Why the L&D market is facing growing pains

While employers are placing an increasing focus on learning and development tech to help their employees develop their careers, they’re doing so in a crowded market with tighter budgets, said Dani Johnson, co-founder and principal analyst for RedThread Research

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“Organizations working on skills are not quite there yet,” said Johnson in her 2022 HR Technology Conference mega session, “Learning Tech Market: Get Ready for Disruption.” 

“Skills analysis can help you understand what skills are needed for a particular role, and this helps move workers inside an organization,” she added about the growing importance of skills in today’s hiring climate.



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Skills technology accomplishes four things, according to Johnson: First, this technology collects and records valuable information on employee skills. It also helps HR leaders to organize skills data, and it can generate information about skills in the greater labor market. Finally, skills solutions aim to make it easier to use data for employee analytics projects. 

These benefits are among the reasons the skills technology market is so in demand. In particular, Johnson said, coaching technology is “hot”—and it’s not just for supervisors and senior leaders. Also, the idea that coaching is solely accomplished one-on-one is starting to show its age; coaches and mentors are meeting in small groups these days. 

Organizations are doing more with less on the L&D initiatives thanks to inflation concerns. Although there is still $675 million being invested in the learning tech space, smaller and newer employers are seeing some budget cuts for learning and upskilling in anticipation of possible layoffs. Also, these issues raise the specter of consolidation in a crowded field, she said. This is leading to complicated discussions among HR leaders and learning solution providers. 



“It’s also creating unsettled feelings among clients buying these tools,” said Johnson.

Despite these challenges, HR and employers remain committed to L&D for retaining employees and developing their talent, with a particular shift from skills tracking to efforts like skills academies to teach employees specific skills. “Since the pandemic,” she said, “the skills conversation has blown up.”

Phil Albinus
Phil Albinus is HR Tech Editor for HRE. He has been covering personal and business technology for 25 years and has served as editor and executive editor for a number of financial services, trading technology and employee benefits titles. He is a graduate of SUNY New Paltz and lives in the Hudson Valley with his audiologist wife and three adult children. He can be reached at palbinus@lrp.com and on social media below.

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