Mark Lucas: COVID impacts on education agents

Between 5-8 October 2020, Amy Baker and her team at The PIE ran The PIE Live. Billed as a “dynamic virtual summit…bringing together thought leaders from around the world who are innovating in the international education industry”, it was all that and more.

AgentBee participated in several interesting sessions covering a range of topics and issues. Of particular interest was the focus session on Australia, in which Mark Lucas, director of IAE Global, reflected on the experience of his own agency during COVID, and the impacts on education agencies more broadly.

Here’s a summary of his key points.

Internal Competition

Australia closed its international borders back in March. International students could leave the country to return to their homes and many did. However, as the pandemic developed, many students decided to stay in Australia.

Given that no students have been able to enter the country since March, there is intense internal competition – between institutions and between agents – for the limited pool of international students who stayed. The result is “massive discounting” of course fees and increasing commissions for channel partners or sub-agent partners. Mark believes these practices are “driving a wedge” in the industry and are unsustainable.

Survival of the Smallest

Mark explained the brutal cashflow crunch faced by most education agents around the world since the virus took hold in March.

You are seeing agents who have not received a major commission payment now this year.
Mark Lucas, iae Global

At the start of the crisis it seemed that small education agencies may suffer the worst and be forced to close their doors. According to Mark that has happened, but it’s played out a bit differently than anticipated. He explained that many small “mum and dad” agencies in source markets have been able to mothball their business and walk away for six months or however long it takes the market to recover. Instead, it is the larger agencies that are having more trouble.

It is the big established agencies that have infrastructure and staff – they’re finding it more challenging.

This leads in to his next point…

Agency Corporate Knowledge

The pressure on large agencies has forced many to close offices and lay off staff to reduce costs. That is understandable but, as Mark pointed out, rebuilding after COVID will not be easy.

A key issue here is corporate knowledge and expertise. Mark said: