“Over 300 teachers graduate from Tsinghua and Peking University", such as slogans, have been shown on the websites of Chinese online K-12 tutoring institutions, which aim to attract more consumers. Some teacher profiles are even more outstanding like “A Prestigious University Background" and “A State-sponsored Scholar".
Especially in recent years, there have been many issues that significantly influence the K-12 after-school tutoring market, for instance, burden-reducing provisions for study carried out will intensify the competition of children after class to some extent. Considering the uneven distribution of educational resources in China, when schools are required to reduce teaching tasks, students in rural areas will have fewer opportunities to change their life. Moreover, as the structure of people's consumption has been optimized and upgraded, parents are always pursuing for high-quality resources. Thus “Recruiting more teachers with top university background" seems to be a strategy(hereinafter referred to as “the Strategy”) adopted by institutions to attract more consumers.
But this summer is a little bit different. Due to the COVID-19 epidemic, online education has become the main approach for students to continue their learning activities, thereby the competition in the K-12 track has become increasingly intense. However, leading K-12 companies do not emphasize hiring elite teachers anymore.
What are the underlying reasons for this change? Is it because any policy supervision issues such as certificates are still hard to gain by all teachers, or have the leading companies already moved to the next stage of development? JMDedu writes this article to share our industrial insights with global readers.
New-established brands emphasize “hiring elite teachers” while leading institutions upgrade the teaching force
With the increasing supply of products in the K-12 sector, to choose a suitable product for their kids, parents are always spending more time than the past to compare different companies, and the key criterium in their decision-making process is whether the institution has elite teachers. In this case, Zhangmen 1-on-1 focus on teachers with Tsinghua University and Peking University background, GSX focuses on large-sized classes taught by super-elite teachers, NetEase Youdao launched the “quality course strategy" emphasizing individual teacher's skill.
Insider believes that: “‘the Strategy' can help new players to attract a large number of users at the initial stage, companies can sell more courses and lower the cost of teachers. However, for large-scale and mature institutions, their brand value is more influential than that of the individual elite teachers. Thus, these established institutions do not need to follow ‘the Strategy' anymore."
In those years, when education O2O is popular, platforms relying on a group of elite teachers also enjoyed some success. As the COVID-19 pandemic facilitates the development of OMO, the demand for online education institutions again increases, and problems also occur.
Recently, reporters from the Xinhua News Agency surveyed several institutions and found that although teachers shown on their websites have excellent academic backgrounds, teaching certificate number cannot be seen or do not conform to the national numbering rules. Meanwhile, reporters observe that some institutions still violate the national regulations, which do not require applicants' qualifications during the interview. Candidates who pass the interview can start to teach students after a few weeks of training.
It will take a long time to fix the above issues. And when reviewing the relationship between institutions and “elite teachers" in the market, we will find that during the early stages, teachers with an excellent academic background can gather more business resources, and institutions are highly relying on them. However, once the elite teacher leaves, it will have negative impacts on institutions, even directly choking the business operation. Therefore, established institutions gradually release themselves from “the Strategy", and turn to improve the teaching force. For instance, TAL and some leading institutions have invested significantly on the standardization of education. Still this move highly requires institutions’ operational capabilities, and few of them could follow the trend.
Deep-dive into the changing relationship between elite teachers and institutions
At present, more and more foreigners have become star teachers that are not only limited to K-12 level in online language training institutions. These teachers also brought many new users to the platform through word of mouth. In this context, overseas readers may wonder: what can institutions bring to the elite teachers?
In the Chinese market, the changing relationship between elite teachers and institutions forces participants to think about building up an internal career path for individual talent teachers. Additionally, there are also some bonus forms occurring in the market, such as commission, distribution option, partner identity, as well as personal studios. Some institutions even suggest that they set up a broker company for those elite teachers to maximize the interests of both parties. And there have been a large number of Multi-Channel Network brands indeed.
“In the future, the education sector may adopt the entertainment industry's operation model. Top stars in the entertainment industry all have their studios. Independent of the organizations, these studios allow stars to earn pays, gain the share of the films, and the producers will deal with all the policy issues.” Said the insider.
Actually, along with enjoying the “internet benefits”, a stable group of elite teachers can bring geometric contributions to the institutions. For example, the top 10 teachers from GSX contributed 46.6% and 36.3% of the group's income in 2018 and 2019, respectively. In 2019, the average per capita contribution was 76.77 million yuan, and some super-star teachers can easily get tens of millions. Their enormous contributions are part of why institutions are willing to invest heavily in promoting elite teachers and creating a brand image.
However, institutions also impose restrictions on elite teachers. At the GET 2019 conference, Dou Xin, the president of Lanxum, revealed that teachers in the “Big Chinese Learning" sector will definitely be high-income, famous, star-like, and IP-based in the future. At Lanxum, teachers who participated in the “job-poaching", for instance, meeting with competing institutions separately or revealing salary and compensation to the headhunter, will gain no returns.
And for education companies that are seeking expansion, it is inevitable for them to control and reduce elite teachers' contribution to the revenue, and gradually enhance the ability to self-restoration. Still looking at GSX, in 2019, the percentage of revenue generated by the top 10 teachers decreased by 13.3% year-on-year, and the number of third-party teachers fell from 85 in the first quarter of 2019 to 56 the fourth quarter. Platform contract teachers increased from 84 to 176. These changes not only depend on the training and management of teachers but also test institutions’ organizational effectiveness.
Core competitiveness in the K-12 sector: Companies' ability to improve existing teaching forces
In the past, institutions provided classrooms for elite teachers and relied on their reputation to attract and recruit more students. These teachers also went with the institution to admit more students and enjoyed better services provided by the institutions.
Now, with the collective creation and development of teaching products, the construction of a comprehensive teaching service system, more complicated enrollment changes, educational institutions cannot only rely on a small group of famous teachers' reputation and ability to attract students. To achieve success, players need to focus on optimizing the construction of teaching products, customer service systems, teacher training systems, and the operation management system. In this way, it can not only better support the teacher team but also continuously improve the organizations’ comprehensive abilities.
Besides, the core competitiveness of the institution in the K-12 sector should be the ability to improve existing teaching forces, and then cultivate excellent teachers inside the company. In a world, the dynamics between elite teachers and institutions reflect the competition of interests and show institutions' organizational strategy. But whether the parents will pay for these new changes, we still need to wait and figure it out after the short summer vacation.