Recruiting body in crisis

February 25, 2005

Australia's main foreign-student recruiting company, already in financial turmoil, has been hit by the resignations of its chief executive and the chairman of its governing board and the loss of a contract in southern Africa.

Lindy Hyam, who headed IDP Education for five years, quit her A$300,000-a-year (£125,000) post after the university-owned firm was hit by a financial crisis. Board chairman Lance Twomey also stepped down. He remains a director.

Projections made by IDP for a substantial growth in foreign student numbers were proven wrong when the Australian dollar rose sharply and many universities increased fees.

Thousands of prospective South-East Asian students appear to have opted for one of many new universities in their own countries, or have chosen to go to nearby Singapore or Hong Kong.

The drop in student numbers left IDP with a A$3 million shortfall in 2004. Last December, the firm was forced to shut seven of its 90 overseas offices and make 60 staff redundant.

Two days before Christmas, most of the shareholder universities provided interest-free loans totalling almost A$8 million to resolve the company's cash-flow problems.

But last week, the Botswana Government announced it would sever links with IDP, closing off one of the company's most lucrative contracts. The Botswana High Commission will take over the A$19 million student fellowship scheme under which 500 of its students are placed and supported in Australian universities.

Botswana had been paying IDP about A$6 million every three months and, although most of this went to Australian universities for tuition fees and other allowances, IDP retained about A$1.5 million a year in management charges.

The African state has taken similar action in countries where its embassies have assumed management control of the programme. But staff in the High Commission claim they do not have the expertise to handle the work.

Professor Twomey, vice-chancellor of Curtin University of Technology in Perth, praised Ms Hyam's work and said neither he nor she were pressured to resign.

"Lindy Hyam has served the organisation extraordinarily well but things got away from all of us in the second half of last year," he said. Professor Twomey accused university shareholders of "hamstringing" IDP. Had the company been allowed to recruit around the world, he said, it would still have been on a marked growth curve.

A proposal last year for IDP to become a global recruiter of international students was supported by Professor Twomey. Vice-chancellors in Ireland had approached the Australian Vice-chancellors' Committee to ask if the company could assist in recruiting students for their universities.

IDP sent a team to Ireland to investigate the issue but Australian vice-chancellors saw the move as a serious conflict of interest and the plan was scrapped. Professor Twomey said the universities were competitors with IDP while also being stakeholders in the company. "They have limited and constrained the type of organisation that ought to be there," he said.

Denise Bradley, the new chair of the board and vice-chancellor of the University of South Australia, said she expected the actions already taken to curb costs would put IDP in surplus this year.

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