Look Beyond Legacy Education To Avoid Falling Foul of Major Talent Shortages

Technology is evolving at a pace that only the most successful enterprises can keep up with (see Exhibits 1 and 2). Enterprises that hope to succeed in the hyperconnected economy cannot wait for traditional education to catch up—they must embrace new talent pools and revitalize their own by reskilling staff via rapid and cost-effective online platforms. These “unconventional qualifications” are becoming increasingly respected and enterprises are tailoring them to their needs—GE and AT&T being two heavyweight examples, in partnership with Udacity, a leading provider.

Exhibit 1: The pace of change is phenomenal, and it is only going to increase

How much has your operations and operating model changed to reflect the increasingly digital world? And how much do you think it will change in the next 2 years?

^{Source: HFS Research, 2018}

Exhibit 2: Digital disruption is rampant: 29% have already seen their top two competitors change in only three years

^{Source: HFS Research, “Journey to the Digital OneOffice 2018”}

^{Sample: n=395 Enterprise Digital Leaders}

Traditional academia is becoming increasingly irrelevant to today’s vocations. Graduates struggle to find employment where the fundamentals of their qualification are relevant, while enterprises desperately try to cross the skills-bridge between them and success in the hyperconnected economy. At least 10,000 AI-related positions are open in the US alone, but worldwide, fewer than 10,000 people have the skills—add in blockchain, cloud, cybersecurity, and the like, and the gap grows even wider.

Enterprises need skills now, not in the three or four years a conventional degree might consume:

• They must expand the talent pools that they recruit from through “unconventional degrees,” which can be shorter, more flexible, and less expensive;
• They must help refine these qualifications in partnership with providers to best suit their business needs;
• Enterprises must take advantage of the rapid and scalable training provided by these “unconventional” educators to reskill and continuously develop their workforces;
• Enterprises should offer learning opportunities outside of their core needs to attract and retain staff, promoting personal development and lifelong learning.

Overcoming talent shortages will mean make-or-break as technology, customers, and the competition continue to press the accelerator

Tech-talent shortage really isn’t new—in 2012, Harvard Business Review proclaimed a war for people to fill the “sexiest job” of the 21^st century: data scientists. Schools and universities may take over a decade for the required skills to become part of their curriculums; in the meantime, IT executives are getting worried (see Exhibit 3).

Exhibit 3: Rapidly changing technology, customers, and competition mean that the IT C-Suite is sweating over the talent shortage

What are your greatest challenges holding back your journey to achieve the Digital OneOffice Framework?

^{Source: HFS Research 2018}

^{Sample: C-Level Enterprise Executives = 100}

Despite acknowledging the challenge, few enterprises are really pushing strategies that address this issue (see Exhibit 4).

Exhibit 4: Only 14% are seriously considering staffing and skills needs

Which of the following actions are you making to ensure your operations align more with the increasingly digital world?

^{Source: HFS Research in Conjunction with KPMG, “State of Operations and Outsourcing 2018, May 2018}

^{Sample: Global 2000 Enterprise Buyers = 381}

Non-traditional education is trying to disrupt institutions that have stood for centuries

With an increasing number of graduates doing nothing with their degrees (58.8% of graduates in the UK don’t go into graduate-level jobs), institutions like the Open University (OU) are capturing a market segment who don’t want to be repaying student loans for the rest of their lives or want to hold down a real job while they study. The OU is one of the largest universities in Europe with 174,898 students; for scale, Harvard has approximately 36,000, and Cambridge University has 21,700.

However, graduating from the OU is still a relatively lengthy process, and it’s not exactly cheap. Degrees can take between three and six years, setting you back over £18,000 ($23,500) on average.

The US market is dominated by established schools’ online offerings; almost 30,000 online degrees are accredited, but tuition costs $24,616 on average per year.

New forms of online education, such as Udacity’s Nanodegrees in emerging areas such as AI, data science, or VR, will entice many. For example, a Nanodegree in AI requires 12 to 15 hours per week, for three months, and costs around £800 ($1,000). Udacity collaborates with Facebook, Google, IBM, Mercedes-Benz, Amazon, Bosch, SAP, and over 100 global companies that understand the required skills and skill-gaps of the job market; classroom mentorship, moderated forums, and project reviews “ensure a personalized experience.”

Many firms play in the market. Udemy competes with Udacity, while edX offers online degrees from some of the world’s leading universities such as Harvard, MIT, and UC Berkeley. ODEM (on-demand education marketplace) offers blockchain-based academic credentials and connects prospective students with educators.

The market for nonconventional higher education is only growing, and students and companies don’t have to look far for the opportunities to extend their talent pools.

Enterprises are already revolutionizing their reskilling and continuous learning processes

Despite the number of offerings, recruitment still has a long way to go toward recognizing the potential of nonconventional education such as Nanodegrees. But in the meantime, some of the world’s leading companies have used these means to reskill their workforces—at both pace and scale.

Udacity for Enterprise helps businesses transform their workforce to “enable innovation.” Heavyweight companies are already well-involved: GE is taking advantage of the scalability of Udacity’s courses, while AT&T is driving continuous learning. IBM has also picked up on this trend, and it won’t be long before everyone is proclaiming that it’s their workforce that pioneers continuous learning.

The Bottom Line: Leading enterprises are already galloping into the sunset on the back of alternative education and re-skilling. Don’t be left behind with a team of one-trick ponies.

Some of the world’s biggest enterprises are already driving continuous learning through nontraditional education; they’re becoming more resilient to the hyperconnected economy, which develops at a pace that few can keep up with. They’re realizing benefits beyond reskilling to personal development and staff retention. Starbucks just announced that it will extend its offering of part-time, fully-funded online degrees through Arizona State University to UK employees; 18,000 US employees have already enrolled.

Reskilling a workforce at scale will allow enterprises to drive innovation in technology’s ever-changing landscape. Enterprises are facing major disruption as technology changes or eliminates jobs. They must find ways to reskill at pace and scale while simultaneously expanding their recruitment talent pools; traditional means of tackling these challenges have failed, and those who fail to embrace nontraditional education risk becoming the Blockbusters of the talent shortage era.