Perspective on COVID-19’s Impact on Education Consultancy Business in Nepal

Author: Sirjan Malla

COVID-19 started from the meat market of Wuhan City has shattered the world economy into pieces. It has multidimensional impact on almost every field be it social, political or economic sector. Businesses have been hugely affected due to shrinkage of demand of goods and services as a consequence of social distancing and isolation. Mostly, the prominent impact is witnessed on service-oriented businesses. 

In Australia, the pandemic Corona Virus has severely affected the three sectors as: Export, Tourism and Education. To combat against this catastrophe, Australian Government has injected total support for the economy to $320 billion out of which $ 80 billion was to stabilize job crises. As a part of corona virus stimulus package, Australian students (domestic students) are getting a $550 allowance fortnight on top of the $460 they have been receiving as student allowance. Unfortunately, there is no such aid to international students. Some universities and education providers have come forward with discounted tuition fees and payment plans to assist the students in need. However, it’s not still sufficient to them. 

On a bright side, International Students who have been in Australia for longer than 12 months will be able to access their Australian superannuation up to $10,000 in this financial year to assist in supporting themselves through the corona virus crisis.

Future of Consultancy Business

Like other form of businesses, the future of this business largely depends upon the invention of Corona Virus Vaccine. Its anecdote is estimated to be invented by 2021. So, the year 2020 will be the toughest year for this industry for two reasons: 

1  Uncertainty about the enrollment of International Students for the obvious reason of safety of their citizens. 

2) Hesitation/Fear:

• Even if international students are accepted under strong health supervision, the psychological fear among parents would limit enrollment despite desire of students. Parents being the decision maker and the source of fund can impose such restrictions. Hence, there will be fewer numbers of students in market specially diploma and undergraduate students. 
• After the outbreak of virus, international students are facing financial crises as they are losing their jobs. Typically, Nepalese students are involved in hospitality sectors and hence its shut down is hardly hitting them. IFM Investors chief economist Alex Joiner states that 6% of all jobs were eliminated between mid-March and early April, meaning as many as 780,000 Australians have been laid off; pushing the unemployment rate to 10.8%. Therefore, it will invite insecurity among students.  

Impact on Business

With less number of students and intense competition in the market, it is sure to invite havoc in this industry. Basically, the effect of this virus can be broadly categorized into two parts: Short term and Long term effect 

1) Short Term Effect: 

The pandemic virus will bring hazardous impact on business in the form of liquidity problem. Managing fixed rent, salary, working capital and miscellaneous expenses will be a serious concern to business due to downfall of students in market resulting to decrease in income.

What can Consultancies do in such hard times? 

It is going to be the toughest phase to this industry. COVID impact is inevitable in business however its impact can be endured if we wisely plan the costing and operation of our business. Some of the noteworthy strategies can be:  

Regarding Operation of business: 

• Focus on existing students: Students who are currently in processing period like: receiving offer letter, financial making, GTE process, COE waiting should be immediately called and aware about the situation so that they won’t be misinformed and misguided by other. 
•  Consistent follow up to our future potential students from visitor list or IELTS classes  
•  Enroll fresh IELTS/ PTE students as much as we can: IELTS and PTE students are our future clients. So, we should enroll them as much students as we can. 

Note: There will be fewer students in market so effective marketing tools should be used like:

• Extra discount on language classes depending upon grades 
• Social media promotion 

After few months there will be fresh 10+2 and BBS 4th year students in market, to attract them we can do:

• Activate our admission officers in all colleges.
• Visiting 2nd last day in the examination hall with just privilege card, nothing than it. 2nd last day because last day it will be overcrowded due to other doing the same. Note: Making students understand about the significance of privilege is must also we can add addition feature this time like: a gift hamper to those students who visit office with it and get enrolled) 

• Broad Counseling Approach: All most all consultancies counsel for international countries only but we can be different by adopting holistic approach of counseling. We can also guide those students who want to study bachelor or masters in Nepal and if possible manage placement opportunities in different colleges of Nepal at bargain fee. This will generate enough traffic at our office which will be productive in future. For this, we need to have business alliance with various colleges. 
• Career counseling to SEE students (What in +2?): We should be different as everyone will focus only on 10+2 students but we can get upper hand if we could connect to SEE students and make them aware about various dimensions of domestic and international students. It will lead to brand recognition.   
• Horizontal Tie-up: We can tie up with other education institutions like: Bridge course, nursing/medical preparation institution, computer classes, and so on.    

Costing Decisions:

Before we take some major costing decisions, the preliminary thing we determine is the breakeven point of business (how many number of students do we need further to meet our cost for future) so that it will bring clarity to our business actions and goals.

For this, following actions can be carried out: 

•  Offering Tuition classes or any skill oriented classes to all faculty: If we could implement it properly, it will have positive dual impact on our business. First, extra source of revenue to business and second there will be high chance that same students will be our future clients (It can be executed via Think and Grow Premises)  

•  Lay-off: The biggest upfront challenge lie in maintaining operation cost of business every month. Hence, it will be difficult to sustain business if number of employees is high. So, we need to draw the organizational chart, hierarchy and identify which employee has maximum and minimum direct impact on productivity. Keep the maximum one and lay-off later one for some period. (Note: If company is backed by strong reserve and surplus to endure the expenses then company can reconsider its decision else don’t move by emotion alone) 
• Pay Cut/Pay based on performance: Company can temporarily cut the remuneration scale during tough or unproductive months. On the other hand, it can also set the pay scale base on the performance of employee. (Note: Leader can play great source of motivation in this rough phase. So, he/she shouldn’t leave any stone unturned to do so)        

2) Long Term Effect: 

Those who can sustain this short term impact of financial crises will prove to be victorious in long run because of following reasons: 

• Invention of Corona virus vaccine in near future will decrease psychological fear among people leading to growth of number of international students. Not to forget, restriction on students due virus issue will also be lessened.  

• Most of the unstable consultancies will be wiped out within upcoming 7-9 month period being unable to manage their operating cost. Hence, there will be larger opportunity in future. 

Worst scenario 

• Failure of vaccine invention for 2-3 years will collapse entire industry.  
•  IMF has predicted that COVID-19 will bring global recession in future. It will take 2-3 years to revive the world’s economy to its breakeven point. It signals that even if the vaccine is invented within a year, the effect will remain there for 2-3 years post corona virus vaccine. 
• Australian economy largely depends upon service sector (62.7% contribution to GDP) like: tourism, hospitality, education and so forth which are much likely to be adversely affected than any other. Tourists and international students will hesitate to travel for few years or there will be gigantic contraction in number. Consequently, there will be ripple effect of loss job opportunities, decrease in purchasing power, lack of demand, bankruptcy of business and ultimately  may move to recession field.   

Why Australia can’t abandon fresh International Students for long period ? 

Following reasons: 

• Revenues from International students have become significant contributor to country’s GDP staking around 1.98%. Last year in 2019, whopping amount of $ 37.6 billion was generated from international students where Chinese, Indian and Nepalese students contributed $ 12.1 billion, 5.5 billion and $ 2.6 billion respectively. This figure has surged 15% (5 billion) as compared to 2018. Currently, there are more than 7 lakhs international students in Australia. 
• Australian bushfire in September 2019 created direct financial loss of $110 billion and indirect loss of $230 billion the economy. 
• Additionally, corona virus is predicted to decline economy of nation by -6.7% in 2021; shrinkage of Australian GDP by $ 34.2. In both of the cases, it can’t afford to lose one of its biggest sources of revenue. 

It will be a single and most powerful reason which is safety of its citizens.  

Why Nepalese students have upper hands than the students of other nations? 

Since it’s about health issue, Nepal will have upper hand because China and India have high number of COVID cases and death as compared to Nepal which has no death till today. Hence, Nepalese students will be the safest international students to enroll in Australian Institutions than any other nations.  

Note: According to 2018 statistical data, international students in Australia arrived mainly from three nations: China (29.58%), India (12.94%) and Nepal (6.24%).  

Conclusion 

To sum up, Corona virus is a temporary problem that will end as soon as its vaccine is invented. Hence, those consultancies which can sustain in that phase will be the real winner in this game. So, business should be backed by effective strategies, quick implementation and sound control mechanism. 

Reference:

https://www.dcnepal.com/2020/04/146228/?fbclid=IwAR1h4z7rybRODJJCmohY7eEYeQEzUDu0OW23X YEf6ibrlb5Vp9GcA3iNc0w 

https://www.theguardian.com/australia-news/2020/apr/17/we-feel-abandoned-international-studentsin-australia-facing-coronavirus-alone 

https://www.theguardian.com/australia-news/2020/apr/14/a-downward-spiral-coronavirus-spinsaustralian-universities-into-economic-crisis 

https://www.aeccglobal.com.au/covid-19-latest-updates-for-international-students-in-australia/ 

https://www.idp.com/australia/corona-virus-information-for-idp-students/ 

https://www.bbc.com/news/world-australia-52131939 

https://www.pwc.com.au/publications/australia-matters/economic-consequences-coronavirus-COVID19-pandemic.pdf 

https://www.cnbc.com/2020/02/27/coronavirus-outbreak-australia-economic-impact.html 

https://www.theguardian.com/business/2020/mar/21/coronavirus-has-delivered-a-hammer-blow-toaustralias-economy-what-happens-next 

https://www.consultancy.com.au/news/1783/what-is-the-impact-of-the-coronavirus-on-australiaseconomy 

https://en.wikipedia.org/wiki/Economy_of_Australia 

https://www.theguardian.com/business/datablog/ng-interactive/2020/apr/23/australian-job-losstracker-employment-unemployment-numbers-industries-places-most-affected-coronavirus-crisis 

https://www.businessinsider.com.au/australia-job-losses-coronavirus-uenployment-rate-shutdowneconomy-2020-4 

https://treasury.gov.au/coronavirus