The Business of Learning: What Does the Future Hold?
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Who's in the Market for Learning: Individuals or Organizations?

As part of the ongoing conversation on the future business models for learning with Tony Karrer, I mentioned in both my blog post and in a comment on Tony's blog that I think we're going to see a move away from companies and organizations to individuals as the consumers of learning products and services. Tony followed up by asking if I had anything to back up my thinking. Good question, so here's my train of thought.

Everyone agrees that work today is more complex, more knowledge-based and rapidly changing. There are a lot of arguments about how we're going to develop our workforce, but no one is arguing that there's a need for LESS learning. Everyone agrees that learning must be constant in order to keep up with the pace of change. So the demand for learning is there. The question becomes, where's the market?

For the past 50 years or so, we saw companies taking responsibility for employee learning. This made sense when you had people working for you for an extended period of time, wanted to develop them along a career path and saw them as integral cogs in your company's operation. As a result of company's taking responsibility for learning, they were the primary market for learning products and services and the learning industry (at least in terms of corporate education and training) has been totally geared toward that market.They PAID for learning, so they were the target market.

But these conditions no longer exist in most industries. Turnover (both voluntary and involuntary) is a way of life. The median job tenure according to the Bureau of Labor Statistics is 4.9 years, but this is skewed by the tenure of older workers (9.9 years). Workers between 25 and 34 had only 2.7 years on the job. It's also skewed by the differences between public and private sector workers--in the public sector median tenure is 7.2 years (9.9 years for federal employees), while in the private sector it's 3.6 years. If the research I mentioned in my previous post is true--that employers only begin investing in training for employees after 3 years on the job--that's a lot of people missing out on employer-provided training.

Another trend I see going on is the rise of contract/freelance workers. As I mentioned in my previous post, there's been a surge in companies looking to hire contract workers, either directly or through placement agencies. Careerbuilder reports that 28% of employers are indicating they will increase the number of contract and temporary workers they hire in 2009. And this PBS report indicates that contract worker make up 30% of the workforce. This doesn't include the numbers of people who are probably working as freelancers, but are misclassified as employees.  That's a significant number of people who need to continue to upgrade their skills and who probably won't be getting professional development from their companies.

To these two trends let's add the fact that while companies SAY they need ongoing training, many of them jettison learning at the first sign of hard times (look at Tony's post for some stats on that). Learning is seen as a "cost," of doing business, not an investment in infrastructure and as a cost, in hard times it will be cut.

I also think there's a general reluctance to train staff because knowledge and skills are portable and with people having the flexibility to move to other jobs, companies are understandably reluctant to train their future competitors.

Finally, let us not forget the high percentage of small businesses that are out there--I've seen estimates as high as 90%, many of which employ under 20 people. These are not companies that are typically in the business of training their employees because of time and money constraints. At best they may send one or two people to an outside course. They still need skilled workers, but these workers need to get their skills elsewhere because these companies simply aren't in a position to provide the services.

I suspect that we may be at a place with employee training that is similar to where we are at on things like employer-provided healthcare and pensions. In larger companies and organizations that could afford these benefits, the trend has been to put more and more of the "costs" onto workers and for companies to get out of things that aren't their "core" business. Small companies couldn't even afford to play.  I'm not sure that employers see employee training and development as a central concern (although they pay it lip service), so I'd see T&D as a primary candidate for putting back on workers, especially if they can invest in performance support systems to cover what they need for business processes. 

So how to improve worker skills if it isn't going to happen through employers? At best, I think we'll be seeing employers using things like tuition reimbursement, which puts both the buying and the onus for learning on the individual.Yes, companies may have some guidelines on the courses that could be taken, but beyond that, they will have little input into the buying decision.

We may also see government stepping up to the plate. I do a lot of work with "second chance" workforce programs that are funded through the US Department of Labor. Here, laid off workers can qualify for "individual training accounts" that they can use to upgrade skills in order to find new employment. The Recovery Act infused a ton of funding into that system, so it may be another avenue for funding learning, although, again, it puts decisions in the hands of individual consumers. And as a government program, there are lots of caveats on how the money can be used. 

So to summarize--I see several different trends intersecting here that, to my mind, are going to reduce the amount of employer-provided/funded training and education that will occur. There's still a NEED for ongoing learning, but I think the market for this is going to shift to individuals rather than being delivered through employers. I also think that we've had an untapped market sitting there for awhile that we haven't figured out how to access yet (I'm thinking of freelance workers, for example).

What I'm really trying to say here is that whoever pays for the product or service is the target market. In the past, we've relied on companies to pay for ongoing worker training, just as we've relied on them to provide healthcare benefits. What I think we're seeing, though, is a move away from employers paying for ongoing learning, which means either people stop learning or someone else has to pay for it. I think it will be individuals, either out of their own pockets and/or with assistance from government (if government can get its act together on financial aid and supporting lifelong learning).

Frankly, figuring out who is going to pay for lifelong learning is a key policy decision we need to face as a country if we're going to survive in the long-term.We also need to figure out how to re-educate that large class of workers used to relying on their companies to tell them what training and skills they need to develop and then paying for it. These people need to fundamentally change their view of how we do professional development in this country.

If what I'm thinking is where we're headed, I do think this changes the conversation we're having about the business models to employ. Individuals are going to be thinking very differently about what they want to access and how than are employers. ROI will be calculated in a different way too. This isn't to say that companies will no longer be purchasing learning. I just think that as providers and business people, there are some markets here that are changing and need to be further explored.

So what do you think? Am I making sense here? What am I missing?


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You write: "I also think there's a general reluctance to train staff because knowledge and skills are portable and with people having the flexibility to move to other jobs, companies are understandably reluctant to train their future competitors."

Perhaps we are approaching a point in time where companies need to accept that this is going to happen and stop trying to avoid it. Using the music industry example, it's like the record companies trying to ignore the impact of digital technologies and the network. Those who understood the disruption to come, and made the leap, had a head start on the rest - most of whom are still trying to catch up.

Back to a sports analogy: most pro teams know that their star players, maybe all of their players, will eventually move on to other teams, either as a free agent or as a trade. This doesn't stop them from trying to make sure these athletes are the best trained and prepared athletes on the field.

Not sure how exactly these examples can be leveraged to answer the question at hand, I just thought they might help shed a different perspective on the challenges ahead.

This is a very interesting concept, and one that certainly fits with the 'everyone is a free agent' mentality. I have often bristled at organizations that like to state 'employees are responsible for their own development and career planning', but then offer pre-selected training opportunities that may or may not align with the individual's goals at all. Great post, and this is certainly a trend to watch for in the future.

I think this trend has started. For example the whole idea of the "unconference" is participants setting the agenda and doing the presentations. No formal preset agenda. The expertise in the room talks. Meetups are potentially another example of this in the face-to-face environment. People taking responsibility for their own learning at low cost.

In formal training, I always found it interesting that the most energy in the room was on coffee breaks -- that's where participants are engaged.

Different industries and regions may vary in how much formal instruction they require. People also vary in their capability for self-directed learning.

Your analogy to health care is very relevant -- though I wish it wasn't so.

A thought on Brett's analogy to teams and star players -- this would require businesses to have coaches on their teams that were responsible for the performance of their team. I think this is a great model -- but requires a rethinking of the business organization. Regardless, the role of the training organization shifts and becomes more aligned with the business needs.

Love the post.


The idea of coaches is something I've explored on my blog, both for individuals and teams, and was the basis for my comments here. There is no doubt that this would require a rethinking of organizations, and it probably wouldn't work for some (many? most?).

In this concept I see the role of the training organization shifting from a combination of identifying training requirements and executing those requirements to one of simply identifying the requirements, with the execution left to the line organization and their "coach".

Thanks for your post Michele
Three 1st impression ideas (which seemed to be centered on organizational learning):
1. Strategy must play a stronger role where learning is part of the organizational narrative not just an afterthought or add-on.
2. Focus learning activities on building organizational intelligence with individual learning. Individual learning becomes organizational intelligence when it changes processes, shared understandings or artifacts (like the organizational narrative).
3. Organizations need a learning infrastructure. Six Sigma is one example, except that it could be more broadly focused beyond quality.

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