A corporate approach to managing risk in international recruitment

Short on time? Here are the highlights:

  • International student recruitment is an important area of risk management for most institutions and schools
  • Risk management is a matter for institutional leaders, including those at the board level
  • Best practices include establishing clear accountability for managing risk within the institution, and establishing a comprehensive plan for identifying and monitoring risk with board-level reporting incorporated

This article is adapted and reprinted with permission from Beyond the Horizon: The Near Future of International Education. Launched at the 2016 NAFSA conference in Denver, Beyond the Horizon is a special anthology of essays and commentary from leading practitioners on the issues that will shape international education over the next several years. The complete edition is available to download now.

Organisations in both the private and public sector today face an unprecedented number of new and emerging risks that can threaten their strategies if they are not identified quickly and managed properly. Integrated, organisation-wide risk management programmes that can turn potentially crippling risks into opportunities for innovation, cost reduction, improved compliance, and competitive advantage are as essential to the international education industry as to other sectors.

International student recruitment is an important area of risk for most education institutions, particularly given the growing contribution international student fees are expected to make to an institution’s overall financial position. Our experience, however, suggests that the focus to date has been more on growing international revenue and that the associated risks have not typically been fully considered.

“Many institutions have built their financial plans on continued growth in international students and this is not sustainable in my view,” says Mike Rowley, partner and head of Global Education Practice with KPMG. “The international market is complex and whether institutions are recruiting inbound or entering into strategic partnerships overseas my general view is the governance and oversight of these activities is not as strong as it should be and institutions often get burnt.”

The corporate sector has historically taken a more proactive approach to risk management, and there are some ready lessons here that can be adapted for higher education.

Start at the top

There is real potential for serious issues to develop across all risk categories – reputational, crisis, financial – for all organisations given the rapidly changing world in which we live. This is why risk management is a board-level issue. At KPMG, we are increasingly seeing either risk committees being formed or audit committees placing a greater focus on risk management in order to protect the future of their organisations.

This is something that universities have also begun to do but must accelerate – especially given the increasing importance of international education to overall institutional performance. Governance structures are required and should ensure effective board oversight of internationalisation initiatives. Board members need to be satisfied that roles and responsibilities for risk are clearly understood throughout the organisation, that guidance is sought where needed, and that support around decision-making is available.

Make someone accountable

Increasingly, corporations are identifying or employing a Chief Risk Officer who carries overall responsibility for all elements of risk and effective risk management. Universities need to consider if they have someone in place who has responsibility for this across the student life cycle so that all risks are understood and being managed. Having separate responsibilities for marketing, recruitment, and delivering learning will not give a full view, particularly around the areas where those different areas of operations connect.

Have a risk strategy

Corporations make sure risk strategies align with their overall strategy. They consider the amount of risk – often referred to as “risk appetite” – they are prepared to take, and they consider potential return against identified risks. This increases the ability of leadership to make informed decisions about markets. In the education sector, leaders similarly need to understand their school’s appetite for risk as it competes for international students and considers new markets or ventures abroad.

Implement a comprehensive plan

Simply having a risk plan in place is no longer sufficient in the corporate world. Good practice has evolved, and is now standard that there is an organisational plan in place that includes:

  • Risk identification, assessment, and measurement;
  • Risk management and monitoring;
  • Risk reporting to ensure the board and senior administration is continually kept up to date.

Universities should look at international students from the point at which they first connect with them to the point where students become alumni, and they should have an overview of all of the risks along the way. There are a number of obvious risks that must be considered in order to secure revenue, maintain the reputation of the institution, and provide a quality learning experience to students. Bringing the right departments together to ensure that risks are identified and managed is essential.

Manage key processes

The history of process mapping and improvement is well documented and shows no signs of declining in importance, and universities can benefit from increasing their focus on the “learner journey” through the university. Too often we are told that this is the responsibility of another department and then see examples of how learners and revenues are being lost. There is also an increasing corporate trend to focus on the customer experience; we are just starting to see this in the education sector as well.

Use data and analytics

Corporations are increasingly using internal data to better inform their risk management plans. It is possible to analyse a range of data sources to be able to identify potential risks before they occur and also to mitigate those risks that continue to occur. For example, we have seen the case of a large university that is only just becoming aware of a trend for international students to fail courses in their third year, and this has been occurring over a number of years. The effective use of the institution’s data could have identified this issue far sooner so mitigation strategies could have been deployed. More broadly, analysis can also be undertaken to better understand performance by home country, gender, and programme area as well as any other material factors that bear on student success or retention.

While it can sometimes feel uncomfortable for academic institutions to seek to learn from the corporate world, these institutions are necessarily concerned – as corporations are – with revenue generation and not exposing themselves to undue risk. Countless companies have been burned many times by not effectively managing risk, and the corporate world has learned from this. Universities have the opportunity to leapfrog this learning but only if they recognise how important it is to create a culture of risk management across the institution.

For additional background on strategic risk management in international student recruitment, please see our earlier post on the subject, including a feature interview with Barton Carlyle CEO Pamela Barrett.



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