THE CURRENT GLOBAL crisis is strongly affecting the higher education industry, and nowhere is this more evident than in international student recruitment. The worldwide lockdown has thrown management education into uncertainty, especially as it faces questions about the future of international student mobility, starting with the autumn 2020 intake.
This past May and July, the two of us served as panelists for a series of webinars organized by Studyportals, XOLAS, the Global Business School Network, EFMD, and other organizations. Other panelists ranged from Andrew Jack, global education editor of Financial Times to Sanjeev Khagram, dean of Thunderbird School of Global Management at Arizona State University. In these conversations, we sought to answer several pressing questions that higher education institutions face today:
- How is the global landscape for student recruitment changing?
- What are the trends in international student recruitment, program development, and market positioning post-corona?
- What are new strategies that business schools can use to mitigate risk, while they maintain high-quality admissions?
- How can business schools compete in a changing market that is driven by new political and economic paradigms?
THE CHANGING LANDSCAPE FOR INTERNATIONAL STUDENT RECRUITMENT
Soon after the outbreak commenced in China, Australia closed its borders to Chinese students who were supposed to have started their academic year in February and March; this decision was followed by a complete closure for all international travelers into Australia for a period of six months. This, of course, had a major impact on the recruitment and enrollment of international students in Australia. As the virus spread, English test centers were closed and travel restrictions were imposed that barred students and staff from traveling abroad. Soon after, university campuses around the world began closing their campuses and switching their teaching to online. The impact of the pandemic quickly highlighted the fact that too many schools depended too heavily on a limited number of source countries, China and India in particular.
According to an ongoing survey by Studyportals, at the end of March, 35 percent of the respondents indicated that they were going to change their plans to study abroad. That number grew to 40 percent by the end of May (see Figure 1 below). In short, the pandemic has created a lot of uncertainty about the future of international student recruitment and, consequently, its financial impact.
Figure 1: A comparison of students’ intentions to change their study plans due to COVID-19, in March 2020 and May 2020.
With the stock markets crashing in March and the global economy going into a recession, the big question is how big the decline in international student enrollments will be in the fall of 2020 and beyond. Estimates range from a decrease of 15 percent to a decrease of 80 percent, depending on whom one asks.
TRENDS IN STUDENT RECRUITMENT, PROGRAM DEVELOPMENT, AND MARKET POSITIONING
What general trends can be observed because of COVID-19 and what do they mean for the (near) future? The number of pageviews that Studyportals tracked on its various websites dropped significantly. They went from being 10 percent higher in the last week of February compared to the same time period in 2019, to being down by almost 35 percent at the end of March compared to the same time last year. Figure 2 combines Studyportals’ data on the interest in on-campus programs in some major destination countries since the outbreak of the coronavirus in early March. Only France and New Zealand have recovered (and have seen a slight increases) since March 2020 compared to the same time in 2019, while Canada has almost recovered.
Figure 2: Changes in student interest in studying in top-destination countries, 2019 compared to 2020.
We have seen similar changes in student interest in on-campus programs in business and management in most countries. However, a few trends stand out. First, by July, the interest in business programs in Canada was up by 18 percent; and in New Zealand, that interest was up by 41 percent. In Spain, interest is still down compared to 2019, but only by 12 percent; this indicates that it has recovered better than other countries. Interestingly, while the overall demand among students to study in France is up 14 percent compared to 2019, the demand for business programs in France is down 22 percent.
Most schools will continue to observe social distancing for the fall semester, and many universities will continue to teach most of their courses at least partially online. If the new normal is online, how can business schools remain relevant?
At the July webinar organized by XOLAS, Andrea Longaretti, global head of recruitment and admissions at IE University in Madrid, Spain, talked about IE’s “liquid learning” approach when referring to a hybrid or blended model of online and face-to-face teaching. He explained that IE was using this liquid approach in combination with a personalized and flexible curriculum that offered “glocal” experiences and networking opportunities. “As long as institutions provide students with the ability to achieve their goals, it will pay off,” Longaretti emphasized. “Higher fees must be aligned with the development of career services and career opportunities.”
Similarly, during the May webinar organized by XOLAS and Studyportals, Sanjeev Kaghram of Thunderbird School of Global Management, part of Arizona State University in Glendale, Arizona, stated that Thunderbird will offer more flexibility by allowing students to choose different starting dates. Students at Thunderbird also will be able to start their degree programs online and switch to on-campus instruction when it is safe to do so, or switch from on-campus to virtual instruction if there is another outbreak of the virus. Because Thunderbird expects about 50 percent of its students to matriculate on-campus, its administrators have set up what they call “digitally augmented classrooms” equipped with video cameras and microphones. This technology will allow half the students to be in the classroom and the other half to attend classes simultaneously via Zoom.
Similarly, business schools are continuously being challenged on the programs and content they offer, which was true even before the pandemic. Kaghram mentioned how Thunderbird changed its MBA into a master of global management. Looking at Studyportals data on international demand and the supply of degree programs in business, a few subject areas stand out as having great market opportunities, with high demand and little supply: supply chain management and logistics, business intelligence and analytics (especially for on-campus master’s programs), and entrepreneurship and innovation management (for online master’s programs). Supply chain management and logistics and transport management offer great opportunities for undergraduate on-campus programs.
HOW CAN BUSINESS SCHOOLS COMPETE IN A CHANGING MARKET?
With the outbreak limiting international travel and delaying commencements at schools around the world, university administrators have started asking some very important questions: Is our reliance on international students from one or two countries wise? If not from China, from what other countries should we recruit? What can b-schools do to become less reliant on one source country for their international student enrollments?
While no other country can fully replace China as a source of international students, business schools will have to balance the right mix of strategies that consider changing demographics, growing populations, student purchasing power, economic growth, demand for highly skilled workers, local shortages in education capacity, the appeal of their countries as destinations, and factors that drive individuals to study abroad. Schools that want to build more resilient long-term strategies should take trends in all of these areas into account if they want to accelerate their quest for diversification.
In addition, business schools that want to do more to mitigate their risks need to diversify their offerings across five dimensions: geography, academic relevance, program offering, marketing, and financial resiliency.
Geography. Even though most b-schools want diversity on campus, more often than not marketers tend to look at the low-hanging fruits and the easiest markets, which bring the largest volumes of students. This strategy may reduce costs, but it also increases the risks as it can make a school over-reliant on certain markets. For this reason, it is wise to find a good balance between cost reduction and risk mitigation. As a guideline, no nationality should make up more than 15 percent of a business school’s total international student population.
Academic Relevance. Schools should ensure that all departments offer degree courses that have relevance and appeal to international students. That means that a b-school should rely not only on highly popular degree programs such as MBAs and master’s programs in international business, but also on subjects with future growth potential such as business intelligence and supply chain management.
Product Offering. Diversification in this dimension is about the type of programs a university offers: summer school, undergraduate, postgraduate, on-campus, and online programs. By diversifying across these categories in ways that make sense for their objectives, schools can better manage risks by countering downward trends in one area with upward trends in another.
Marketing. B-school marketers would be well-advised to develop integrated marketing communications strategies, which simply means that they should distribute their marketing messages across different channels: online and offline, at education fairs, and with educational agents. This outreach should be directed not only to students, but also to alumni, corporate partners, and partner universities. They should take advantage of a variety of online platforms, from education portals to social media networks to search engine marketing.
Financial Resiliency. The fifth dimension of diversification is to “defend” the institution against economic and financial downfall. B-school administrators should make sure that their schools, and where applicable their universities, build up sufficient reserves to deal with fluctuations in student demand from a specific country or for a particular subject area.
WHAT DOES THE FUTURE HOLD?
In conclusion, while degree applications are up for many schools in 2020 compared to 2019, the overall picture remains mixed. There is a lot of nervousness in the system, as applicants respond strongly and quickly to the news flow on COVID-19. B-schools in “safe” regions will have an advantage. Emerging visa restrictions and other mobility barriers in areas such as the United States are likely to generate windfall gains for European and Asian schools in the short-term. Marketing and admission cycles are widening and are becoming more aligned across countries, which will make it easier for schools to achieve a more balanced student intake mix. Flexibility is key in operations and in student contracting.
In addition, b-schools need to respond to students’ growing needs for support—such as extracurricular help, engagement with companies, and funding to help them bridge financial shortfalls—in an adequate manner. These responses should be personalized and timely, as students and applicants are benchmarking schools in this respect more than ever. In this context, business schools and higher education institutions in general are facing large challenges. Perhaps the biggest hurdles schools will have to overcome include changing student demographics, technology-driven disruptions in teaching and learning, rising financial pressures, and heightened international competition. These challenges translate into expectations among institutional stakeholders that are constantly shifting and often difficult to fulfill.
In this context, Studyportals and XOLAS offer business schools and universities strategic support in benchmarking and data analytics by matching their institutional strengths with real-time international student interest. XOLAS and Studyportals develop metrics and data analytics solutions that help our clients rationalize their decision making and enrich their external communication. In addition, we produce solutions that link operational data to relevant performance metrics and help schools acquire and convert data into relevant communication for external stakeholders.
We consider our emerging portfolio of business intelligence tools as a primary driver of our consultancy activities. The core objective is to translate the outcomes of substantial market analyses and benchmarking into actionable recommendations. Then, we assist schools in linking those recommendations to their institutional strategies and decision making. Together, Studyportals and XOLAS help business school leaders answer the most relevant questions and develop successful ways to enhance and promote the internationalization of their institutions.
In this way, schools can more successfully navigate their post-pandemic future. How well they successfully mitigate risk will depend on their ability to focus their recruitment on well-chosen target markets, improve their faculty and programs, offer sufficient student support, and maintain their student quality.
Mathias Falkenstein is managing partner at XOLAS, a higher education consulting firm based in Berlin, Germany. XOLAS assists universities and business schools globally in designing and implementing institutional strategies and change management. Falkenstein also is executive policy advisor at LUISS Business School in Rome, Italy, and a fellow at the University of Bath’s International Centre for Higher Education Management in the United Kingdom. Thijs van Vugt is the director of analytics and consulting at Studyportals, an international platform that enables students to compare study options across international borders. He also is a partner of iE&D Solutions ABV, an international education consultancy firm based in the Netherlands.