Corporate Training and eLearning

 

Employee training has become an industry sector for itself in recent years. The learning and development field (L&D) is one of the newest disciplines of human resources (HR), and yet one that has gone through significant change in a short period of time even before COVID-19 [1].


In a 2016 report released by market research and advisory film Technavio the global corporate eLearning market was projected to reach USD 31 Billion in revenue by the end of 2020 [2]. A more recent report by Technavio has updated their projections for the segment to reach USD 38.09 Billion during 2020-2024, progressing at a CAGR of over 11% during the forecast period [3]. One of the key drivers for this market, according to Technavio, will be the reduction in employee training cost for employers.


To better understand what L&D is, it is important to adapt an employer’s perspective. While L&D includes onboarding new employees as well as training those in new positions (either new to the organization or from within), it also includes other types of professional development to engage and motivate employees. A good example of a recent ‘rush’ to eLearning by employers followed #MeToo, when US states considered mandating sexual harassment training by employers. Currently 6 states require employers to provide Sexual Harassment Prevention Training [4] and others either recommend it or impose other requirements such as mandating supervisors to receive training or limiting the requirement to medium-to-large corporations only [5].


The training sector is categorized into two types based on the operation of the sector [6]:

  1. SMBs are small and medium companies which use several affordable solutions for training their staff. These affordable solutions include learning management systems (LMS).
     

  2. Large companies have high financial resources and investments. These companies are implementing solutions depending on the specific demand for training the employees.

An example for a large company investing heavily in L&D is Kellogg, which in 216 hired its first Director of Global Learning. His early responsibilities were establishing a global L&D area at Kellogg and designing the overall learning framework and roadmap for the organization, followed by a rollout of a global learning management system that is unique to Kellogg [7]. This represents a significant investment in L&D for a company which has over 10,000 employees worldwide. The advantage of a large organization to have full control over its eLearning environment is the data generated by employees using it which leads to important insight and decision making.

While smaller companies cannot afford to hire a Director of Global Learning or develop their own LMS, they are still eyeing eLearning as a solution [8]. Small business can save money by replacing training staff and eliminating external training. This is true not only for employee training but also for customer training. Compliance classes (such as sexual harassment prevention) are often outsourced to specialized companies instead of developing these classes in-house.

According to a Brandon Hall Group report [9] there are the top 5 business priorities today:

 

  1. Improving customer experience

  2. Gaining market share

  3. Developing new products or services

  4. Retaining top talent

  5. Improving brand recognition


The fact that ‘retaining top talent’ is placed as one of the top priorities marks a shift from the external hiring spree of the past 30 years. It also reveals a challenge corporations have yet to crack [10]:

The average payback period for an external hire is
2.2 years.
The average tenure of a top candidate is 1.2 years.

External hires are leaving before organizations have realized a return on their investment and this recurring trend has become the catalyst for a greater focus on re-skilling and up-skilling efforts. 

In the USA, the corporate training market is estimated to be $30 Billion with online training accounting for about 20%.

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 US Corporate Training Market by Modality in Billions [11]

According to a survey conducted by LinkedIn Learning [1], L&D has been meeting less and less resistance both on the budgetary front and the executive one:

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Reports of L&D Budget Constraints [1]

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Active Executive Support of L&D [1]

In addition, Since 2017, 59% of talent developers spend more of their budget on online learning and 39% say they spend less on instructor-led training [1].

In response to the need of corporations to retain skilled employees, a ‘soft skill’ gap has been identified as a leading factor for employee retention. ‘Hard skills' are easily measured. They include abilities to use computer programs, reading, writing and other technical skills. By contrast, ‘soft skills’ are characteristics which are more difficult to measure. They include adaptability, analysis, collaboration and curiosity. 

According to a McKinsey Global Institute analysis [13], the majority of jobs are estimated to see 30% or more of their core activities automated, and the skills required to do them will shift from structured manual tasks and basic informational recall to higher-level creative and cognitive skills applied to unstructured work objectives.

Closing this ‘skill gap’ is increasingly becoming a priority for HR departments [1], and it includes identifying and assessing skills gaps as well as coaching employees to develop them. This highly individualized development approach has only recently been adopted, and adaptive eLearning has been identified as a significant assessment and training tool.

The increased use of eLearning in L&D has given birth to a new field: Learning Analytics. The goal for a learning department is to correlate their training activities with improved business results. Still, in a survey of over 100 global learning and development leaders, the main challenges to the field are [14]:

  • Measuring ROI

  • Demonstrating business impact

  • Gaining adoption of new learning tools and technologies

  • Framing the benefits of learning analytics with the executives

  • Gap of analytical talent on the learning team

  • Understanding xApi

  • Identifying advanced techniques to analyze impact

The conclusion is that while there is an increased adaptation of eLearning for corporate training, the field of learning analytics is in its infancy. Without measuring and analyzing the use of eLearning, adaptation cannot occur - be it in the eLearning platform itself or on the organizational level.

According to the U.S. Bureau of Labor Statistics, the Bloomberg Report, and the market research firm IBISWorld, these are the top 5 national industries using eLearning to improve staff development and attain higher profitability:

  • Healthcare. An outlook by the Bureau of Labor Statistics reports that more than half of the occupations within the healthcare industry are projected to increase 38% by 2024. As one of the most dynamic sectors of the economy, the healthcare industry has continuously used eLearning to train its professionals with relevant and effective materials and information. eLearning allows medical professionals to learn without disrupting their already demanding schedules. Information about diseases, treatment methods, using new medical technology, and administering helpful drugs is easily and quickly updated.

  • Computer And Information Technology. The Bureau of Labor Statistics reports that employment in the computer and information technology (IT) industry is expected to increase 13% within the next decade. This means that over 500,000 new positions including computer programmers, network administrators, and security analysts will need to be filled. 

  • Retail And eCommerce. The National Retail Federation (NRF) has reported that retail sales have averaged a 3.8% increase in 2017. Online retail sales for 2018 have grown even more at a rate of approximately 12%. Based on information released by the Census Bureau, thousands of online and in-store retail professionals are needed to fill management positions and inform customers about new products. The biggest challenge that retail businesses have used eLearning to solve is the skill development of employees.

  • Education. The education industry is expected to grow 7.2% in the next few years, and the introduction of eLearning has allowed this industry to become a commercial enterprise set to reach $325 billion per year by 2025.

  • Construction. Construction is one of the fastest growing industries using eLearning due to the rising need for engineers and contractors to access information in external environments and remote locations. The complexity of the construction industry has increased due to architectural design changes, environmental considerations, government regulations, and national building codes.

Finally, technological advancements are driving the adaptation of eLearning by corporations. SMAC (Social, Mobile, Analytics and Cloud) are the four technologies currently driving business innovation [2].

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Emerging technologies and new approaches that L&D professionals are excited for [12]

  1. 3rd Annual 2019 Workplace learning Report, LinkedIn Learning. Available online: https://learning.linkedin.com/content/dam/me/business/en-us/amp/learning-solutions/images/workplace-learning-report-2019/pdf/workplace-learning-report-2019.pdf

  2. eLearning Market Trends and Forecast 2017-2021, docebo. Available online: https://www.docebo.com/resource/elearning-market-trends-and-forecast-2017-2021/

  3. Corporate E-Learning Market 2020-2024 | Reduction in Employee Training Cost for Employers to Boost Growth | Technavio. BusinessWire. Available online: https://www.businesswire.com/news/home/20200504005262/en/Corporate-E-Learning-Market-2020-2024-Reduction-Employee-Training

  4. 6 States Now Mandate Sexual Harassment Prevention Training, by Matthew C. Berger for Workforce. Available online: https://www.workforce.com/news/6-states-now-mandate-sexual-harassment-prevention-training

  5. 2019 State-specific sexual harassment training requirements (United States), By Agnes Herba. Available online: https://www.opensesame.com/site/blog/2019-state-specific-sexual-harassment-training-requirements-united-states/

  6. U.S. E-Learning Market Report, 2026. Global Market Insights: https://www.gminsights.com/industry-analysis/elearning-market-size

  7. How LinkedIn Learning Helped Kellogg Advance Toward an Integrated Learning Culture, by Paul Petrone. Available online: https://learning.linkedin.com/blog/learning-thought-leadership/how-linkedin-learning-helped-kellogg-advance-toward-an-integrate

  8. 98% of All Companies Plan to Use E-Learning by 2020 with Opportunities for Small Biz, by Shubhomita Bose for Small Business Trends, Available online: https://smallbiztrends.com/2017/12/2018-e-learning-trends.html

  9. Enterprise E-Learning Trends 2020: A New Era of Learning, Docebo. Available online: https://www.docebo.com/resource/elearning-trends-2020-docebo-report/#:~:text=The%20year%202020%20signals%20the,new%20era%20for%20enterprise%20learning.&text=Emerging%20technology%20trends%20in%20the,play%20to%20ensure%20ongoing%20success.

  10. Job Security, Wage Stagnation, and the Quest for Top Talent, Aberdeen Group. Available online: https://www.aberdeen.com/hcm-essentials/blog-job-security-wage-stagnation-and-the-quest-for-top-talent/

  11. Education and Training Market Analysis: Immediate and Systemic Impact of COVID-19, May 2020 by William Blair & Company.

  12. Workforce and Learning Trends 2020, CopmTIA: A Soft Skills Gap Is Bringing a New Focus On Challenges and Solutions. Available Online: https://www.comptia.org/content/research/it-workforce-learning-trends-analysis

  13. Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages. McKinsey & Company. Available online: https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages#

  14. What’s Trending in Corporate Learning Analytics for 2019? Corporate Learning Week. Available online: https://plsadaptive.s3.amazonaws.com/eco/files/event_content/f7ECMMUVLH2b8kod7eQls28zktEvPfU36cHvu89n.pdf?X-Amz-Content-Sha256=UNSIGNED-PAYLOAD&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKIAIFDCUHI33FU3JW5A%2F20200818%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20200818T215310Z&X-Amz-SignedHeaders=host&X-Amz-Expires=600&X-Amz-Signature=d9628ca148a9bae1cf269e7aac7122c38c787c27ae9ec3148317d76ba3f68d31