Benchmarking International Operations of Australian TAFE Systems and Institutes

Transcription

1 Benchmarking International Operations of Australian TAFE Systems and Institutes Mr Alan Olsen, Director, Strategy Policy and Research in Education Limited, Hong Kong Special Administrative Region of China Abstract Alan Olsen, Director, SPRE Limited in the Hong Kong Special Administrative Region of China, will present findings from the study TAFE Benchmarking of International Office Operations 2008, involving 18 TAFE systems and institutes and covering 13,919 commencing international students, nearly 80% of commencing international students in government vocational education and training in The study benchmarked six specific aspects of the international operations of TAFE: costs of international operations; staffing of marketing, admissions and compliance; admissions procedures and quotas; costs of recruiting for key source countries; conversion rates from applications to offers to commencements; recruitment channels and conversion rates. The study has been conducted for five years, from 2004 to 2008, and the presentation will include some time series, plus comparisons with university international operations. Andre Amrein, Manager International TAFE South Australia, will provide a TAFE SA perspective on the use of benchmark results for strategic review of VET international operations, for continuous improvement of VET international office processes, and for analysis of trends in costs such as commission payments across the industry. Introduction Strategy Policy and Research in Education Limited has been carrying out benchmarking studies of the international operations of Australian TAFE institutes and systems since In total, 19 TAFE entities participated in 2004, 13 in 2005, 16 in 2006, 15 in 2007 and 18 in The 2008 study covered 13,919 commencing students, on campus in Australia, and international fee revenue of $161 million. The study focused on international students on campus in TAFE systems and institutes in Australia, in vocational education. It should be noted that the 2008 study differed from earlier years in that ELICOS students in TAFE systems and institutes were excluded from the study. This difference needs to be taken into account when 2008 results are compared with earlier years. Benchmarking at its simplest is a means of comparing one s performance with one s peers. For an education institution, it is the collection of information about an aspect of the institution s operations in a way that enables comparisons to be made. The results of the comparison can then highlight where improvements are needed, where the institution can learn from others and where problems have to be investigated, as we will develop later. We focus on international students in vocational education and training in TAFE systems and institutes, on campus in Australia. Our scope does not include international students in off-campus/distance/flexible mode, and does not include international students at offshore campuses. The population in this study is large and representative, covering 81% of the 17,172 international commencements in non-government vocational education and training, as reported by Australian Education International. Each participating TAFE entity receives an individual report and in each individual report, individual responses are highlighted. Each individual report is different and no participant s individual responses are reported to any other participant. 1

2 2008 Findings For benchmarking of international operations, a questionnaire was distributed to TAFE institutes and systems in November 2008, seeking 2008 data, in six areas the costs of international operations as a proportion of on campus international student revenue the staffing of marketing, admissions and compliance admissions procedures and quotas costs of recruiting for key source countries conversion rates from applications to offers to commencements recruitment channels and conversion rates. TAFE entities were invited to participate in all six aspects, or to cherrypick those aspects where they wished to participate. Results were distributed in January International Office Costs In total 18 TAFE entities were able to report numbers of commencing international students and International Office costs, using actual or estimate or budget figures for This enables benchmarking of International Office costs per commencing international student. The 18 TAFE entities reported 13,919 commencing international students. International Office budgets, excluding commissions, aggregated in 2008 to $24.3 million, or $1,749 per commencing student, from $1,590 in 2007, $1,720 in 2006, $1,315 in 2005 and $1,386 in 2004 in populations which also included ELICOS students. Commissions in 2008 aggregated to $12.3 million or $880 per commencing international student, from $786 in 2007, $655 in 2006, $630 in 2005 and $620 in 2004 in populations which also included ELICOS students. Including commissions, International Office budgets in 2008 aggregated to $36.6 million or $2,630 per commencing international student, from $2,377 in 2007, $2,375 in 2006, $1,944 in 2005 and $2,006 in 2004 in populations which also included ELICOS students. Chart 1 shows Dollar Cost per Commencement including Commissions. It shows the range of the 18 responses, the average of the 18 responses ($2,839) and the median response ($2,368). 2

3 Chart 1 Dollar Cost per Commencement including Commissions $2,368 $2,839 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Chart 2 Number of Starters and Cost per Starter including Commissions displays economies of scale for the 18 TAFE entities, showing how international office dollar costs, per commencing student, change as the value of the international student program increases. Chart 2 Number of Starters and Cost per Starter including Commissions $7,000 $6,000 $5,000 Cost per Starter $4,000 $3,000 $2,000 $1,000 $0 0 1,000 2,000 3,000 4,000 Staffing of Marketing and Admissions Number of Starters The 18 TAFE entities reported an aggregate 56.9 staff in 2008 dedicated to marketing, and an aggregate 13,919 commencing students. In aggregate, it takes 4.1 marketing staff to achieve 1,000 commencements, from 4.0 in 2007, 4.0 in 2006, 4.5 in 2005 and 4.6 in This equates to each staff member dedicated to marketing achieving 245 commencements per year, about one commencement per marketer per day, from 253 in 2007, 252 in 2006, 221 in 2005 and 217 in

4 The 18 TAFE entities reported an aggregate 60.6 staff in 2008 dedicated to admissions, and an aggregate 13,919 commencing students. In aggregate, it takes 4.4 admissions staff to achieve 1,000 commencements, from 5.2 in 2007, 4.1 in 2006, 4.0 in 2005 and 5.2 in In aggregate each staff member dedicated to admissions achieves 230 commencements per year, about one commencement per admissions staff member per day, from 192 in 2007, 246 in 2006, 251 in 2005 and 191 in Costs of Recruitment for Key Source Countries If salaries, publications and scholarships are regarded as fixed costs that generally do not vary across countries, then commissions, travel, advertising, exhibitions and freight are country costs that do vary across countries. Commissions, travel, advertising, exhibitions and freight in aggregate provide a country cost of recruiting students from a source country. For the 17 TAFE entities reporting on this area, the country costs in 31 countries aggregated to $11.0 million, including $7.3 million in commissions. From these 31 countries, the 17 TAFE entities recruited 12,664 international students in 2008 at an average country cost of $868, from $927 in 2007, $914 in 2006, $740 in 2005 and $893 in The average country cost in 2008 included commission of $580, from $668 in 2007, $595 in 2006, $503 in 2005 and $551 in The commission in 2008 of $580 per student is the commission for every international student recruited, not just those on whom a commission was paid. For the 17 TAFE entities in aggregate, Chart 3 displays Country Cost of Recruitment by Source Country. It shows the country cost of recruitment, including commission cost, for each of the 31 source countries in the study. Chart 3 Country Cost of Recruitment by Source Country $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 For the 17 TAFE entities in aggregate, Chart 4 explores Cost and Yield: Country Cost and Number of Commencements, for those 19 countries that were the source of 150 or more commencements in

5 In a Cost and Yield chart, the countries in the bottom right hand quadrant are those which are large source countries for Australia with relatively low country costs. Ideally, all source countries would be in the bottom right hand quadrant with Australia and, more or less, China. Chart 4 Cost and Yield: Country Cost and Number of Commencements $2,000 $1,800 Indonesia Hong Kong Thailand Vietnam $1,600 $1,400 $1,200 India Sri Lanka Japan Brazil $1,000 Pakistan Malaysia Taiwan Korea Mauritius China $800 Nepal ,000 1,500 2,000 2,500 3,000 Colombia $600 Philippines UK Australia $400 $200 $0 Recruitment Channels and Conversion: Applications/Offers/Commencements TAFE entities were invited to benchmark conversion rates, from applications to offers to commencements, by level of study, by recruitment channel, or by both level and channel. In total 18 TAFE entities, up from 15 in 2007, 12 in 2006 and nine in 2005, provided data for 2008, enabling benchmarking of conversion from applications to offers, conversion from offers to commencements and conversion from applications to commencements. There is no attempt at the impossible task of matching applications with offers and commencements over different time periods. What is being benchmarked in this study of conversion rates is the number of applications in 2008, the number of offers in 2008 and the number of commencements in In aggregate in these 18 TAFE entities, 36,271 applications resulted in 31,178 offers and 14,572 commencements. Overall, 87.4% of applicants received an offer, 45.9% of those who received an offer commenced and, as a function of those two results, 40.2% of applicants commenced, from 33% in 2007, 44% in 2006, 42% in 2005 and 44% in In 2008, TAFE entities processed 2.5 applications to get a commencement, from 3.0 in 2007, 2.3 in 2006, 2.4 in 2005 and 2.3 in Chart 5 All Levels Starts/Applications % displays the proportion of applicants who commenced. This is a function of the proportion of offers to applications multiplied by the proportion of starts to offers. The chart shows the range of the 18 responses, the average of the responses (43%) and the median response (41%). 5

6 Chart 5 All Levels Starts/Applications % 41% 43% 0% 20% 40% 60% 80% 100% For an Australian TAFE entity, there are eight recruitment channels. International students can be recruited from Australia: through the entity s own pathway programs in Australia, directly from Australia with no agent, through an agent in Australia other than IDP, or through an IDP office in Australia. Or international students can be recruited from overseas: through the entity s own pathway programs overseas, directly from overseas with no agent, through an agent overseas other than IDP, or through an IDP office overseas. This analysis looks at TAFE entities use of these recruitment channels, and the efficiency of these channels in terms of their conversion from application to commencement. Fifteen TAFE entities were able to provide numbers of commencements by recruitment channels, reporting 14,252 commencing students. Of these 14,252 commencements, 5,761 students (40%) were recruited in Australia and 8,491 students (60%) were recruited from outside Australia. Chart 6 Recruitment Channels: Size on the following page shows, for the 14,252 commencing students in this analysis 40% of international students were recruited from Australia and 60% from overseas 29% were recruited directly, with no agent, and 8% through pathways 64% were recruited through agents, including 10% through IDP offices. This analysis now looks at the efficiency of these recruitment channels in terms of their conversion from application to commencement. Ten TAFE entities were able to provide analysis of the efficiency of recruitment channels. This analysis of efficiency of recruitment channels covers 9,705 commencing students, 4,329 recruited from Australia and 5,376 recruited from overseas. Again, there is no attempt at the impossible task of matching applications with offers and commencements over different time periods. What is being benchmarked in this study of the efficiency of recruitment channels is the number of applications in 2008, the number of offers in 2008 and the number of commencements in

7 Chart 6 Recruitment Channels: Size InOzPath 40% 35% OSIDP 30% InOzDirect 25% 8% 20% 15% 6% 10% 15% Australia 5% OSAgent 37% 0% 2% 17% InOzAgent 1% 13% OSDirect InOzIDP OSPath Chart 7 Conversion Rates by Recruitment Channels, on the following page, looks at the efficiency of conversion from application to commencement for each recruitment channel, without any regard to the volumes for each channel. The chart clearly shows that channels in Australia achieve the greatest conversion rates from application to commencement. Taking the channels in aggregate form, Australian channels convert 43% of applications to commencements, while overseas channels convert 35%. 7

8 Chart 7 Conversion Rates by Recruitment Channels InOzPath 60% OSIDP 36% 50% 40% 30% 59% 40% InOzDirect 20% Australia 10% OSAgent 37% 0% 40% InOzAgent 29% 34% OSDirect 54% InOzIDP OSPath 8