Online teaching has expanded at a massive rate in the last five years.
Effectively all a teacher needs is a computer and internet connection and he or she is in business. The utopian ideal of crossing borders, building bridges and overcoming great divides.
Online teaching joins teachers in the west with students from non-English speaking countries — although the students, and teachers, could be from any part of the world — where they can then have a virtual class via their computer screens.
It is perfect.
The students can find a teacher easily and have an English class whenever they want and all from the comfort of their own home.
Today, the main bulk of this industry takes place via third-party platforms. These companies provide agency between teacher and student.
Kind of like Uber for ESL.
It all started from two Chinese women who both saw a gap in the market and with typical Chinese business-savvy, dived right into it.
VIPKid was founded by Cindy Mi in 2013.
She saw that there was a huge demand for English teachers but the supply of said teachers was just not there. As the technology was in place, Mi started VIPKid and the rest is billionaire history.
Hui Zhi had a similar vision while looking for a private English tutor for her son.
The local agencies just could not provide teachers of the standard that Zhi was looking for. So she started DaDa. Also in 2013.
Another issue for her was running her son back and forth between classes at English training centres.
Once she started her own online school, these problems were resolved.
Now, she had a much higher calibre of teacher to choose from. Plus, she had more time to herself as she no longer had to taxi her son around.
VIPKid and Dada were the first two online ESL giants to evolve.
The Rush of Competition
Others followed suit very quickly.
All Chinese-owned. And why?
Because the main market with no compare is China.
The ESL industry in China is worth a cool $4.5 billion every year.
And as these companies are Chinese, they have the advantage of being able to market to Chinese students in Chinese and via WeChat, the social media giant that every Chinese person uses. Something that other companies outside of China would have great difficulty with.
The Perfect Business Model
It is the perfect business model for ESL.
Firstly, it escapes all the burden of visa issues and immigration red tape for foreign teachers teaching in China. In the last few years in China, as visa laws tighten up further and further, there are less foreign teachers in the country.
Online schools are good for the teachers as they don’t have to jump through all the hoops of getting a visa. Many teachers are rejected for their visa application. Plus, there is no pressure about where to work, how many hours. The teachers can effectively work at two or three different online schools. Something that is illegal to do in China.
As the teachers are working in their own country on a self-employed basis, these problems no longer exist for the schools.
In the old days of traditional bricks-and-mortar schools, it was always something of a headache for schools to find teachers. Once a teacher was found the school then had to go through the rigmarole of getting a work visa.
Sometimes the school may not have been allowed to hire a foreign teacher at all. Or the visa was rejected for any number of reasons.
Apart from visa issues, schools no longer have to concern themselves with visits from the PSB (Public Security Bureau) to check that all work permits are in order.
Then there are the lower costs as online schools no longer have to rent downtown premises for the students to have classes. The cost of such property can be astronomical in certain locations, for example, Shanghai.
Cheaper Teachers – Good for The Schools!
Teachers can also be hired at a cheaper rate.
Good for the online schools at least.
As of writing, March 2019, foreign teachers in China can command around 20,000 rmb a month. Around $3000.
If the teacher has around 20 teaching hours a week that amounts to $35 an hour. Not too bad.
But the online companies offer a top pay of $25 an hour. Many do not pay that. To the teachers in America, they see this as a reasonable rate. Better than working as a barista at Starbucks I suppose…
Convenient for Students’ Parents
And the schools can offer the parents of the students’ two great benefits.
A vast choice of teachers to choose from.
And great convenience.
In bricks-and-mortar schools, the parents — and students — had no choice but to accept whatever teacher was offered to them.
The teacher could be the atypical ESL teacher in Asia. Turning up to work unshaven and dishevelled. Ill-prepared and stinking of booze.
Now, if they are dissatisfied with the teacher then can demand a replacement. The teacher may still reek of alcohol but at least it’s not right in their son or daughter’s face.
And best of all, as Hui Zhi found when setting up DaDa, the parents now have a stress-free, highly convenient life.
Zero commute at all. All classes run from the comfort of their own homes.
This is a great selling point for the online schools.
The Pay ain’t that Great…
All the online schools have a very similar pay structure and company policy.
The pay offered by the schools can be anywhere between $14 to $25 an hour. It may come as no surprise that the schools rarely pay towards the higher end of the scale. Teachers are usually paid around the lower end.
As mentioned before, this may be considered a reasonable rate for working at home in your pyjamas. But even if a teacher were to have 25 teaching hours a week, it would be hard to survive in a city like New York or London at that rate.
Life in a smaller town would be fairly comfortable though.
And practically idyllic if the teacher were the true embodiment of the digital nomad and living in a one-bedroom apartment in Chiang Mai.
However, the schools are still on the lookout to save money. Some of the bigger chains hire teachers in The Philippines.
51Talk makes no bones about this.
Cheaper than American teachers plus they are in the same time zone as China so that will be an advantage too.
All teachers are hired on a self-employed basis so that leaves the school without the headache of paying tax and any other issues that come with full-time employees. But for the teachers, they are often hustling for more hours. The school may give them 30 teaching hours one week. But none the next.
And all teachers must be in possession of a Tefl certificate and a college degree. No exceptions. This is a regulation made by the Chinese government and all schools must comply.
If the Chinese government creates a policy that demands native English speakers only then that could put paid to cheap teachers from The Philippines too.
Early Issues and Problems
In the early days of online teaching, there were some problems.
These issues were mainly regarding a lack of communication from the online schools and fines issued to teachers.
In terms of the fines, the teachers could receive a penalty for any one of the following:
- A technical issue in the class
- Absence from class without prior notice
The school made the teacher 100% responsible for the class.
This meant that if there were any technical issues in the class and the student — or more likely, the student’s parent — complained, and then the teacher was fined for it.
So, there could be an issue with internet reception. If so, then the teacher would receive a fine. Regardless of whether the internet reception problem was happening in his own home or not.
China has certain issues with internet reception in some areas of the country. If this was the case, it was down to the teacher in America or wherever to take responsibility for it.
Chinese Parents took Advantage…
Some Chinese parents cottoned on to the idea of saying that they could not hear the teacher. So the teacher got fined, and the parent got a free class for Cici or Jacky.
You can imagine how this went down with the teachers.
No Sick Leave
Also, if the teacher was sick. Sick and unable to have the class then the teacher was fined. He may have tried to contact a member of staff in the school but to no avail. As far as the school was concerned, the teacher was absent, so he got fined.
Any absence, no matter if the teacher had contacted the school via email or their messaging service, the teacher was fined.
That the schools were issuing fines at all was a problem for teachers in America or any other western country.
What was this? Something out of the days of Dickens?
The second problem was the lack of communication from the schools. Or a total lack of communication in some cases.
As stated above, some teachers called in — in advance — to cancel a class due to sickness. The school either didn’t receive any messages or had no means to deal with such messages. As such it was regarded that the teacher just didn’t show up for a class.
Bad teacher. Pay a fine and don’t get paid for the class.
Teachers Questions were Ignored
Questions that the teachers had went unnoticed.
This is quite normal in a Chinese company. For any ESL teachers that have worked in China, they would be well aware that there can be a total breakdown in communication at times.
Managers tell teachers they didn’t receive the email they sent. Or simply ignore any messages altogether.
For teachers living in America, this didn’t sit well at all. They would be used to people responding to their messages within the next 24 hours. In China, it doesn’t always work that way.
A Loss of Teachers
In the early days, the online schools lost many teachers this way. Simply due to a lack of communication.
Another issue for any teachers in America is the time difference.
As nearly all the classes were held in China, it means that the student would prefer to have the class after school between 5:00pm to 8:00pm or later, China time.
This then means that the teacher in America would begin class very early in the morning. Maybe at 4:00am.
Equally, at the weekend, the student starts the class possibly around 10:00am so the teacher has to give up his evenings on a Saturday and Sunday.
Yes, some teachers can maintain a schedule like this, but as most teachers were in their twenties, this would be a difficult thing to sustain. Very early starts and giving up the evenings over the weekend is not much of a life to the average twenty-something.
In the early days of online teaching, the teachers were often working flat out, just about making a liveable wage and at the mercy of any technical issues, lack of communication and student criticism.
Staff turnover was high.
Now the Tables have Turned…
Now the entire industry has more schools.
More players, more competition.
This is great for the teachers, not so great for the schools.
As the competition increases there comes race towards offering the cheapest classes. Or offering other incentives to the students in order for them to stay.
The online schools will try to find cheaper teachers. Hence, some of the bigger chains going to The Philippines to find teachers.
As long as the authorities do not make any further demands on teachers being native English speakers then this may work out fine.
There should be no issue in teachers being from The Philippines. Or Africa. Or Russia.
But the government no longer issues visas to teachers from these countries. How long before they start making the same demands of the online schools?
In order to retain all the teachers they have in America, the schools offer higher rates of pay, bonus systems, and other incentives.
A Similarity to Other Business Models?
As the online ESL becomes more and more saturated it closely resembles the bike share industry in China between 2015 to 2018.
Just like the online teaching industry, the bike share business started with two main players. They had the lion’s share across the whole country. But others quickly joined and before long there were dozens of companies vying for attention.
Mountains of scrapped share-bikes could be found outside subway stations. People complained of bikes being poorly maintained or not getting their deposit back after use.
Companies folded and investors lost millions.
This is what may happen to the online ESL industry.
The Teachers are in Control
The result of this is that teachers now hold all the cards.
They no longer have to play ball with one company, waiting for more classes and not daring to miss one single class in fear of being fined.
The online companies need the teachers more than the teachers need the online companies. If a teacher encounters any issues with a company, they can bail and work for another school.
It is that simple.
Teachers as Solopreneurs?
Many teachers are now striking out on their own and going solo. They have learned that if they can market themselves effectively, they can build a small business on their own with their own clients.
What do they get out of it?
For a start, a better rate of pay. No need to pay the middleman a chunk of their hourly rate.
And for the students or parents of students? Terms that may be a lot easier to deal with — paying for classes as and when they are completed as opposed to paying for a whole year up front.
Dealing with the teacher directly and not having to air grievances or complaints via a third party.
Locating the kind of teacher that can teach specific kinds of English skills — IELTS training, English literature classes, Business English classes, speaking, listening, reading and writing lessons.
This is what the student wants. To have access to the kind of teacher that can genuinely help them with the specific requirements they need in their English.
The one card that the online schools have in their hand right now is access to the Chinese market. Being Chinese they own all of that.
But all it needs is a pathway between the teacher in America, England or Australia and China, something to provide agency and those companies are redundant overnight.