Sarah Danzl, Head of Global Communications at Degreed, discusses the growth of HRtech in 2020 and lessons learned for HR leaders.
In what has undoubtedly been a challenging year, learning and HRtech came to the fore as a way to keep our training and learning going. Academic institutions and businesses alike needed to keep building their people’s skills, especially as entire industries were disrupted, new roles were created, and digital transformation accelerated.
What’s driving growth
Indeed, some estimates place the advancement of digital transformation due to the pandemic at over five years. 80% of employee interactions were digitised during the global lockdown, along with 60% of customer channels. Therefore, continued investment in digital upskilling was critical, as well as helping people get used to virtual work and education set-ups. 73% of workers improved their digital skills as a result of working and socialising remotely.
Furthermore, widespread job insecurity, furlough, and lay-offs meant more people were open to upskilling and reskilling for new roles. 59% of UK workers are willing to upskill and reskill in a new line of work due to the pandemic – and this number soars in the most affected sectors. 92.9% of charity workers, 80.6% of customer service reps, and 75% of leisure and tourism workers are willing to upskill to remain employable.
Therefore, it’s little surprise that the learning and HRtech market experienced significant growth in 2020. Major changes in education at every level have placed HRtech companies in a unique position to help. The adoption of learning technology was greatly accelerated, with investment in the market estimated to hit £5.8 billion by the end of 2020.
Funding rounds have been announced across the world, from early-stage start-ups like Learn In, to fast-growing companies like Degreed, and unicorns like Yuanfudao and Udemy. Even venture capital funds are growing, with Owl Ventures, the largest VC in HRtech, closing $585 million (£437.8 million) across two new funds.
As Ian Chiu, Managing Director at Owl Ventures explains about the HRtech boom, “We are finding that our portfolio companies based in the U.S, China, Europe and India are mission-critical elements to continued learning. Inbound inquiries, user growth/engagement, and customer pipelines have dramatically spiked across our portfolio with our platforms being leveraged globally.”
Lessons for HR leaders
But what does this growth mean for the future, and what lessons can HR leaders take from it?
Firstly, when the crisis hit, it was digital tools that helped organisations respond quickly and with agility. COVID-19 won’t be the only unforeseen event that business leaders will have to contend with in the future. Pretty soon they’ll have to deal with the threat of global recession, increased opportunities through the Fourth Industrial Revolution, and numerous other political, economic, and social changes. By investing in technology that offers a new way of doing things, leaders can innovate today and build greater resilience for tomorrow.
Secondly, the growth of the HRtech sector will not slow in 2021. We’re heading into an era of significant change and the half-life of skills is ever-decreasing. Therefore, the value of continuous learning will grow exponentially and the prospects of the HRtech sector along with it.
You just have to look at the investments going into the sector to understand that this is where the winds are blowing and investor confidence is high.
Consolidating technology and data
Finally, as we move forward, the emphasis for business and HR leaders must not be on tracking all forms of learning (formal and informal, online, on-the-job and so on). Many learning and HRtech investments will have been made in a short period of time as a reaction to the lockdown and each solution (and its data) needs to be consolidated to give a complete picture of a learner’s progress and career growth.
Likewise, the technology that’s intuitive and adds tangible value to the bottom-line will stick in the long-term. It’s worth assessing your HRtech stack now, to understand where it fits in your mid and long-term upskilling and workforce strategies.
As Socrates once said, “The secret of change is to focus all of your energy, not on fighting the old, but on building the new.”
2020 brought many changes, and our focus over the next year needs to be on building anew. The world as we knew it is gone. People need new skills to survive and thrive in this new world – and HRtech is well placed to assist. For HR leaders, now is the time to look at the technology that’s come into its own this year, to understand how it aligns with your goals, and support your people.