Hubris.
I have been avoiding writing about the Nova scandal but it is no longer impossible to ignore the elephant in the room. For those of you who do not know, Nova is the largest English conversation school (eikaiwa) in Japan. With roughly seven thousand foreign language teachers and staff in its employ and nearly 420,000 students. Wait a minute…sorry, all of that should have been in the past tense.
Nova, the eikaiwa giant, is no more, and no amount of cuteness in its pink bunny logo can save it now.
Over the last few months the company has been disintegrating and now it seems there is no hope of a recovery. Its staff is basically unemployed, many of whom are still owed their salary from August. Nova, a company that advertised on television, in the airport, and was a nearly ubiquitous feature in Japanese train stations, had reached nearly iconic status. Shortly its rotting corpse will be thrown on the trash heap of history and I say good riddance.
I do salute the loyalty of the staff members who have worked diligently for months without pay, but I have to point out that it was pretty dumb to do so, considering how terribly Nova treated their employees. I have a lot more sympathy for the students who, for the most part, pay upfront for expensive year long contracts, and now, for the most part are basically screwed out of their money.
Nova`s main problem was hubris. It controlled nearly 50% of the Eikaiwa market with a widely recognised brand. Apparently it thought it could get away with a number of shenanigans indefinitely. After talking to several (ex) Nova employees it seems that the primary criteria for being hired at Nova was having a pulse. Until recently its core curriculum was apparently centered around a series of texts written in the 1970`s to teach English to Mexican immigrants living in America. Obviously this was a good choice because Spanish is so very similar to Japanese. In addition, students were not tied to any one teacher, making it impossible to tailor a class to the needs of any individual student. To overcome this problem, Nova created a rigid, factory like curriculum that while forcing untalented, uninterested teachers (of whom there were many) to teach at a minimum level, it also forced talented, dedicated, hardworking teachers (of whom there were many) to teach at a minimum level.
It was a great way to build customer loyalty, locking customers into a long, expensive contract (but a relatively cheap cost per lesson) for a barely acceptable product. If they wanted out they were refunded a fraction of their money.
There are also several rumors that long term, experienced and higher paid teachers would not get their contracts renewed in order to be replaced with newer, inexperienced, and lower paid instructors. The fact of the matter is that average full-time salaries have been falling for several years. With the government mandated minimum of 250,000 yen a month that can only mean that experienced teachers are being replaced with new blood. In addition to that, Nova in recent years has been increasingly avoiding the regulated minimum wage by hiring “part-time teachers” who were worked just shy of full time and paid a subsistence level wage. In addition to that Nova teachers were apparently defrauded as standard practice. Moving into a new apartment is quite expensive in Japan, with landlords frequently requiring up to six months rent as a deposit. So Nova rented out apartments and sublet them to their employees. The catch being that they would cram three strangers in a two or one bedroom apartment and charge them (for example) 35,000 yen/month each when the total rent on the apartment could be as low as 70,000 yen/month.
What a great way to build employee loyalty. Seriously. The fact that their staff did not abandon the company like rats from a sinking ship when their first paycheck was held says a lot about more about the character of their staff then it does about the management of the company. Or gullibility. Or both.
So what is the silver lining? Well, not a whole lot to be honest.
There is a chance, however slim, that this could be a good thing for language students in Japan. Nova was the 800 lb gorilla in the Eikaiwa biz. Without Nova, perhaps the industry can evolve from an expensive hobby staffed by tourist-teachers into one that provides meaningful instruction in foreign languages.
The main question is will the now-wizened Japanese consumer seek out and demand qualified and talented instructors, and be willing to pay for a quality product, or will they be duped again by a cute mascot and deceptively low prices?
Repatriate 