Why Companies Are Taking It Upon Themselves to Help Workers Learn New Skills Employers are finding ways to get people ahead of the curve on blockchain engineering, digital marketing and more.
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In this series, The Way We Work, Entrepreneur Associate Editor Lydia Belanger examines how people foster productivity, focus, collaboration, creativity and culture in the workplace.
When Codecademy co-founder and CEO Zach Sims was gearing up to launch his online coding class platform back in 2011, he kept hearing reports of how the workforce was not equipped with high-demand technical skills. The majority of companies, he recalls learning from one study, wished their employees had more skills training before they started on the job. He set out to build a tool that would help close the gap.
Back then, in the aftermath of the Great Recession, the unemployment rate hovered around 9 percent. Today, it's a mere 3.8 percent, according to the U.S. Bureau of Labor Statistics. Companies are competing for talent highly skilled talent, but internal training programs are still few and far between.
"Companies are having trouble keeping up," says Jeff Maggioncalda, CEO of online learning platform Coursera, of the rapid rate of technological acceleration worldwide today. "Even large companies that have a dedicated learning and development function don't have the resources and expertise to teach all of those new skills to people spread around the world." For small companies, such resources are obviously even more limited.
According to a Bank of America report, small-business owners listed training and developing existing staff as the number-one priority for using loan capital in 2015. But as Deloitte found in a 2017 survey, more than half of companies do not have learning programs focused on building skills for the future. But the tide could be changing.
In May, Walmart announced that it would begin offering to cover U.S. workers' college expenses -- tuition, fees and books -- leaving the recipient of the program responsible for only $1 per day toward an associate's or bachelor's degree in business or supply chain management from one of three universities.
"Walmart is just the beginning of the education and upscaling that's going to be happening in the workplace, sponsored by employers who are realizing they're not going to be able to hire and fire their way out of this problem," Maggioncalda says. "It has now become mission-critical, existential."
Discrepancies between worker qualifications and company needs persist, despite the emergence of programs like these. Online learning platforms are increasingly vying to be part of the solution -- not only to help bolster the talent supply, but also to build brand awareness.
Take a class for work
"What we found early on was that the people using the product weren't just individual students, but they were also employees at companies," Sims says of Codeademy's user base. Workers were presenting completion certificates to their employers to verify that they'd learned new skills, or getting reimbursed by their companies for their enrollment fees.
Today, Sims says that Codecademy's target market is still individual consumers who want to learn to code, but that the appetite from the enterprise side has resulted in Codecademy creating some customized materials for companies. It does this by stringing together existing Codecademy courses into a curriculum or, for instance, by inputting a company's data into courses so that learners can recognize how to apply their new skills.
Coursera, on the other hand, launched in 2012 and initially focused on partnering with universities to offer their courses online. But like Codecademy, Coursera noticed enterprise adoption. Users were registering for accounts on Coursera with their work email addresses. Before long, companies approached Coursera with interest in offering its catalog to their employees.
In 2016, Coursera launched Coursera for Business, and over the past year, this arm of the online learning company has grown twentyfold. It counts about 1,000 companies as customers, most of which are have less than 1,000 employees, but 30 of which are among the Fortune 500, a Coursera spokesperson tells Entrepreneur.
The most popular courses among these customers are deep learning, machine learning, data science and digital marketing. Many programs are available piecemeal, as "modules" of a larger degree offered from Coursera's university partners -- a faster and more flexible option than going back to school, which will be increasingly crucial as technology accelerates and workers require retraining throughout their 40-year (or longer) careers.
Since Coursera for Business launched, Maggioncalda has made a couple of conclusions about how companies can most effectively harness digital learning tools to train their workers.
What's in it for me?
"The ones who seem to do the best are the ones who know, "What types of competencies do I need to teach certain functions in my company?'" Maggioncalda says. Rather than just trying to foster a culture of learning by making online courses available "cafeteria style" as a company perk, he says, businesses that target specific skills for specific employees have the most to gain. "People are pretty busy, and they don't necessarily have time or want to learn general things," he notes.
When employers point employees toward specific courses, it motivates those who might not know where to start, Maggioncalda says, or who want to develop skills with their long-term careers in mind, beyond their current company. Employees have to recognize what's in it for them and have a reward-based incentive -- not a negative incentive, i.e. either take the course or lose your job. Companies also have to make sure employees have sufficient time set aside to complete the learning program, he adds.
But why would a company invest in helping a worker learn a skill, given the risk that they could leave and take it to a competitor?
"You have to think about the alternative," Maggioncalda says. "So, I'm going to keep my people really uninformed and laggards, so that they don't go to work for somebody else, but guess what? Now you have a not very qualified employee base."
If you need it, help build it.
Coursera and Codecademy both also partner with companies to offer skills that those partners see lacking in the marketplace. Earlier this year, Google and Coursera partnered on a professional IT certificate, available to anyone regardless of whether they have a college background, which teaches basic information technology skills students can apply at any company -- not just Google.
Then, there are what are called content partnerships on online course platforms. To cite another Google example, Coursera hosts Google Cloud developer training materials. Employees at any company that uses Google Cloud infrastructure need Google Cloud developer skills. If Google doesn't facilitate training for these workers, who will?
This trend extends beyond online course platforms, of course. Even cryptocurrencies are getting in on the action. Dash, the Scottsdale, Ariz.-based company behind the digital currency of the same name, recently partnered with Arizona State University to offer a graduate course (starting in the fall), as well as research fellowships. Both are focused on blockchain development, the technology that underlies cryptocurrencies. Hundreds of prospective students applied for scholarships to the new program, and Dash awarded 20 for this first year.
"We spend, on average, six months onboarding new employees to understand blockchain," says Dash CEO Ryan Taylor. "Having even a cursory understanding of it will allow to get new hires up to speed more quickly." But he notes that other companies moving into the blockchain space will benefit from this talent pipeline, echoing Maggioncalda's argument that the rising tide lifts all boats, and explaining that the partnership puts Dash top of mind with students who would otherwise gravitate toward household names.
"I think of it as a mindshare play," Taylor says of the partnership's role in recruitment. He explains that talent acquisition is just one component of whether his company will succeed or fail, especially because Dash doesn't have a lot of direct competitors. Even if it did, companies collaborating to create shared talent pools isn't a novel concept, he points out.
The course will provide a background in the legal ramifications and regulatory limitations for blockchain, business models for funding blockchain projects and more, Taylor says. Anyone working on implementing the technology will need that foundation in addition to grasping the basics of the technology itself.
"The world's changing so fast, mostly from globalization and technology," Maggioncalda says. "The ways that businesses work, the types of jobs that are out there and the types of skills needed for those jobs is accelerating at an increased rate."