demographic cliff, coupled with rising costs. Many universities pivoted to recruiting international students to counter insufficient funding at home, but are now facing regulatory and macro-economic challenges stifling overseas markets too.

In response to this landscape, my research team kicked off a project in January designed to help answer the question our partners kept asking us: ‘What can we do if nobody is coming to save us?’ We’ve spoken with contacts at dozens of universities, from those at the executive level to those running recruitment on the ground. We’ve learned a lot so far, and my team is now debating the following research questions.

1. International student recruitment: How much can we control the costs of recruitment?

Our partners report exponential increases in the costs of international student recruitment as the market becomes more competitive.

Firstly, it’s more expensive just to get qualified applicants, despite an increase in applications since the COVID-19 pandemic. Agent fees are rising, and institutions are more reliant on them, with agents bringing in higher percentages of students. Our partners are receiving higher numbers of less-qualified applicants, and admitted students are less likely to convert. This forces our partners to hire more staff and devote more resources to not only source and parse through these applications, but also to convert applicants into enrolled students.

Additionally, many institutions are now in ‘bidding wars’ for international students—using scholarships to compete for attention. Making university more affordable for students is never a bad thing, and being able to offer discounts may be a valuable recruitment tactic. But in our recent research interviews, we’ve increasingly discussed questions such as:

• How do we know that we’re maximising revenue by allocating limited funds to students that actually need it?
• What are institutions’ costs of acquisition for international students (and our recruitment margins)?
• Will we know if we hit a tipping point where we may start losing money on international students (and are some of us already there)?

2. Diversification: How do we know we’ve invested in the right markets?

As our partners face a projected demographic cliff and a less-than-supportive government, they’re looking more closely at the future size and shape of their student bodies.

Lack of data and strategy to place bets on emerging markets

Unsurprisingly, our partners want to know where tomorrow’s international students will come from, as they look to find the next China or India. However, we’ve been surprised to hear that institutions are less concerned with the inherent risk in relying on specific student markets to make up a disproportionate amount of revenue. They know they need to avoid ‘overreliance,’ but aren’t sure what a healthy, diversified revenue portfolio looks like, with KPIs or built-in ‘trigger points.’ Interviewees consider a wide range of anywhere between 25% to 50% revenue dependency on a single market as being ‘too risky.’

Here at EAB, we’re developing early concepts for data tools to better help our partners identify where their next international students might come from, with an eye toward market diversification.

No easy answers in LLE or distance learning

Although many of our partners see distance education as another way to recruit international students and approach diversification, fewer HE leaders are exploring flexible and alternative course options aimed at home students. Those that are see an opportunity to meet the needs of working adults and other students who may seek a non-traditional experience. They point to shifting labour market demand and government initiatives like the Lifelong Learning Entitlement (LLE) as further evidence that these investments will align with the changing role of higher education in coming decades.

However, others aren’t convinced that there’s demand for flexible learning and argue that the traditional education model is what made the U.K. a global HE leader in the first place. They also point out that the LLE lacks any real guidance for universities and note internal barriers to developing a flexible and modular learning portfolio.

As a former international student in the U.K. and someone who’s been pursuing some micro-credentials on her own, I’m biased on both fronts, but we’d love to hear from you.

3. Student numbers planning: Who gets a say, and are we even measuring the right thing?

As both the domestic and international student recruitment markets get more competitive, and applicant behaviour becomes harder to predict, universities are reassessing how they set yearly and longer-term student number targets.

There’s no clear trend toward centralisation OR decentralisation of the planning process; institutions just know that the status quo isn’t working.

Centralisation

Some partners report that tighter budgets and lower conversion rates necessitate holding central contingency funds and more university-wide discussions around recruitment strategy. In some cases, central finance and planning teams serve as a counterweight of sorts to overly optimistic academic leaders.

Decentralisation

At the same time, others are moving to limit their finance teams’ involvement in the student numbers planning process or even decentralise the process altogether. Our partners point out the dangers of having those less familiar with academic considerations set recruitment strategy, warning of over-crowded courses and increased numbers of students who may be better served elsewhere.

Regardless of structure, my team is wondering: should we even be calling it ‘numbers’ planning, if we’re focused on revenue? Does that terminology inherently measure the wrong metric?