Why Digital Reskilling Will Power The Post-COVID Workforce

Covid-19 has unleashed immense disruption. Alongside the tragic count of cases and deaths, the economic damage has been huge. It's likely to be long-lasting too.

With 33.3m new jobless claims in the US since mid-March, compared to 695k at the height of the financial crisis in March 2009, Covid-19 has been incredibly disruptive on businesses and workers.

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The impact of lockdowns

The lockdowns required to curb Covid-19 have meant that whole swathes of the economy can’t function. While VCs and software developers find working from home unproductive and stressful, working from home isn’t an option in food service, manufacturing or retail. The lockdown has already led to significant job losses.

The lockdowns will eventually end with the roll-out of the vaccine, but it’s far from clear that all of the jobs lost will come back. Retailers have been struggling for years and the behavioural shifts from a period of enforced lockdown could last - not to mention the risk of falling consumer spend in a Covid-19 recession.

The sad truth is that for many people who lose their jobs due to Covid-19, there is a real risk that there won’t be a job to go back to afterwards.

The Opportunity

I expect lots of workers will need to reskill to switch to new jobs in the industries that have benefited from these behavioural shifts. Sectors such as logistics, e-commerce and potentially healthcare are likely to need to expand their workforces to take advantage of increased demand.

One area I’ll be watching with interest is the emergence of platforms that can re-skill and onboard new workers who have been impacted by Covid-19. While they’ll deliver a social good, they will also help teams and employers, so they should represent valuable businesses.

E-learning

Online education has seen massive growth over the past decade, with the emergence of massive online-only courses (MOOCs) from the likes of Coursera or EdX as well as digital language learning solutions such as Duolingo or Babbel.

However, there is a gap for practical, skills-based vocational training. Companies such as Lambda Academy or Forward Partners portfolio company Makers probably come closest. But they're typically focused on white-collar software developer roles, rather than the often partially manual roles in logistics, e-commerce and healthcare.

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I also expect digital training solutions to see a boost in uptake as face-to-face training becomes impractical and workers get used to virtual interactions in other areas of their working lives.

Companies tackling this space will have to think creatively about how they can work with users who aren’t in employment and cost-conscious. They might monetise through recruitment, matching trained workers with open roles (like Makers) or through income-share agreements (like Lambda School). Workers may also move between jobs more frequently, so an ‘employee passport’ which details skills and experience across employers could have value.

Skills-focused training

Content for these solutions is likely to be very different from that available on MOOCs, with a focus on bitesize training for specific skills. A key competence will be to identify the skill needs shared across jobs to maximise overlap and minimise the content created for each role.

There's also scope to work directly with employers to tailor content to their own needs — increasing the pool of suitable labour to make hiring easier.

In logistics, for example, the post-COVID expansion of e-commerce is likely to exacerbate an already difficult situation. A 2019 report found that 54% of logistics companies are expecting the skills shortage to increase over the next five years. 42% of firms cite job-specific skills as the main barrier to successful recruitment. Providing access to these job-specific skills will help logistics firms expand, while also helping people from declining industries get back into work.

The Covid-19 lockdowns will end. People will be able to go back to work. However, the jobs available could be very different. Workers need businesses to help them shift to the next wave of jobs.

If you're setting up a business in online education, I’d love to hear from you.

Luke joined Forward Partners from REV Venture Partners, a corporate VC, where he was responsible for deal origination, investment due diligence and portfolio reporting. He was previously a consultant with the strategy consultancy Oliver Wyman, where he worked across the retail, aviation, healthcare and FMCG sectors.

Luke originally planned a career in science and he holds a PhD in biochemistry. His focus at Forward Partners is on sourcing and executing new investments.

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