COVID-19 has transformed the education technology 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.
As edtech-focused investors, we at Rethink Education set out to unpack the impact of the pandemic. How has the world of education and technology transformed with COVID-19 and what solutions will now be of interest given the shifting priorities and challenges of stakeholders?
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 industries hit hardest by job losses have occurred in food services, healthcare and social services, and retail, in total representing half of the 21 million jobs lost from February through April.) 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.
We interviewed a number of leaders and decision-makers in the space, including heads 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.
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 and opportunities in this category that we are most excited about:
1. Boot camps for high-tech jobs, but also middle-skills jobs in COVID-19 impacted industries such as allied healthcare and manufacturing. We are excited about opportunities in the skilled trades and programs that can reskill and prepare someone for an alternate, higher-paying career path in just 12 to 15 weeks. We are interested in just-in-time training (SV Academy offers sales training for new hires paid for by employers) and last-mile training (Pathstream offers employer-branded digital skills training for software platforms) that are tied into strong job placement prospects.
2. Tech-enabled apprenticeships and high school-to-workforce pathways. The model of mixing classroom learning with practical vocational experience has been 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 roughly 650,000 apprentices, a small fraction of the workforce, but COVID-19 has exacerbated the need for stronger workforce-based education pathways.
3. 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 surface the shortest, most viable path to higher wage work based on one’s existing skills and available training options that offer demonstrable return on investment. Guild Education recently developed Next Chapter to 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 using data to identify the right in-demand jobs and learning paths.
4. Tools measuring “equivalencies” in education. Unfortunately, there is significant friction in the labor market, with an estimated 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 assessments that can predict fit and retention of candidates to ease this friction in the labor market. 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.
In enterprise learning, here are the trends that we’re watching closely when it comes to how companies are supporting their employees.
1. Sales opportunities in enterprise markets remain strong. Historically, Learning & Development (“L&D”) budgets have been closely correlated with payroll, and there was concern that COVID-19 would lead to a 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 percent 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.
2. The transition to online has accelerated the shift from top-down programmatic 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 mix of content in flexible ways. Employees are also demanding a greater variety of resources, and companies are responding. Coursera just raised $130 million and reported that its enterprise business, which serves over 2,500 companies, has grown 70 percent year over year and now accounts for a quarter of its revenue.
Companies are also increasingly interested in “portals” and resource hubs, such as Learning Experience Platforms (“LXP”) like Degreed, to not only aggregate but also curate content libraries, increase the discoverability of both training materials and user-generated content, and build learning journeys that can create a directed educational experience.
3. Virtual learning is here to stay, and focus is turning to engagement and efficacy. Leaders are exploring new mediums that provide opportunities for learners to apply their knowledge, so that they’re not only watching video content. Simulations and other “try now” activities that support tactical training in the workflow, such as Lessonly, also help deliver practical learning at the moment of need.
4. Increased focus on skills mapping and development. Companies are looking to integrate the skills development platform with other HR systems, from applicant tracking systems to mobility and talent marketplace platforms. Degreed recently acquired Adepto in December 2019 to track skills and then recently raised $32 million in a down market to invest further in talent mobility. There is a powerful opportunity to map the shortest pathway for each employee to a higher-paying role and suggest training resources or team projects to bridge that gap.
5. Other interesting ideas L&D leaders mentioned include chatbots to provide training “nudges”, and bringing learning tools directly into collaboration platforms such as Slack. Slack recently acquired 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.
(Disclosure: Degreed, Guild Education, Lessonly, Pathstream and SV Academy are in Rethink’s portfolio.)