An ethical approach to commissions-based recruitment

uwn ashwill west

Below is the unabridged version of an article with the above title that Eddie West and I wrote for University World News (UWN).  Follow this link to read that version.

Incentive-Based Compensation & International Student Recruitment: Is There a Better Way?  By Mark A. Ashwill & Eddie West

The agent issue in the US is reminiscent of those trick candles that delight children and some adults who are children at heart. You blow them out and they continue to ignite themselves – like magic! – using a fuse similar to those used in dynamite sticks.

Compared with their counterparts in Australia and the UK, US universities are relative latecomers to the wild and woolly world of commissions-based international student recruitment. In recent years steps have been undertaken to professionalize practice in the States and equip institutions with the tools they need to engage recruitment agents responsibly.

But while those efforts represent progress, they clearly haven’t assuaged everyone’s concerns about the well-being of students who are, or should be after all, front and center for those of us involved in educational advising and international student recruitment.

Last year, the Middle States Commission on Higher Education (MSCHE) rekindled the controversy surrounding the use of agents in a very public fashion. The regional accreditor released a draft policy that sought to stipulate that MSCHE-accredited institutions would be prohibited from paying incentive compensation for the recruitment of any student, domestic and international student alike. Following a period of public comment MSCHE agreed to conduct additional research, including a legal review of the draft policy, before taking further action.

As it turns out, MSCHE quietly decided to follow federal regulations that prohibit incentive compensation for the recruitment of domestic students but allow it when it comes to “foreign students residing in foreign countries who are not eligible” for Title IV student financial assistance; see 34 CFR §668.14 (b) (22) (i) (A).  In other words, the Commission backed down, deciding to hang its hat on the “foreign student carve-out”, or exception, to the incentive compensation rule, essentially caving in to the demands of commission-based international student recruitment supporters.

MSCHE’s decision to permit the institutions in its purview to continue using per-capita commissions for the recruitment of international students parallels the road chosen by the National Association for College Admission Counseling (NACAC) in 2013. After a period of extensive deliberation, the association concluded that “while NACAC should continue to be very cognizant of the potential effects of commissioned recruiting, it should also address the changing trends in international recruitment and lift the ban in favor of a best practice stance.”

The Fatal Flaw in Current Practice

The fatal flaw in commissioned recruitment is that most agents prioritize their partner schools’ interests over those of the students and parents they advise.  This means that most guide or, in many cases, drive students to their partner schools because of the gold (commission) at the end of the rainbow (enrollment process).  Moreover, most agents represent many partner schools, each of which can pay varied commission amounts. Remuneration can be as little as a few hundred dollars, or many thousands. And so the brute economic logic is that opportunistic commissions payouts vs. best fit often drive student advisement. (Many agents also “double dip,” piggybacking off of this approach by also charging a fee to parents.)

Bonus incentives are also common. A rhetorical question to consider: Agent A has a contract with University B that promises $1,000 per referral for the first 9 students thus enrolled in an academic year, but $1,500 per enrollment of student numbers 10 through 20. Will prospective student #10 receive the same integrity of advice as student #9?  The unfortunate answer is clear.

Indeed, instead of customers as queen or king whose goals are paramount, students and their parents, the key decision-makers, are treated as pawns in a mostly predetermined and opaque process over which they have little control and in which profit frequently trumps a commitment to serving their best interests.

This is a dilemma that advocates of agency-based recruitment have yet to resolve. The blithe assumption is that concerns about unethical business practices are being adequately addressed, despite widespread evidence to the contrary. In fact, some of the most vocal opponents of the Middle States’ draft policy were those who have a vested financial interest in this business practice, hardly a qualification for credibility.

In the spirit of “it takes two to tango,” it’s important to point out that there are educational institutions, albeit a small minority, that are not discerning about which education agents they work with as long as their agents produce.  For them it’s all about “showing them the students.”

Since such agents recruit students in a way that puts partner schools’ interests first, students are not always well-informed about the admitting institution and therefore not always pleased with what they discover once enrolled. This can result in lackluster student retention and negative word-of-mouth, which reflect poorly on both the school and the agent. Those institutional officials who choose to work with unethical education agents are hardly better than their partners in crime.

Need for a New Way

Those who have attempted to address the vexing problems associated with commissioned recruitment deserve credit for professionalizing practice, mitigating risk, and adding a dose of transparency to an activity so often shrouded in secrecy. But efforts thus far have simultaneously served to normalize commissioned recruitment and stifle further discussion, which raises the obvious question: Is that a good thing for students?  We don’t believe it is.

Capstone Vietnam, a full-service educational consulting company, implemented a unique approach that clearly recognizes students and parents as the primary clients in the educational advising process.  Advisers do not pressure students to attend partner schools simply because they pay a per head commission. Rather, they create a list of best fit schools based on student and parent interests, goals, preferences, and budget.  If a student ends up attending a commission-paying partner school, the advising fee is refunded to the parents. If s/he attends a non-partner institution, the company retains the advising fee.

While this approach makes sense from an ethical and financial perspective, are there other agency-based recruitment models that also do a good, and perhaps even better, job of ensuring that students and their families are well-served, by better aligning their interests with those of agents?

Imagine a scenario where, instead of an agency netting different commission payouts based on which school or program a student enrolls in – the prevailing, ethically fraught industry standard – the agency commits to earning a fixed, predetermined amount of money, regardless of which institution the student attends.

Let’s say for example that amount is $1,000 for assisting a student who wishes to attend a US community college. The agency explains to students, families and prospective partner colleges alike that $1,000 is their set fee for helping a student apply and enroll. The student will pay the agency a $1,000 advising fee if they end up attending a community college that isn’t one of the agency’s partners, as with the Capstone model.

On the other hand, if the student enrolls at one of the agency’s partner community colleges and that partner’s standard commission is $1,000, then the agency receives their $1,000 payment directly from the college. In this case, the family receives a refund of the fee they’ve already paid, also an example of the Capstone model.

Of course, this is an oversimplification. It’s the nature of international student recruitment for institutions and agencies alike to seek competitive advantage. Schools routinely pay more, or less, than $1,000 per student enrollment.  They and their agency partners require autonomy with respect to commissions decisions. With this model, they still have it.

Community colleges that wish to pay, say, $1,500 per enrollment can do so, but here’s the rub: the agency will retain their set $1,000 fee, and the excess $500 is given to the student. The same logic applies no matter the amount above $1,000.

Conversely, if the college pays less than $1,000, the student pays the difference. For example: the college pays $600 per enrollment, in which case the family pays $400 as a service fee. Think of this scenario as ethical double dipping.

This model eliminates the financial secrecy inherent in commissioned recruitment as it’s practiced today, because the agency’s earnings for helping a given student are transparent. It also eliminates the incentive for agents to steer students to poor fit environments on the basis of profitable hidden commission payments, the fundamental flaw with current practice.  The agency earns the same amount no matter where the student enrolls.

It also preserves an institution’s autonomy to incentivize outcomes to the extent they wish. Except, instead of the agent pocketing an entire commission payout, any additional financial benefit accrues directly to students. Think of this as akin to the widespread practice of tuition discounting, often packaged as merit scholarships.

We don’t presume this model is immune to criticism. As the saying goes, the devil is in the details. Established agencies may resist change to the status quo because the tradition of secret, variable commissions has proven so lucrative for them. Others will point out that it can take considerably more time to assist a student with a graduate school application than it does for short-term ESL study, for example, so charging a uniform fee across the board may not be practical.  

But such problems and the fees to be charged can be solved by experimentation in the marketplace. What agencies might sacrifice in this shift toward greater transparency may well be compensated with an increase in business. After all, it stands to reason that families will gravitate towards agencies committed to fair practice and who also help them obtain a tuition discount as a bonus.

Meanwhile, institutions that support this approach can recruit fairly, transparently, and without the burden of reputational taint that dogs traditional commissioned-based recruitment, of which the MSCHE news is only the latest – and surely not the last – reminder. The ideal end result is a triple win for students and parents, educational institutions, and education agents.

Mark A. Ashwill, Ph.D. is managing director of Capstone Vietnam, a full-service educational consulting company with offices in Hanoi and Ho Chi Minh City (HCMC) in Viet Nam. Capstone is the only company in Viet Nam, and possibly the world, that works exclusively with regionally accredited colleges and universities in the United States, and officially accredited institutions in other countries.  Its unique approach to educational advising treats students and parents as clients, not partner institutions. He blogs at An International Educator in Viet Nam.

Eddie West is Executive Director of International Programs at UC Berkeley Extension. Previously, he served as Director of International Initiatives at the National Association for College Admission Counseling (NACAC), and before that led internationalization activities for the Ohlone Community College District.

Shalom (שלום), MAA

 

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Working with Education Agents: A View from Vietnam

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Image courtesy of NAFSA

Below are a couple of excerpts from a blog post I wrote at the invitation of NAFSA’s International Enrollment Management (IEM) Knowledge Community.  

While there are some indications that growing numbers of students, who are better informed and more empowered than ever, are applying directly to foreign educational institutions – a trend that we should all encourage because it enables colleagues from admitting institutions to exercise more control over the application process – Vietnam, like most sending countries, is still very much an agent-driven market.

Given this reality and the fact that competition is fiercer than ever, colleagues need to develop a long-term and diversified strategy that includes a variety of non-commission-based recruitment tools and techniques, both digital and offline, in addition to developing a quality and ethical agent network.  Working with education agents should be just one of many tools in an institution’s recruitment toolbox. If it’s the only one, your recruitment efforts are doomed to fail in competitive markets.

Here’s a link to the original post, if would like to read it in its entirety on the NAFSA website.  

Peace, MAA

In Country Representatives: A Tale of Two Models

intl student recruitmentA growing number of educational institutions are turning to in country, including regional, representatives to assist them with international student recruitment.  While this option obviously costs more than other recruitment tools and techniques because it includes the cost of a local salary, benefits (?), and other expenses, including travel and marketing, it can potentially be more productive.  It all depends on your representative, her/his skill, network, and a variety of market conditions. 

There are basically two models from which to choose:

An Independent Consultant:  You hire someone, ideally, a host country national who speaks the language, perhaps has studied overseas, and has a good education-related network.  Your rep essentially works at home, which saves your institution money.  You pay her/him directly via international wire transfer.  Sounds simple, right?  

An Outsourced Consultant:  A host country national who is employed by a legally licensed company but who represents your institution exclusively.  The Viet Nam-based employer assumes legal responsibility for your representative and handles payroll and other administrative issues, in addition to providing “supervision lite”, and offering strategic advice.

The main difference between the two models is that the first is technically illegal while the second is legal.  Regarding the former:  is anyone ever going to call you on it?  Probably not but they could – either within Viet Nam or from abroad.    

The problem is that foreign entities are not permitted to operate in Viet Nam without an official (read legal) presence, i.e., a license.  Consider this food for thought for those who currently employ an independent consultant from afar, or are considering doing so.

Peace, MAA

EducationUSA Fairs: The Importance of In Country Follow-Up

new edusa logoEducationUSA fairs in Viet Nam and other countries can be a cost-effective way to recruit students.  The location of the fairs and the network of the local EducationUSA office that organizes the events determine who comes, more or less. 

As I’ve written before, sometimes the goals of the US State Department and recruiters diverge.  For example, one of the goals of the former is outreach and the exercise of soft power.  This means that they occasionally organize fairs in locations that are not promising in terms of ability to pay and therefore realistic interest in study in the USA. 

The role of EducationUSA is simple.  Organize an event that offers decent quantity and, more importantly, quality attendance.  What about post-fair follow-up?  Obviously, EdUSA advisers promote study in the USA as a whole and not individual institutions. 

While US colleagues follow up in English, that is not enough.  They need to have someone contact students in Vietnamese, starting with the “hot leads,” via email, telephone and, if possible, Facebook, the #2 website in Viet Nam.  This will greatly increase the chances of converting leads into applications and admits. This can be done by trusted education agents or other in country representatives.  

Peace, MAA

The Art & Science of Creating Good Videos

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Vietnamese get most of their information from online sources, including social media, primarily Facebook.  They also watch a lot of video, 2 hours, 43 minutes a day, to be precise, according to the results of the annual We Are Social and Hootsuite update.  As a result, YouTube ranks 4th among all websites in Viet Nam, according to SimilarWeb.  It is for this reason that videos should be an integral part of any digital marketing campaign. 

I see a lot of online videos intended to promote various educational institutions but not very many quality ones that young people, i.e., potential international students, would actually watch.  In all honesty, most fall into the bad and ugly categories.  Here are two examples.  It would be best to illustrate my points by showing you real videos but that’s not possible, for obvious reasons, the most important of which I would not want to embarrass the offending parties.

Low quality content:  A lot of videos I see are of the talking head variety.  Either students are sitting or standing in one location talking about their school and related experiences, or someone is interviewing them using a talk show format. 

In one video, the students being interviewed looked like prisoners, sitting with hands folder, and dutifully answering question after question.  In another, a student was obviously reading off of a script and looking into the camera with the occasional nervous smile.  Not convincing, invariably boring and, sometimes, painful, to watch. 

Vietnamese students will click on the link, watch for a second or two, and then quickly move elsewhere in search of more inspirational, educational, and/or meaningful content. 

Poor sound quality:  Content aside, many videos are not professional or even semi-professional.  Either staff or students are using substandard equipment and do not have experience making videos for the demographic in question.  It’s like with photography.  Everyone with a smartphone is a “photographer” but very few know how to take good photos worth looking at. 

nas dailyNas Daily is an example from Facebook that I often share with colleagues.  His daily one-minute videos are crisp, fast-paced, and a pleasure to watch and listen to with commentary, interviews, and background music.   He has over 5.8 million followers and over a billion views, which means he must be doing something right.  The point is his videos are worth watching. 

Peace, MAA

An Ode to International Student Recruiters

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One of the privileges and pleasures of my work is watching colleagues connect with young Vietnamese who are interested in overseas study, be it at a fair, coffee talk, info session, or individual meeting at a hotel. 

Traveling to Viet Nam and other sending countries is still one of the most effective ways to recruit students, especially if the recruiter is good, which most are.  Sitting at home because of budgetary constraints or other reasons and relying solely on armchair techniques is not going to get the job done, especially in competitive markets.

From parents’ and students’ perspective, it’s a way to put a face to an institution, someone they can like, respect, and trust.  Someone who will follow up, be responsive to inquiries via email, Facebook, and chat apps, and stay in touch. 

Good recruiters enjoy their work.  You can hear it in their conversations and see it in their smiles and body language.  So can students and parents.  Those who do not take pleasure in their work seem (are?) bored and disinterested.  It’s obvious their hearts aren’t in it.  Fortunately, these individuals are few and far between.

IMG_4492As someone who helps create opportunities for colleagues to meet with Vietnamese students and parents, I have the utmost respect for my colleagues who do this important work and know how hard they work.  While the life of an international recruiter may seem glamorous to the folks back home, including exotic pics posted on Facebook, and it does have its rewards, it is time away from loved ones and not enough time for proper rest and relaxation.  

In addition, Viet Nam’s evening is their morning “back home”, i.e., for those from North America, which means they have additional work to complete, including emails and online chats with colleagues.

US colleagues, especially in higher education, have the added burden of essentially trying to counteract the statements, proposals, and policies of their own government, now more than ever.  Rather than providing support or not doing anything at all, the US government, through President Trump and his supporters, is continuously setting up road blocks that they have to get around or hoops they have to jump through.  The end results are huge amounts of wasted energy and growing frustration.

IMG_4496The main and immediate job-related reward for recruiters is admitting a new Vietnamese or other international student who gets a visa and arrives on campus ready to begin her or his new academic and cross-cultural adventure.  A potential long-term reward is the personal, academic, and professional transformation that many young people undergo after a rewarding and substantive international experience.

Peace, MAA

How Many Students Will You Send Us?

globeI occasionally receive inquiries from colleagues asking me how many students will I refer to their institutions by a certain term, i.e., semester or quarter.  The assumption behind the question is that the company I work for, Capstone Vietnam, a full-service educational consulting company, follows the traditional agent model of student recruitment. 

In fact, we have our own unique model that views students and parents as clients not partner institutions that happen to pay a per head commission.  This means we don’t drive, or pressure, students to attend a partner school but rather look for “best fit” schools, regardless of their status.

If a student ends up attending a partner institution, we refund our fee to the parents because we receive a commission later.  If s/he enrolls in a non-partner school, we retain the fee because that’s how we get paid for the service.  It’s an ethical approach to educational advising that also makes financial sense. 

That’s part of the answer.

educated consumerAnother is that growing numbers of Vietnamese students are applying directly to certain types of educational institutions, thereby bypassing educational consulting companies.  This is a positive trend that I applaud.  (It includes students who attend Capstone events.)  More power to them, in my opinion.  It reminds me of a slogan from a now defunct US discount retail clothing store chain, SYMS, that was ingrained in my memory, thanks to persistent and pervasive marketing:  An Educated Consumer is our Best Customer

MAA