Adapt to survive: how technology is transforming the ... · Skills in the new world 11 Key technologies: What are the key technologies transforming learner engagement and content

Skills in the new worldAdapt to survive: how technology is transforming the skills and training landscape

March 2018

Technology

Training

Skills

Skills in the new world

Contents

Section Page

Foreword 05

Executive summary: key trends and business impact 08

How is the corporate skills and training market evolving? 15

How is eLearning technology changing the training landscape? 19

What are the key technologies transforming learner engagement and content delivery 25

How will technology change corporate training business models in the future? 31

Conclusions and key recommendations 36

About Grant Thornton 38

4 Skills in the New World

Skills in the new world 5

This report examines the impact of new technology on corporate training and skills education and how training providers need to adapt to survive in a rapidly evolving environment.

Examining the skills gap is a critical part of our enquiry into the Future of Work.1 It is clear that technology is driving rapid change, with more varied careers than ever before, meaning both corporates and individuals need to continually update their skills through lifelong learning.

Our report is based in part on the first in our series of roundtable discussions on skills in the new world. These provide an open forum for industry leaders, businesses and institutions that are shaping the future workforce to come together to discuss the opportunities and challenges in the ever-changing UK skills and training landscape. Our aim is to stimulate debate around how best to address the UK skills gap to support a vibrant economy.

We are indebted to our roundtable contributors and to a panel of experts with whom we have explored these issues in more detail for sharing their views for this report.

The training and skills landscape has seen one of its biggest shake-ups in decades with the introduction of the Apprenticeship Levy, aimed at plugging the UK skills shortage and creating clearer paths to employment. This change is occurring at a time when the sector is also being transformed by rapidly evolving and emerging technologies.

Foreword

The learning revolutionTechnology is transforming how companies engage with and develop learners to upskill and reskill their workforces. Innovations such as artificial intelligence (AI), simulation and gamification are changing the way the world learns. This allows greater access to high quality skills training and increases companies’ return on training investment to help create a more diverse and productive UK workforce.

This is central to the government’s skills agenda and the introduction of the Apprenticeship Levy. New research undertaken by Grant Thornton UK demonstrates a need for employers to modernise the way they approach apprenticeships.2 For example, in order to unlock talent and offer greater opportunity, 50% of employers say they value apprentices to bring in new ideas and innovation, and 51% to meet the needs of the business.

These trends were echoed in Chancellor Philip Hammond’s most recent Budget, which focused heavily on skills and technology, aiming to bolster UK productivity and economic growth. The government has committed over £75 million to AI research, another £100 million for an extra 8,000 science teachers and a further £76 million to boost digital skills training. This highlights the critical role of technology in addressing the skills gap, as well as the key part employers and training providers will play.

1 Grant Thornton UK, Future of Work Inquiry, 2018

2 Grant Thornton UK, Generation Apprentice, 5 March 2018

Profound market impactThe UK training sector is seeing a wave of innovative technologies in response to both changing employer needs and employee expectations. There is clearly a healthy investor appetite for the sector, particularly for high quality investments with an ed-tech focus, leading to an active M&A market despite the uncertain backdrop of Brexit and the initial impact of the Levy.

Notable deals over the last year or so have included the acquisition of one of the UK’s largest IT training providers, QA Limited, by CVC Capital Partners from Bregal Capital in a £700 million deal and Investcorp’s £27.5 million acquisition of eLearning business Impero. City & Guilds continued its acquisition spree with the purchase of Australian online training and compliance developer e3Learning.

Technology holds the key to creating a dynamic and agile skills market which enhances value. Although it is not a substitute for proven on-the-job skills training, technology can empower the workplace through inspiring content and help create more equal opportunities.

With technology’s impact on this sector set to increase further, we can expect to see a continued drive to consolidation in the UK market. Major players will seek scalable technologies supporting Levy-paying customer books and the critical mass necessary to meet changing skills and training demands.

Victoria GilesAssociate Director, Corporate FinanceM +44 7900 407264T +44 20 7865 2649E [email protected]

Keely WoodleyPartner and Head of Human Capital

“Technological and social change is disrupting the workplace, driving the requirement for lifelong learning. Employers, training providers and individuals will need to adapt to thrive, developing skills and mind-sets suited to the 21st century workplace.

The need for creating a continuous learning culture is helping to drive business growth and is forcing employers to look beyond academic attainment. Earn as you learn higher education is becoming more attractive as employers are equipping people with employer focused, relevant skills. Training is being deployed through increasingly sophisticated technology led channels. This enables individuals to progress through more accessible and personalised learning journeys than ever before.

Organisations and their training providers will need to stay agile, continually innovate and harness technology to improve operations, as well as manage and support people amidst this change.”

6 Skills in the new world

Our panel members are all actively involved in driving the profound changes in the skills, training and education landscape that are shaping the future UK workforce through advanced interactive learning models and platforms.

Our expert panel

John YatesManaging Director, Corporate Learning City & Guilds Group

Lisa CapperPrinciple and Director of Education & Skills, Nacro

Carole CarsonCEOBabington Group

Keely WoodleyPartner and Head of Human Capital Grant Thornton

Darren GrayHead of DigitalQA Limited

Victoria GilesAssociate Director, Corporate Finance Grant Thornton



Executive summary: key trends and business impact

Our first skills in the new world roundtable and panel discussion was based around four key questions facing the corporate skills and training sector. The common theme emerging from these discussions was that training providers must adapt to survive.


How is the corporate skills and training market evolving?

Key trends:

The consensus among our panel is that that the skills and training space is one of the most dynamic sectors of the UK economy. Constant policy change, shifting customer needs and disruptive technologies are attracting multiple investors and considerable deal activity.

Policy agendaGrowing private sector role in skills education

and apprenticeships to address the UK skills gap now well established

DiversificationTraditional training providers are broadening their offerings to meet the demand for personalised online learning

Shift in buying powerGreater influence and buying power of companies is attracting new market entrants

Market consolidationA fragmented market with many niche providers is

likely to see further corporate deal activity

Business implications• Track policy and regulatory change• Understand the political agenda• Align continuous learning offering to skills gaps• Continually review strategy

Q1.


Key drivers of change:

How is eLearning technology changing the corporate training landscape?

Our panel discussion confirmed that technology is affecting almost every aspect of the training landscape.

Employer needsMonitoring competencies and measuring training

impact are key to learning and development strategies, particularly in regulated sectors

Blended learningThere is still an important place for face-to-face

training as part of a blended offering incorporating emerging technologies

Broadening the talent poolTechnology has the power to open up access to learning and increase the diversity of the workforce

Learner expectations Informal, mobile, collaborative eLearning to suit individual learning styles at the point of need is the future of skills development

Striking a balanceMatching changing employer requirements to users’

expectations for engaging, personalised learning is likely to be key to success

Business implications• Focus on measurable outcomes and return on investment for clients• Create agile project teams to keep pace with evolving needs• Ensure regular feedback from learners• Support clients’ flexible working practices to increase workforce diversity• Help drive high performing and creative cultures

Q2.


Key technologies:

What are the key technologies transforming learner engagement and content delivery?

Our panel identified a bewildering array of technological innovations. The challenge is to identify which should be central to companies’ learning strategies and which are merely gimmicks.

Social learningCan have a demonstrable impact on performance

and a must-have for millennials

Mobile appsBecoming the device of choice for learners,

requiring intuitive design and content

Learning analyticsCreating new opportunities for employers to track learners’ progress and measure return on investment

Cloud solutionsSoftware-as-a-service, cloud-based eLearning solutions

allowing faster deployment across a business

AIPersonalised recommendations informed by users’ specific roles, learning styles and online interactions

Micro-learningIncreasing expectations for bite-sized, informal learning at any time through any device

GamificationIncreasingly mainstream among corporates,

but can be let down by poor execution

Q3.

Business implications• Develop high impact, self-led models of learning• Align training tools to the cultural shift to lifelong learning• Integrate informal learning methods to support personalised user journeys• Give employers the data to support their learning and development strategies


Key drivers of change:

How will technology change corporate training business models in the future?

The winners in this changing landscape will be those that can keep pace with technological breakthroughs and adapt quickly.

Increased competitionPressure on pricing and need for clearly

differentiated products and services

Acquisition strategyRequires astute deal-making and effective

post-deal integration

Retraining the trainersA focus on commercial outcomes may require a change in mindset of training professionals

Flight to qualityScrutiny of standards and outcome-based measurement may sort the winners from the losers

Scale of investment Requires compelling propositions to attract investors and development talent

Strategic partnershipsCan strengthen service offerings and provide

alternative routes to market

Q4.


Implications for…Learners• Bite-sized, continuous learning is

the key to upskilling• Employees are taking responsibility

for their own learning• Technology can deliver personalised

learning through filtered content and smart recommendations

• Learners will need to adapt as jobs continue to evolve

Corporate customers• Investment in smart eLearning

platforms creates huge opportunities, but also the risks of poor implementation

• Corporates need to focus on key skills gaps to drive productivity and return on investment

• Ongoing workforce engagement and feedback is vital to identify big wins

• Large organisations need to cut through ‘red tape’ to avoid learning and skills paralysis

Training providers• Agility is vital to delivering solutions

that meet changing client needs• There is consistent demand

for blended learning for maximum impact

• Clients want to identify competency gaps and measure the impact of learning on the business

• Learners expect instant access to meaningful but informal ways to learn and connect

…all must adapt to survive



How is the corporate training market evolving?

According to our skills in the new world roundtable participants corporate training is experiencing unprecedented innovation and investment, driven by growing demand and corporate training budgets.

This rapidly changing market is seeing a multitude of high growth providers looking to take corporate learning to the next level through the use of customised content, sophisticated learning platforms, interactive tools and mobile apps.

Tackling the skills agendaOur panel agreed that this changing training landscape has been heavily influenced by the UK government’s focus on skills and training. This aims to improve productivity and unlock the value of the UK workforce, particularly with the introduction of the Apprenticeship Levy.

Government measures to boost apprenticeships appear to be encouraging employers. According to our research, 79% say the Apprenticeship Levy has encouraged them to hire more apprentices than they would have done otherwise. Nearly a third (30%) of employers agree that the Levy will increase the quality of apprenticeships, 25% agree that it is a great way to get employers to pay for training and 22% state that it gives them more control over the apprenticeship system.3

The transformational power of technology is widely seen as a key weapon in addressing the UK skills gap and maintaining a vibrant economy. The skills gap is only likely to widen as a result of Brexit, reinforcing the need for high quality training to ensure the UK workforce is fit for the future.

The explosion of the UK corporate training market has occurred alongside the growing role of private sector providers in the wider skills and education environment. Our panelists suggest that the introduction of the Apprenticeship Levy means more funds in the hands of employers to upskill their workforces.

There has been a sharp increase in new entrants to the market since the introduction of the Levy. However, many have underestimated the significant policy, quality, compliance and employer challenges providers now face. Our panel suggests that the providers that are able to keep pace with policy and technological changes will perform strongest in an ever more competitive marketplace.

There is of course also growing demand for eLearning solutions and a huge potential base of new learners in emerging regions outside the UK, particularly in Asia, the Middle East, Africa and Latin America.4

eLearning is one of the most dynamic and fastest growing markets in the world. Corporate learning is the key growth segment of this global market.

Global eLearning revenues are expected to be over US$126 billion by 2020.Source: Technavio market report

The global corporate learning market is expected to be worth US$31 billion by 2020.Source: Technavio market report


4 Docebo, eLearning Market Trends And Forecast 2017-2021, 2016


DiversificationOur panel highlighted the fact that this rapidly evolving market encompasses a growing range of technologies used by businesses to facilitate continuous learning and development in the workforce.

This spans learning management systems (LMS), packaged content, authoring tools to help create and manage content, distribution to end users through virtual learning environments and applications, as well as specialist support services such as online collaboration platforms, mentoring, assessment and accreditation.

Beyond LMS

The LMS market has seen particularly strong growth over the last few years, with hundreds of LMS platforms designed to help companies manage all aspects of their employee training.

However, these LMS solutions are increasingly required to manage the widening content management agenda. Many were designed in the early 2000s to replicate the classroom dynamic in a virtual environment and require continuous content development to remain relevant.

Sophisticated corporate customers with significant buying power and a wide choice of platforms are increasingly switching providers in search of improved user experience and better administration. They want increasingly smart authoring tools with responsive design, increased video content, user-generated content creation and reporting analytics capabilities.

According to our panelists, many LMS providers have diversified their offerings as the focus has shifted towards talent management and continuous learning, as well as platforms that deliver real-time, always-on, mobile learning experiences supported by social media.

Market fragmentationOur panel suggested that the extensive range of technical, professional and other essential skills required by today’s workforce has resulted in a very fragmented training market. Many niche providers are designing solutions for specific sectors or requirements such as management, problem-solving, leadership, behavior development and other non-technical soft skills.

This is in addition to the more established requirements of corporates for mandatory compliance, professional development and job or sector specific training, which are currently most in demand.

According to a number of our roundtable participants, this makes further consolidation in the market likely.

The UK LMS market is forecast to be worth over USD15 billion by 2021.Source: Technavio market report

“ Since 2010 we’ve diversified our activities very rapidly to solve employer needs well beyond the qualification. The qualification is only one solution these days and of course a decreasing amount of funding goes to qualifications from government. We’re applying our technology and new business models to solve those employer needs.”

John Yates, Managing Director, Corporate Learning City & Guilds Group


5 Docebo, eLearning Market Trends And Forecast 2017-2021, 2016

Increased investment

As a result of these trends, the training and skills market is seeing a sharp rise in investment from both large corporates and private equity firms. The recurring revenue streams created by companies seeking to spend their Levy budgets year-on-year, as well as through license fees for technology platforms makes these attractive investments.

UK start-ups with unique ed-tech propositions and IP have become very attractive investments in a market with such strong growth prospects. The UK is ranked fourth for ed-tech start-up funding, behind the US, India and China.5

By contrast, traditional apprenticeship providers are seen by a number of our panelists as higher risks for investors, in a world where one poor Ofsted inspection can threaten their survival. However, more established providers with strong sector expertise underpinned by a unique technology solution provide a more stable investment platform for growth.

Deal activityThe acquisition of one of the UK’s largest IT training providers, QA Limited, by CVC Capital Partners from Bregal Capital in a £700 million deal, is indicative of recent investor interest in the skills sector. QA provides training for UK businesses in areas such as cyber security, cloud computing and big data at learning centres throughout the country.

City & Guilds’ latest acquisition, e3Learning, is one of Australia’s largest dedicated corporate eLearning and compliance providers. It specialises in workforce risk management and online compliance training for employers.

Investcorp’s £27.5 million acquisition of Impero is focused on e-safety, classroom and network user management software.

The apprenticeship space has also seen some notable deals. Private equity firm RJD Partners acquired Babington Group, one of the UK’s leading providers of apprenticeships and skills training, in a £22 million secondary buyout (on which Grant Thornton advised). Babington provides government-funded apprenticeship training in areas including accountancy, financial services and digital marketing, as well as privately funded programmes including leadership and management.

Another provider of apprenticeship programmes and commercial training, Lifetime, was acquired by Silverfleet Capital. Lifetime is one of the UK’s largest vocational training providers, with around 22,000 learners annually.

More than 400 ed-tech start-up deals attracted an estimated US$2.2 billion globally in 2016.Source: Docebo market report

An evolving market: key recommendations• Stay close to policy makers to keep pace with regulatory and compliance change• Engage political due diligence experts to ensure alignment to evolving policy views and agendas• Explore how technology can support continuous learning aligned more closely to personal skills gaps• Build a network of trusted advisers to help shape and challenge strategy

“ The need to continually invest in new content is increasing all the time.”Roundtable participant


Apprenticeships are likely to become much more prevalent as an alternative learning journey to university as a result of the introduction of the Apprenticeship Levy.

Our recent survey showed that 70% of young people and 79% of parents think apprenticeships offer good career prospects and almost half (42%) of young people think apprenticeships and university degrees have the same value. Around the same percentage of parents (45%) think a university degree delivers less value than it used to.6

While many employers are becoming more engaged with the changes in apprenticeship training, they have so far been slow at converting this into apprenticeships numbers on the ground, presenting a challenge for the growing number of training providers. In fact, there was a 61% drop in apprenticeship numbers reported last year. Our survey shows that 44% of corporates do not currently use apprenticeships as a means of upskilling people.7

There is perhaps a need for greater clarity from government on how apprenticeships should be delivered. There has also been some criticism from employers about the amount of paperwork involved with the Apprenticeship Levy process, while some are unhappy that Levy-funded learning must include 20% off-the-job training. This is a particular concern among SMEs.

However, if greater flexibility is introduced to address these issues, the apprenticeship training market will continue to present opportunities for new and established training providers. Greater competition and the scale of investment required in new technology make further consolidation in the market and a gradual weeding out of lower quality providers likely.

With employers holding the budgets and increasingly dictating the type of apprenticeship training they want, there will be growing interest in the technologies required to track the progress of individuals through their apprenticeships and to measure business impact. These technology tools will no doubt play a key role in delivering the benefits of the three-way dynamic between apprentices, training providers and employers and will be a key battleground in a competitive sector.

“Employers are now holding the purse strings after the introduction of the Apprenticeship Levy and as a result they will want more access to progress data concerning their apprentices.”

Lisa Capper, Principle and Director of Education & Skills, Nacro

“I think overall we’ll see fewer providers supplying apprenticeship training and in a more commercial way, so some niche providers may be squeezed out.” Carole Carson, CEO, Babington Group



The future of apprenticeships



How is eLearning technology changing the corporate training landscape?

The corporate training arena is being transformed by changing priorities and disruptive technologies, with a seemingly insatiable appetite for eLearning, online content and digitisation.

The increasing adoption of eLearning, allowing on-demand access anytime, anywhere, reflects both changing employer needs and user expectations. This has put increasingly tech-savvy users firmly at the centre of the learning environment and rapidly increased demand for the latest training tools and agile platforms.

Those providers that can best match changing employer needs to a more responsive user interface are likely to be the most successful.

Changing employer needsOur panelists confirm that employers are increasingly changing the training agenda, replacing traditional ‘chalk and talk’ with a range of technologies to help employees learn at their own pace and in a much more personalised way.

Mandatory learning is a core element of companies’ learning and development strategies, particularly in regulated sectors such as financial services, where there are stiff penalties for non-compliance. Informal, mobile, collaborative eLearning is increasingly seen as the solution.

As a result, the traditional, structured approach to learning and development is being married with continuous, informal learning at the point of need as part of employees’ everyday working lives.

Scalable eLearning allows employers to reach a wider number of users in multiple locations at any time at a fraction of the cost of the traditional instructor-led training model. Our panelists agree that it also reduces time away from work and can deliver more consistent quality.

Our panel of experts was clear that technology is affecting almost every aspect of the training and education landscape.

80% of businesses expect the use of virtual classrooms to increase or stay the same.

82% expect the same trend in use of social learning.Source: Fosway Group

“ It’s about flipped learning – not corporates pushing training at their employees, but adapting to the way that they actually want to learn in the modern workplace.”Roundtable participant “ Some of the most rapid changes are in

regulated markets where employers can’t afford to get training wrong because of the penalties for non-compliance.”Roundtable participant



Blended learningThe blended approach to learning, combining both classroom and digital in response to changing learning habits, appears to be becoming the norm.

Our panelists felt that the ‘death of the classroom’ has perhaps been over-exaggerated and there is still clearly a demand for face-to-face learning environments that allow learners to interact with their trainers and peers.

Flexibility and user choice will continue to be key, with eLearning solutions allowing for personal intervention or access to online tutors outside normal working hours for example.

Supporting corporate talent strategyThe increased appetite for upskilling and lifelong learning in the work place reflects a wider transformation in HR management in many businesses aimed at aligning learning more closely to business needs as part of an overall talent strategy. In our survey, 91% of employers believe offering formal training and development opportunities increases employee wellbeing.8

A number of panelists pointed to the fact that learning and development are increasingly seen as the gatekeepers of productivity within a business and often have the budgets to match. Performance management is widely seen as a continuous process with real-time feedback and intervention where necessary. This means a greater emphasis on measuring the impact of learning on business outcomes to understand a company’s return on investment.

“ Employers want real-time data to track the progress of apprentices through an easy-to-use dashboard. They’re looking for payment by results.”Roundtable participant

“ We need to rethink performance management to a real-time feedback system that has coaching and development at its core.”Roundtable participant

“ We’re seeing consistent growth in our ‘attend from anywhere’ offer where learners can join our events from their home or office, alongside continuing demand from those who want to come to our classrooms. So, at a very practical level, technology is helping us provide an ever more responsive offer to our learners. We see opportunities as we increasingly integrate classroom and digital, seamlessly, moving between ‘modes’ of activity, learning and work, enabled by technology.”Darren Gray, Head of Digital, QA Limited

“ Our higher-level learners in particular want to be able to access technology but they also want to be able to see someone face-to-face. I don’t think training will ever be all online. Human contact is still needed, both peer-to-peer and with tutors.”Carole Carson, CEO, Babington Group


Changing employee expectations

“ Nothing has changed and yet everything has changed! We see no let-up in demand for the classroom experience. Learners still want that focused time away from the office, learning with others in a dedicated space. But what we all know is that the rate of change for individuals and organisations is now so rapid that what you do in your job, the skills you need and the technology you use is changing constantly, and so learning is no longer a once a year, scheduled event.

Digital is key to satisfying this need for learning on-demand, where and when you need it. And of course there is a huge shift is in the expectations of users who demand a consumer-grade experience. At QA, we are focused on delivering that experience for all our learners, seamlessly across classroom and digital platforms.”Darren Gray, Head of Digital, QA Limited

With rapid change in the skills required in the modern workplace, panelists stressed that learning is now rarely based on a formal schedule of events. Changing attitudes to self-training mean many more employees take the initiative to identify their own learning pathways to develop their careers.

Commenting on the millennial workforce that has grown up in the on-demand economy, our experts suggest that younger employees expect to be able to select high-quality interactive training that suits their particular learning style whenever they need it, often enriched by elements of their habitual use of social media.

“ Corporate training is increasingly learner-led. Employees need to be motivated to want to engage.”Roundtable participant

73% of adults consider themselves lifelong learners.

63% of working people say they are professional learners.Source: Pew Research Centre

70% of employees are motivated to learn more through mobile learning.Source: Docebo market report


Encouraging diversity in the work placeOur panel also highlighted the potential role of technology in increasing access to learning for those who may have previously been excluded from training opportunities.

Despite the prevalence of technology, some people with potentially valuable skills may not have the access to the necessary multi-media devices for eLearning, or lack the financial means or technical knowledge to use them.

If the UK is to make the most of its own human resources, the panel felt that people from all walks of life, including those with physical disabilities, mental impairments or from disadvantaged backgrounds, will need access to the benefits of eLearning to improve their employability, bringing greater diversity to the workforce. Interestingly, 86% of corporate employers believe that apprenticeships increase social mobility in their organisation. 9

• Develop robust diagnostic, tracking and reporting tools and processes to help clients measure outcomes and return on investment

• Create agile project teams that can adapt quickly to evolving employers’ and learners’ individual needs

• Ensure regular feedback opportunities, for example through surveys or focus groups to understand changing demands and capture new ideas

• Help clients to develop agile working practices to increase diversity and social mobility in the workplace

• Consider ways in which clients’ recruitment processes can become more inclusive in order to create high performing and creative cultures

eLearning landscape: key recommendations




What are the key technologies transforming learner engagement and content delivery?

Social learningAs more millennials enter the workplace the demand for a more social learning experience is expected to increase exponentially. Our roundtable discussion highlighted that regardless of age, social learning has become a common and impactful way of upskilling.

Social technologies that allow learners to develop their skills by participating in online discussions and presentations focused on their personal interests and activities have a demonstrable impact on learner engagement and performance.

These tools are seen as part of the millennial generation’s DNA, allowing learners to share experiences and communicate before, during and after each training event. Combined with AI, these interactions can be used to measure levels of engagement and understanding of new skills and their impact on business performance. Some panelists however expressed a concern that this could alienate some older learners.

As the UK workforce continues to age and older generations remain a vital part of the UK skills base, employers and training providers will have to work hard to achieve the right balance between different generations’ learning preferences.

Micro-learningMicro-learning, bite-sized, informal learning nuggets usually under five minutes long designed in rich media formats to meet a specific learning outcome, is an increasingly important part of the blended training mix identified by our panel.

Micro-learning is particularly suited to time-poor corporate learners who want to improve their skills at their own convenience through any device. However the consensus of our panel was that shorter attention spans of younger learners are largely a myth. The key is understanding different learning styles and tailoring training to them.

Organisations such as Google are apparently operating ‘invisible’ corporate universities, delivering this type of personalised, just-in-time learning to employees based on their job function and performance.

Our roundtable discussion with industry leaders identified a wide variety of important technological changes and innovations that they believe will drive change in the sector over the next few years.

“ One of the biggest challenges for companies is identifying the right channels to use because there’s now so much choice.”Roundtable participant


Mobile apps

Use of mobile apps in corporate learning has lagged behind the wider mobile-first trend in both the consumer and business worlds. However, our panel highlighted the proliferation of mobile learning tools entering the market as training providers switch their focus from the desktop and laptop towards mobile.

It is estimated that 40% of job candidates now apply through their mobiles and 60% of all online video is consumed on mobile devices.10 Millennials’ habitual use of smartphones means they are an increasingly unavoidable part of the learning experience.

Panelists agreed that mobile is the ideal delivery mechanism for bite-sized informal learning, but this requires mobile-first intuitive design and content.

“ We have, in our pockets, incredibly powerful tools to find, consume and also produce new knowledge and we do so in our personal lives, all day, every day. It’s almost a Pavlovian response to pick up your phone when you have a free minute. We should be harnessing that and yet the adoption of mobile in corporate learning has lagged behind this absolute transformation of our personal behaviours because timely, relevant solutions have not yet found their way into our habitual routine. Increasingly, learners will seamlessly shift across different devices and modalities – working, connecting with and interacting with colleagues and the knowledge base.”Darren Gray, Head of Digital, QA Limited

47% of organisations use mobile devices in their training programmes.Source: P&S market research

10 Kleiner Perkins, Internet Trends, 2017


Gamification

Gamification or game-based learning is now widely accepted as one of the keys to making learning more engaging and effective.

Previously this was incompatible with the corporate environment, time consuming and expensive to develop. Game-based training is now rapidly gaining traction in the corporate world, in the wake of successful uptake of game-base recruiting and job assessment. Worldwide revenues of game-based learning products was US$2.6 billion in 2016.11 However, our panel suggested that gamification has generally been slower to take off in larger organisations already invested in a tried and tested training approach.

By tapping into users’ love of games, particularly among the younger generation who have grown up very attached to their video game consoles, it is widely accepted that games are very effective in engaging long-term memory. The natural extension of this trend, according to some of our panelists, is more realistic gaming environments using virtual and augmented reality.

Panelists felt that done well, game-based learning can produce spectacular results, but is often let down by poor execution, failing to reflect the appropriate level of learning or the practical application of learning for business benefit.

“ The eLearning industry loves a ‘silver bullet’ and much has been made of gamification, but much of it feels hollow and comes, perhaps, at the expense of true engagement. Providing real challenge, getting someone to lean forward and engage emotionally is far more effective. For example, we are looking to take our Cyberlabs, in which teams attack and defend against each other in ‘capture the flag’ events online.”Darren Gray, Head of Digital, QA Limited

80%

of learners say they would be more productive if learning was more game-like.Source: Technavio market report

11 Ambient Insight


Learning analyticsA growing range of learning analytics tools designed to help organisations make optimal use of eLearning is fundamentally changing the corporate training landscape.

Applying big data to corporate training, the new breed of platforms and interactive dashboards are increasingly giving employers a clearer real-time picture of the skills issues within their businesses as part of their wider talent strategies.

Panelists agreed that these tools allow organisations to assess the progress of individual learners and create more effective and efficient learning interventions, as well as measuring the impact of learning on the organisation and, ultimately, the return on their training investment. This is attracting particular attention from Levy-paying employers looking to measure the benefits of their fledgling apprenticeship schemes.

Artificial intelligenceThe industry consensus is that AI is the big game changer in refining how businesses deliver the personalised learning experience that employees want, based on their specific roles and learning styles.

The latest xAPI technology can be used to collect data from any learning experience, completed in any environment on any device to create personalised learning recommendations.

This not only allows organisations to match online training to individual users but to adapt and refine content based on the user’s specific interactions with learning resources and ensure appropriate interventions at the right time. This technology can also be used to assess the impact of learning on individual performance and business outcomes.

“ People analytics has the potential to connect learning and development more than ever to business performance.”Roundtable participant

“ It’s all about visibility – of skills, application of learning and impact on the business where learning is being applied.”


“ The driver for these changes is monitoring and measuring student progress, and of course employers want to have access so they can see in real time how their apprentices are performing.”Lisa Capper, Head of Education and Skills, Nacro

“ AI will be one of the key drivers in anticipating and providing contextualised experiences at the point of need. This is the learning industry’s version of Amazon’s product recommendation engine but at a far deeper level, where career trajectories, recruitment trends and skills analysis are used to drive individual and organisational performance. This will be different for everybody. It’s early days but this is absolutely at the heart of QA’s plans going forwards as it is the key to individualised and responsive learning.’Darren Gray, Head of Digital, QA Limited


Cloud solutionsCloud-based, software-as-a-service (SaaS) eLearning solutions are expected to lead the market over the next few years as corporates and institutions review their traditional LMS and move away from on-premises deployment.

Many corporates are investing in cloud-based IT infrastructure and training their admin staff to address customisation issues and integration of legacy systems to allow for smooth eLearning deployment.

These cloud-based systems are better able to support multiple forms of eLearning, with the benefits of faster implementation and lower capital investment.

• Develop high impact, self-led models of learning such as mobile tools to give learners ownership of their continuous development and easy access to high quality, relevant content

• Equip corporates and individuals with the right range of tools to align to the cultural shift to lifelong learning.

• Consider how informal learning methods can support personalised online user journeys and increase employees’ appetite for learning

• Provide employers with the data diagnostics and reporting tools to identify competence gaps and support their talent development strategies

Emerging technologies: key recommendations



How will technology change corporate training business models in the future?

The final issue for discussion by our panel of experts was the impact of the evolving eLearning landscape on business models within the sector and some of the strategies required to capitalise on new market opportunities.

Pace of change Adapting to change was seen by our panel as vital for corporate training providers that want to make the most of the fundamental shake-up in the sector. Simply dealing with the pace of change in the market and understanding the potential of breakthrough technologies like AI and virtual reality will be a major challenge. Rapid technology obsolescence and user turnover could be the Achilles heel of some providers.

This will require continuous investment in an in-depth and up-to-date understanding of both employer needs and changing employee expectations, especially among the generation now entering the workforce.

Increased competition

The huge growth potential of the eLearning market is likely to continue to attract new entrants. This will add to the intense competition among existing providers and the strong bargaining power of corporate customers to put continued pressure on pricing.

In addition, training providers face competition from the growing range of free expert-generated content and the increasing popularity of open-source solutions such as massive open online courses (MOOCs), which allow unlimited numbers of users to take part at no cost.

Providers will need to continually innovate to differentiate their products and services.

More than 35 million people are already signed up to MOOCs such as Udacity, Coursera and FutureLear.Source: Class Central

“ We have a dedicated team who survey a large proportion of our learners to get their feedback. That informs our continuous improvement activity.”Carole Carson, CEO, Babington Group


Scale of investmentModifying learning materials designed for the classroom to suit new eLearning technologies or developing new products and services from scratch can require huge investment, not least in the development and programming talent required.

Our panel felt that the very shortage of IT skills in the UK that some providers are attempting to address through their eLearning solutions will, ironically, continue to present a major challenge to innovators looking for high-calibre developers.

Providers will need compelling stories to attract both the right investors and the right talent.

Acquisition strategy The obvious alternative to investing in and developing state-of-the-art eLearning solutions in this rapidly evolving market is through acquisition.

The adapt to survive theme of our roundtable discussion is clearly echoed in the acquisitions made by established players such as City & Guilds, which has rapidly diversified its activities over the last few years in response to changing employer needs. Many market observers believe it is likely to see continued acquisition activity from major players with the necessary financial resources.

The key to successful acquisition strategy will clearly be the ability of acquirers to manage post-deal integration to maximise synergies between the emerging technologies they acquire.

Strategic partnershipsA number of training providers commented that they are building strategic partnerships to both strengthen their offering and gain access to potential markets, particularly in the apprenticeship space.

Some providers are increasingly teaming up with universities, colleges and professional bodies to meet the demand for eLearning service from Levy-paying companies. Working with professional services firms to deliver apprenticeship training can also open up opportunities among these firms’ client bases.

“ We’re building partnerships with some universities, for example, which are becoming interested in higher level apprenticeships. We can act as a feeder to them and vice versa. We’re also built some strong strategic relationships to support a more broader offer for employers such as the Collab Group, which is a collection of 36 elite colleges in the UK, as well as partners such as the Chartered Management Institute and Grant Thornton.”Carole Carson, CEO, Babington Group

“ We believe that the acquisitions and investments we’ve made put us in a pretty good place, but some of it is still in individual silos so we’ve got to do a lot of joining together. We’re very excited about that.”



Since 2010 City & Guilds Group has diversified its activities rapidly in response to changing employer needs well beyond its traditional qualifications. The Group is unusual in being a not-for-profit organisation which directs the operating surplus it generates towards achieving its central purpose of helping people, organisations and economies to develop their skills for growth.

The Group has made a string of acquisitions since 2010 – the first in its 140 year history – as well as investing approaching £4 million in five portfolio companies focused on technology and learning through its New Venture Fund.

In financial terms the Group’s acquisitions have transformed it from a £100 million revenue business based almost exclusively on qualifications awarded through colleges and private training providers, to a Group on track to reach revenues of £200 million by 2020, over half of which will come from employers.

Acquisitions reflecting emerging trendsCity & Guilds’ investments and acquisitions are indicative of the many inter-related technologies reshaping the corporate learning environment.

They include Learning Assistant, an e-portfolio designed to support the efficiency and effectiveness of assessment and learning, closely aligned with City & Guilds’ skills credential business and acquired in 2010. The Group acquired Kineo in 2012 to expand its offer to employers by providing complete corporate learning solutions and has subsequently acquired Kineo’s Pacific and South African operations, as well as its Nine Lanterns business in 2015.

In 2014 the Group acquired Mindset Profiler, a workflow tool designed to help FE colleges manage the complications of funding. This was followed by the acquisition of The Oxford Group in 2015 to provide leadership development, executive coaching and management training services to multi-national employers.

Digitalme, a business built around recognising individual competencies and helping employers to find talent, joined the City & Guilds Group in 2016 to boost its digital credentials offer. This was followed by the acquisitions of e3Learning, an online higher education organisation owned by several Australian universities, and Gen2, the largest training provider to the UK’s civil nuclear industry, most closely associated with Sellafield.

Investing in new venturesThe philosophy behind City & Guilds’ New Venture Fund is to invest in companies that are closely aligned with the Group’s strategy, but are stretching the boundaries of eLearning even further. The Group provides funding in return for an equity stake and recipients benefit from City & Guilds’ expertise and resources to help get their ideas off the ground.

New Venture Fund recipients include Filtered, an online training platform for knowledge workers that personalises learning material for each user to maximise the value of training time, and who have now produced an intelligent curation engine for learning recommendations. Another is Credly, a US-based digital credentials service provider behind the market-leading platform for issuing, managing, sharing and validating digital credentials.

GetMyFirstJob is an innovative web platform that matches young people to apprenticeships, while EmpowerTheUser is an award-winning platform that delivers simulations for training and assessing workplace skills and behaviours. Finally, HT2 Labs describes itself as the R&D of workplace digital learning and aims to make learning more personal, social and measurable.

A common factor behind all of these investee companies is the power of data to connect the learning experience to business outcomes. They reflect the changing needs of employers for more effective and efficient learning interventions and greater visibility of skills, of the application of learning and of business impact.

Adapt to survive in action: City & Guilds Group



Retraining the trainers Just as the nature of learning is changing, so is the role of the people responsible for its delivery. Effective delivery of eLearning requires a change in mindset among training professionals to allow learners to make the most of the technology available, with a greater focus on performance measurement and commercial outcomes.

Many established training professionals may be late adopters of technology themselves and lack the skills to incorporate advanced technology into their training methods.

Our panel suggest that this may require an extensive staff retraining commitment for some providers to bring their own skills base up to speed.

Quality standardsWith no shortage of providers entering the market to cater to the needs and training budgets of Levy-paying companies, quality standards will continue to be under scrutiny. This is particularly in light of the adverse publicity surrounding the failure of Learn Direct.

The so-called democratisation of learning, allowing people to gain work-related digital credentials as they progress through their careers, raises important questions about the need for common standards and accreditation of new forms of learning. This underlines the importance of outcomes-based measurement.

It will be critical for providers to keep pace with the latest thinking on accreditation and qualifications, as well as with changing regulation.

“ The challenge is getting the right calibre of person to deliver training, and at the right level, with the right experience and ability with technology. So, we have to train the trainers too.”Carole Carson, CEO, Babington Group

“ Nothing replaces good learning, whatever the medium.”Roundtable participant


Conclusions and key recommendations

It is clear from our roundtable and panel discussions that technology is profoundly affecting every facet of the corporate training and skills education sector.

Learners Corporate customers

Training providers

The emerging technologies discussed in this report are at the heart of delivering the personalised, bite-sized, lifelong learning required to re-skill and upskill the UK workforce.

Employees are increasingly taking responsibility for their own learning as part of a cultural shift to a ‘school of life’ ethos, rather than seeing education as something that stops at the age of 16, 18 or 21.

Technology will continue to facilitate this shift in mindset, with tailored learning made possible by smart recommendations, filtered content and digital passporting of skills.

Learners will need to adapt to survive as roles and job descriptions continue to shift and evolve.

Companies have an increasing need to develop sophisticated eLearning platforms. This presents huge opportunities to develop their people’s skills, but also brings considerable risks around systems integration and implementation.

Companies need to focus on what is most important in delivering their learning and development strategies to drive productivity and return on investment.

Ongoing workforce engagement, for example through employee surveys, will be vital in identifying the biggest eLearning wins.

Many larger organisations will need to cut through the familiar layers of ‘red tape’ to identify their real skills needs in order to capitalise on the opportunities and avoid learning and skills paralysis.

Providers will need to be agile enough to adapt and respond to these changing learner and employer needs.

The demand for blended learning, combining digital with face-to-face contact, to deliver maximum impact is likely to be a consistent feature of the market for the foreseeable future.

Providers need to recognise the fundamental shift in learner expectations towards instant access and more meaningful but informal ways to learn.

This will be combined with a growing need for diagnostic tools to help employers identify skills gaps and measure the impact of learning on business performance.

Providers will need to be on their toes to stay ahead of the game.

To truly deliver the benefits and have the greatest possible impact on the UK skills agenda, individual learners, their employers and training provider partners will need to embrace change.


Next steps?This report has discussed how new technology will continue to affect providers in the delivery of corporate training and skills education. It highlights the importance of adapting to a changing environment to create sustainable business models for the future.

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If you would like to explore these themes and their implications for your business, please contact:

Victoria Giles M +44 7900 407264T +44 20 7865 2649E [email protected]

Keely WoodleyM +44 7967 622934T +44 20 7728 2690E [email protected]

Grant Thornton UK LLP @GrantThorntonUK Grant Thornton UK LLP


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Adapt to survive: how technology is transforming the ... · Skills in the new world 11 Key technologies: What are the key technologies transforming learner engagement and content