Outsourcing hits tutoring market

By Del Stover

5/17/05 -- You’ve heard of the global economy -- and its impact on all aspects of American life. But did you ever imagine the day would come when one of your students received after-school tutoring from a teacher in New Delhi?

Nationwide, a growing number of students -- already in the hundreds, if not a few thousand -- go online every week to brush up on their academic skills with a tutor living halfway around the world.

The phenomenon shouldn’t come as a total surprise. For years, U.S. corporations have relied on cheap overseas labor to produce consumer goods, and high-tech firms increasingly have sought India-based engineers to write software and man technical support centers.

Now, with the No Child Left Behind Act (NCLB) putting significant federal dollars into supplemental education services, tutoring has grown into a multibillion-dollar industry. With cheap labor, a large pool of English-speaking teachers, and improved online technology, India sees the opportunity to jump into the U.S. market.

“The demand for quality teaching is very high, and Indian teachers are valued highly, too, because of our strong academic backgrounds,” says Anirudh Phadke, a principal consultant with the New Delhi-based firm, Career Launcher. “This top quality, coupled with the NCLB requirements, are strong reasons to anticipate tremendous growth.”

But Phadke says, “We have not yet approached any local school districts because of some accreditation requirements mandated by most of them.”

Although some India-based firms charge half the rate of many U.S. companies, there are significant obstacles to overcome. Online tutoring remains a niche market, and although tutors are fluent in English, most companies have decided to limit instruction to math and science courses.

It’s also unclear whether many of these firms can take full advantage of NCLB’s bounty. Although there is nothing implicit in NCLB to bar overseas tutors from tapping federal funds, the idea has sparked resistance from teacher unions, federal lawmakers, and the tutoring industry.

“U.S. taxpayers should not be supporting off-shore educational staff,” says Steve Pines, executive director of the Education Industry Association.

Yet, even Pines acknowledges such concerns are a bit premature.

At best, only a few score to a few hundred India-based tutors are working with K-12 students, and it’s unclear how many -- if any -- overseas tutors have been paid with federal funds. To date, overseas teachers work almost exclusively as private tutors.

Given the growing market just for private tutors, however, these firms still have plenty of reason to build ties with U.S.-based tutoring companies to outsource work overseas, industry officials say. Career Launcher, a leader in the field, reportedly has as many as 1,500 students on its online rolls, although the company did not confirm that estimate.

“It’s still too early to expect big assignments to come to India without the help of American companies,” Phadke says.

But, as the Internet makes it possible to market directly to parents, Career Launcher, at least, is looking hard at a strategy of selling its services directly because “the profitability takes a big hit in the case of outsourced deals.”

Growing Stars Inc. built up its 200-student clientele through direct marketing. While the Seattle branch works directly to sign up parents, tutors work out of a high-tech learning center in Kochi, India.

Major selling points for the firm include affordability -- parents are charged just $20 an hour -- and the fact that parents don’t have to drive children to a tutoring center, says company spokesperson Wayne Burckhardt.