Learning for life

The COVID-19 pandemic has significantly disrupted education, particularly for children. However, it has also catalysed a revolution in the workplace, with a greater focus on skills due to the shift to remote working, increased digitisation and automation, and a tight labour market. This report explores the evolving attitudes towards learning and development (L&D) within the workplace, primarily through a survey of 300 companies across five key markets. It also delves into what constitutes “good” enterprise learning, drawing insights from Citi’s Chief Learning Officer and Head of Enterprise Learning & Talent Technology, along with interviews with external experts.

Key implications of our work

The report suggests that L&D is increasingly seen as a strategic investment for companies, crucial for their mission, employee engagement and retention, and societal impact. It is also financially beneficial due to the cost advantages of reskilling/upskilling over firing/hiring. However, challenges exist in practical implementation and employee engagement. The professional learning market, while large, is fragmented, leading to low vendor satisfaction.

The pandemic has accelerated demand for L&D, with most respondents planning to adopt new or replace existing L&D modules. This points to a significant growth outlook for the professional learning/enterprise L&D market, with budgets expected to grow by 18% annually over the next few years. The U.S. and U.K. are predicted to lead this growth at 20%, while China is expected to grow at 14% per year.

Micro/Quantitative: Professional eLearning market to double in four years at current growth rate

The professional eLearning market is poised for substantial growth, driven by the potential for digitalisation and the shift towards lifelong learning. The eLearning segment, including white space opportunities, is valued at $28 billion within the total $360 billion professional learning market. Currently, about a third of eLearning spend is outsourced, amounting to $9 billion. The survey indicates an 18% annual growth in outsourced professional eLearning, projecting a market size of $12.5 billion by 2023.

Micro/Qualitative: The reskilling/upskilling imperative

The ongoing skills gap and employee aspirations for reskilling/upskilling opportunities necessitate lifelong learning for organisations. Employers who fail to provide these opportunities may face financial consequences, including difficulty attracting and retaining talent, higher recruitment costs, and increased employee churn. For employees, the evolving work landscape demands continuous learning, with a range of options now available to cater to varying learning intensities and time commitments.

Macro/Quantitative: More upskilling/reskilling apt to reduce staff turnover and drive growth/productivity

Increased adoption of enterprise L&D programmes, particularly for upskilling/reskilling, can reduce staff turnover, leading to direct cost savings and improved productivity. The Society for Human Resource Management (SHRM) estimates the cost of a worker leaving to be around a third of their annual earnings. Therefore, investing in L&D can enhance labour market efficiency, positively impacting macroeconomic measures of growth and productivity.

Macro/Qualitative: Greater access to education to drive lower inequality and defang the risk of automation

Greater access to learning through corporate investment in L&D/vocational training can address inequalities, both racial and gender-based, that hinder economic growth. The report highlights the potential of vocational/professional training in mitigating the economic drag caused by existing inequalities and future ones arising from the skills gap. It emphasises the role of technology in broadening access and increasing productivity, particularly for workers in lower-skilled jobs at risk of automation.

What does all of this mean? Looking at implications for private capital

The report identifies a significant opportunity for private capital in the vocational training and adult learning market. This large but fragmented market, worth $360 billion globally, is characterised by diverse content and service offerings. The report highlights specific areas within the professional learning space that offer potential for private investors:

• Content: The report suggests a growing demand for diverse content in the enterprise channel as large corporations seek to expand learning opportunities for their workforce. Inorganic consolidation may occur as interest from private capital increases.
• Technology: The demand for platforms to host, deliver, track, and create learning pathways presents an opportunity for “winner takes all/most” outcomes as businesses scale. The debate between “best of breed” and unified approaches remains key.
• Assessment: The need to identify skill gaps and assess learning outcomes is a growing area of focus. While the market is nascent, integrated approaches may prevail, with content, technology, or human capital management firms bundling assessment services into their offerings.
• Certification: While ownership of certifications may remain fragmented, scale benefits may apply to the certification process, creating a role for private capital.