What is driving skillstech growth?
Spotted Zebra explains to L&D website Learning News why skillstech has become a billion dollar market and what businesses need to understand about the skillstech landscape.
Skillstech has rarely been out of the headlines over the past couple of years, living up to the reputation of “one of the hottest markets in HR tech” that was bestowed upon it by Josh Bersin in 2021.
Broadly defined as a set of tools that help HR and L&D leaders to categorise, assess, manage, and improve skills at work, skillstech has become a massive space in a relatively short amount of time.
And with RedThread Research currently valuing the skillstech market at $1.3 billion, with 97% of skillstech vendors reporting revenue rises, it is little surprise that the field continues to gather momentum.
In recent months, software giants such as Workday, Microsoft and SAP have incorporated skillstech into their platforms. Meanwhile, investment has continued to roll in despite the challenging investing landscape, with skills-based WFM platform provider Spotted Zebra recently announcing it had raised £7.7 million in Series A funding.
“There has been a lot of hype around it,” notes Caroline Ford, a Learning Leader and Performance Consultant, and Former Global Head of Skills Management at Novartis Learning Institute. “And it’s certainly getting to the point where you can’t ignore it any more.”
What is driving the growth in skillstech?
“Sceptics of the recent skills hype will say ‘we’ve always been talking about skills!’ and that is true - even before the World Economic Forum warned about skills shortages because of aging populations and increased rates of technological advances, skills has been in important conversations,” acknowledges Betsy Summers, Principal Analyst, Future of Work and Human Capital Management at Forrester.
“But the catalyst for recent interest is the increasing rate of skills shortages and broader talent shortages and the availability of technology that can help manage skills in a way that technology could not before.”
Skills shortages are indeed a growing concern, to the extent that the World Economic Forum has described it as “one of the most important challenges of our time”. The ManPower Group estimates that over three-quarters of organisations around the world are now experiencing difficulty finding the skilled talent they need,
“The skills crisis threatens to have a devastating impact on commercial growth,” warns Nick Shaw, Chief Commercial Officer of Spotted Zebra. “Across G20 countries, failing to close the skills gap could put at risk $11.5 trillion in potential GDP growth according to Accenture.
“And the skills shortage is an existential danger for many organisations - three-quarters of those polled by PwC have said that finding the right skills is a threat to their business.”
But the skills challenges facing businesses aren’t confined to just the scarcity of skills.
As Summers notes: “Beyond the common cry, ‘we can't find people with the skills we need,’ organisations are having trouble even knowing what skills they need, especially with emerging technology or transformation projects.
“They also don't know what types of talent to source with those skills to fill those skill gaps like should we hire this talent or should we upskill people internally or should we rely on on-demand labour like freelancers or contingent gig workers or should we rely on consultancies? These are workforce planning conversations used to happen in a corner of HR or in the business functions themselves, that now need to come together.”
Fortunately, skillstech has emerged and evolved in recent years to the point where there are now solutions available to support HR and L&D leaders with their skills struggles.
Read the rest of this article at Learning News.