Edtech in a Post-COVID-19 World: What the Workforce Education Sector is Learning from the Pandemic
* This story has also been posted to EdSurge. *
Over the past few months, COVID-19 has transformed the edtech landscape in ways few could have anticipated. As schools and universities shuttered, working adults (those who remained employed) were asked, seemingly overnight, to adapt to a fully remote workplace and a permanently altered way of doing business. Employers enacted broad layoffs and unemployment claims in the U.S. have reached nearly 46 million. Online learning — often touted as an up-and-coming way of delivering education — took its place on the world stage as the de facto model, regardless of how prepared students, employees and educators were for the experience. The pandemic has presented new and urgent needs facing students and workers alike, but has also yielded new opportunities for edtech to solve these challenges.
As edtech-focused investors, we set out to unpack the impact of the pandemic. How has the world of education and edtech transformed with COVID-19 and what solutions will now be of interest given the shifting priorities and challenges of stakeholders?
We interviewed a number of leaders and decision-makers in the space, including corporate VPs of learning and development, workforce strategists, and executives and corporate development teams of public and private education companies. Below are our key findings on where stakeholders in Workforce Training and Enterprise Learning believe technology will be mission-critical in addressing challenges out of, and beyond, COVID-19.
COVID-19 is likely to accelerate many of the trends we have been seeing in the future of work and is propelling an economic and digital transformation. It has created new demands of the workforce, from digital literacy to “power skills”. Frontline workers have been particularly impacted (the top three segments of job losses have occurred in food services, healthcare and social services, and retail, in total representing 50% of the 21 million jobs lost from February through April) and the new nature of remote work has presented challenges to all employees. Key questions around how to help the vulnerable access training and economic opportunity, and how to support meaningful personal development and skills advancement for all learners and workers, are even more critical today.
Workforce Training
- Learners need more affordable and shorter education-to-workforce pathways. In previous recessions, a subset of people flocked to higher education to weather the storm. In the current crisis, with higher education itself impacted, people need shorter-form, affordable training that immediately yields practical and in-demand skills, and can effectively guarantee job placement. Here are some of the non-traditional models / tech solutions in this category that we are most excited about:
- Boot camps for high-tech jobs, but also middle skills jobs in COVID-19 impacted industries such as allied health and manufacturing. We are excited about opportunities in the skilled trades and programs that in just 12–15 weeks can reskill a learner or worker into an alternate, higher-paying career path. We are interested in just-in-time training (SV Academy sales training for new hires paid for by employers) and last mile training (Pathstream employer-branded digital skills training for software platforms) that are tied into strong job placement prospects. Shorter programs are also better suited for alternate funding models, such as Income Share Agreements, where the feedback loop on the effectiveness of the training is tighter.
- Tech-enabled apprenticeships and high school-to-workforce pathways. The model of mixing classroom learning with practical vocational experience is very effective in Europe, where employers tend to have a longer-term view of retaining and training their employees. In the U.S., there are currently only ~650k apprentices, a small fraction of the workforce, but COVID-19 has exacerbated the need for stronger workforce-based education pathways.
- Transitional solutions that help people shift from one industry to another. Beyond education, we need tools to help people better navigate the complexities of today’s labor market. Technology can help define the shortest, most viable path to higher wage work based on existing skills and present options for training with demonstrable ROI. Guild Education recently developed Next Chapter to re-imagine the potential of outplacement services and guide displaced workers into higher-wage roles through education. Microsoft recently announced a training initiative to bring digital skills to 25 million people worldwide, with a focus on the data to identify the right in-demand jobs and learning paths.
- Tools measuring “equivalencies” in education. Unfortunately, there is significant friction in the labor market, with ~70 million low-wage workers without degrees who are overlooked by employers despite having abilities to perform higher-wage work. We are interested in the power of competency-based assessments that can interpret “equivalent” non-traditional education signals and other smarter pre-hire assessments that can predict fit and retention of candidates to ease this friction in the labor market friction and address labor market dislocations. Employers are increasingly open to these alternative credentials: Google recently started offering Career Certificate programs which it will consider the equivalent of a 4-year degree.
“Before, employers might have had 2–3 year plans around automation and to re-train workers but now with COVID-19, there is fear that employers will no longer do it if workers are already furloughed.” — Workforce & Talent Development Specialist
Enterprise Learning
- Sales opportunity into enterprise remains strong. Historically, Learning & Development (“L&D”) budgets have been closely correlated with payroll and there was concern with COVID-19 that corporate purchasing dollars would drop. Employers did note a broad reduction in budget (in particular for less essential offerings such as executive coaching) but expressed that investing in better tools to deliver effective training was more important than ever. In a SHRM survey, 68% of respondents reported sustaining their training budget through the pandemic. A surprising percentage of training budgets pre-COVID-19 were still allocated to classroom-based training and now companies are scrambling to find alternatives that are scalable across a fully distributed workforce.
- Broad transition to online has accelerated the shift from programmatic top-down learning to bottom-up, continuous, peer-to-peer learning. Given the speed at which L&D leaders needed to transition from in-person to virtual training, enterprises needed to prioritize “agility” over “efficiency”. Whereas in previous years, L&D would systematically distribute perfected, pre-packaged content, leaders are now looking to quickly spin up a variety of content in flexible ways. Employees are also demanding a greater volume of more varied content, and companies are responding. Coursera just raised $130mm and reported that the enterprise business, which markets continuing ed courses to 2,500+ companies, has grown 70% year over year and accounts for a quarter of Coursera’s revenue. Companies are increasingly interested in “portals” and resource hubs, such as Learning Experience Platforms (“LXP”) (Degreed), to not only aggregate but also curate content libraries, increase discoverability of both training materials and user-generated content, and build learning journeys that can create a directed educational experience.
- Virtual learning is here to stay, and focus is turning to engagement and efficacy. Leaders are exploring learning extensions (how to apply the knowledge, or “try now” activities) on top of video content, simulation-based training with practice environments, and micro-learning (such as tactical training-in-the-workflow (Lessonly) or performance support training) to deliver practical learning at the moment of need.
- Increased focus on skills mapping and development. Companies envision integrating the skills development platform with other HR systems, from the Applicant Tracking System to agile teaming to inner mobility/talent marketplace platforms. (Degreed recently acquired Adepto in December 2019 to track skills and then recently raised $32mm this past June in a down market to invest further in talent mobility.) There is a powerful opportunity to map the shortest learning pathway for each employee into a higher-paying role and suggest training resources or team projects to bridge that gap.
- Other interesting ideas L&D leaders mentioned include chatbots to nudge training, and bringing learning tools directly into the collaboration platform, such as Slack. Slack recently announced its acquisition of Rimeto, which will help employees see skills and proficiencies of co-workers to better find expertise across the business. Industry leaders have already begun re-imagining how corporate learning fits within the workflow tech ecosystem.
“How do you look at skills and develop them? How do those flow through into other HR ecosystems, such as succession planning, agile teaming and project-based teamwork?”
— Learning & Development Director, Public Financial Services Company“People are going to be bringing in Slack. Content is not going into the learning system, it’s going to be in the collaboration space, integrating with dashboards, productivity data, a real-time feeder of performance, with qualification and performance validation all the same cycle.” — Chief Learning Officer, Training Consulting Firm
We at Rethink have hope that these unprecedented times are elevating conversations around upskilling/reskilling pathways, workforce-based education and the potential of tech to deliver a better, more practical enterprise learning experience, as trends that have been in motion for the past decade are accelerated into sharp focus.
The full deck of our findings is below:
If you have thoughts or insights you’d like to share, or if you are a founder who is building solutions in these categories, we’d love to hear from you! Please reach out at jcheng@rteducation.com.
