An upskilling model where learning happens daily, and on the job

Learnings on this Thesis

• The upskilling model is one where learning happens everyday to adapt to the increasingly complex world of work

  • In the next five years, 54% of the global workforce will need to upskill significantly, as more and more skills become obsolete.

  

• The world is increasingly learning at the workplace, and using more technology in that process.
  • We break down the space in three segments: the training space, the Learning & Development space, and the Benefits space.
    • Spending in all categories combines to about $350b globally – half of it goes to external spending and the other half goes to internal training (payroll of L&D and training professionals)
    • Yearly spending reaches $160B in the US market, with ~$80-100B market in both the EU and Asia.
    • While benefits space in general is worth about $300b in the US (with a tenth of that going towards benefit management and software), the learning benefits market is still very small

1. Training

General training

Safety Training

Leadership Training

Internal Operations Training

Coaching

2. Learning & Development

Internal L&D Content

LMS spending

Content developed internally

L&D Payroll

External L&D Content

Learning content platforms

Upskilling tools

3. Benefits

General benefits

Health Benefits, rewards, discounts, saving plans, commuter

Learning as a Benefit

Tuition reimbursement benefits

Ad-hoc learning benefits

• See our Learning & Development market map and players
• Most L&D products are not learner-friendly, but management-friendly
  • Most of the platforms used optimize for the manager experience as the buyer, over the employee and learner as they are not the decision-maker when it comes to product purchases.
  • Employee/learner centric solutions will win
    • Examples include LXPs centralizing the consumption of learning content through their own apps, or LMS platforms that have a horrible UI and see very low engagement
    • Moving towards more freedom for employees to choose how to learn - lightweight solutions that simply give access and support the learner might be much more successful
• Employee Usage is the key bottleneck
  • Taking the Learning as a Benefit market as an example, about 90% of employees in the US are eligible for some sort of learning benefit, however only 1-5% of employees ever use it.
  • When it comes to LMS, LXP or L&D platforms, the utilization rates also vary but engagement is generally pretty low
• The workforce is becoming more flexible and global
  • The workforce of the future is much more dependent on contractor/freelance work (will reach 50% of the US in a decade, self-employment already a majority in countries like India)
  • Benefits are growing in importance as gig economy players face regulatory and social pressures to extend to their contractors
• The future of upskilling is methodologies and platforms, not content
  • Traditional E-learning and training providers have long depended on putting up barriers for users to access content, so they could sell exclusive learning content. Today, however, by the time an e-learning company can create content, it's already outdated!
  • Closed ecosystems and traiditional vendores are on the way out → while partnering with such vendors is often a quick win for founders, it's generally not great for product development or growth in the long run
• L&D spending is often not seen as mission-critical to companies
  • Particularly leadership management platforms aren't perceived as such. Yet, investing is ever
  • This makes them the first products to be de-prioritized when cost cutting - what are L&D products that can become a core part of the mission/offering (internal operations and training) and workflow (Slack, HR) of startups?
• Regulatory changes will bring most countries closer to the UK levy tax used for apprenticeships and upskilling at work
  • US Department of Labor + States are looking to incentivize employers to invest in apprenticeships
  • This will enable training providers (like WhiteHat in the UK) to provide apprenticeships inside the employer

Market size

The training industry (or workforce development) as a whole is vast and diverse – here are some rough estimates of the size of different markets

• The global training market size is $370.3B globally – half of it is spent on external budget and the other half goes to internal training (payroll of L&D and training professionals)
• Yearly spending reaches $160B in the US market, with ~$80-100B market in both the EU and Asia.
• While benefits space in general is worth about $300b in the US (with a tenth of that going towards benefit management and software), the learning benefits market is still very small but growing!

Future Opportunities

• **Upskilling marketplace:** marketplace that measure ROI for employers and matches employees with the most relevant upskilling option available for them
• **OPM for employers:** helping companies develop, brand and market their own courses to the general public