Making the Human Resource Supply Chain More Efficient … At A Profit
It is always difficult for me to hear a story about massive unmet demand for something in the marketplace without exploring why its being under-served and finding creative (profitable) remedies. Especially when its a service that can easily and cheaply be provided. American Public Media’s Radio Show “Marketplace” ran an interesting piece today about how thousands of immigrants to the US are being turned away by English language training schools in New York City due to the classes being constantly booked. The students, from all corners of the world, are trying to learn English as quickly and efficiently as possible so they may become more productive members of the American economy as quickly as possible.
There’s a lot of political debate around immigration and what our “National Language” ought to be here in the US. I won’t be touching on any of that. I think there’s too much money to be made in satisfying these unmet demands.
Language schools of this nature are obviously not very profitable. If they were, there wouldn’t be so many students being turned away. Its not like there’s a shortage of people who are able to teach English to others in the US. Monetization of this under-served market gets more interesting, however, as you look further down the human resource “supply chain”. These immigrants want to get jobs and contribute to our economy in both unskilled and skilled positions. From bus boy to doctor, they are typically motivated and hard-working individuals that want to integrate as quickly as possible.
The unmet demand in this space is actually two-fold. Not only are there not enough English schools, there are not enough skilled workers in the economy to meet US business’ demands. This is exemplified by US businesses lobbying so strongly for increases in the H1B work visa program over the past decade.
After learning English, many of these immigrants will be eager to join the work force. Many will need training on computers or simple accounting so they may effectively fill office jobs in the US. In a strong economy, such as the current one in the US, staffing companies and temp agencies need to continually replenish their supply of these types of workers. What if the language school these immigrants attended also provided computer and other types of training for a fee? The school would take the student from not knowing any English to full-time employment in a skilled job. If the student could not afford the fee (probably a common scenario) the school could loan the student the money and allow gradual payback once the student is employed and income-producing. The real bread and butter here is the healthy fees from the staffing and temp agencies the school would earn. It would eventually make sense for the school to become a staffing/temp agency itself because it would have such an excellent supply of freshly-trained and eager human capital.
Done properly, the school/staffing agency could be quite profitable and would likely have many of its operating costs subsidized by the government all while fueling the strong growth of US businesses by providing quality workers. If the upcoming immigration bill mandates that English proficiency be a prerequisite for attaining visas or citizenship, your customer base just got substantially bigger.
Today’s Marketplace transcript on this topic: Marketplace: Huddled masses yearning to learn free
