Edtech firms seek to help employers hold onto talent, even as labor market softens

Given the recent rapid advancement of AI and other digital technologies, employers are increasingly concerned about filling skills gaps within their workforces.

But for employees seeking to upskill, it’s not always obvious where to start. A recent survey of 3,500 employees by consulting firm Gartner found just 46% are satisfied with their career growth. Oftentimes, employers are falling short of meeting employees’ career development needs, the survey found.

Guild, a workforce education platform, is seeking to solve this mismatch with new capabilities that will allow employees to take courses that train them for the most “in-demand roles” at their organizations. It’s one of a handful of companies zeroing in on skills gaps to help employers develop their workforces so they can more easily fill open roles.

Creating a sustainable pipeline. Denver-based Guild, which launched in 2015, works with employers like Target, Chipotle, and Discover to offer education benefits with an eye toward helping “employees achieve their goals and grow within their company.” Employees can pursue degrees and short-form skills programs through Guild’s learning marketplace, as well as receive 1:1 coaching.

When listening to feedback from customers, Guild picked up on an information gap between the roles companies need to fill and the skills employees need to develop for those jobs, said Rohan Chandran, chief product and technology officer. Some 84% of employees enroll in Guild with the ultimate goal of career advancement, and nearly 70% of members need help understanding how their learning choices tie to career advancement.

To address this issue, Guild developed Career Pathways, a new product capability that will connect employees with learning programs that tie directly to in-demand career tracks at their organizations, according to a March 27 press release. Chandran described the new offering as “a natural extension and evolution of what we have fundamentally offered…tying all those dots together in an increasingly more structured way.” Employers can customize details within Career Pathways so they include relevant job titles, education requirements, and internal career resources.

The idea is to create a sustainable career pipeline, rather than just solving for one-off scenarios, Chandran said. “We’re creating…an actionable set of steps for an employee, so they have the structure and the confidence to not just increment their skill, but to know that they’re doing it in a way that will drive their career forward with the employer, because it’s tailored and attached to specific real opportunities that exist,” he explained. He identified frontline workers at large companies as one type of employee who could benefit from this type of offering, as they may “[cycle] in a role or parallel roles for years,” without visibility on career development opportunities.

Zoom out. Guild isn’t the only tech company looking to double down on upskilling and internal mobility.

LinkedIn rolled out new features on March 6 “aimed at helping current employees and talent pros better connect about opportunities within their organization and design upskilling paths for employees to get there,” HR Brew reported. The decision to focus on internal mobility was driven in part by the fact that job expectations are shifting rapidly, “and generative AI is only accelerating this,” Jill Raines, LinkedIn's director of product management and head of LinkedIn Learning, told us.

Coursera, another learning development platform, launched a Generative AI Academy in January to give both employees and executives “the skills needed to thrive in an AI-driven workplace.” Though it’s still early days, CEO Jeff Maggioncalda said on a recent earnings call he eventually wants to be able to point to “these specific job roles with these specific skills taught by these courses and these hands-on labs” as a way of unlocking “business productivity and leverage” for employers.

“Rapid growth” in the edtech sector, and in particular “education-to-employment,” has helped companies in this space “attract a huge influx of capital” in recent years, according to a November 2022 report from consulting firm McKinsey. The firm noted large companies like Amazon, Walmart, and Target made major investments in workforce education and development to help attract and retain talent. Such enterprise investments drove growth for companies like Coursera and Udemy, which have market capitalizations of $2.19 billion and $1.75 billion, respectively, and Guild, which raised $265 million at a $4.4 billion valuation in its 2022 Series F funding round.

Though the power balance in the job market has shifted back toward employers since 2022, when the US saw record-high job vacancies and quits, Guild’s Chandran said such trends are cyclical, and he still sees value for companies that create internal mobility pathways. Doing so, “particularly for these large corporations that have a lot of frontline talent and/or early career talent, to have that talent have a path forward in the organization, versus [being] stagnant, is pretty game-changing,” he said.

Update 3/27/24: A quote in this story has been updated to remove an extraneous phrase.

Correction 3/27/24: An earlier version of this story inaccurately described a customization feature in Career Pathways. Employers can customize details in Career Pathways, not learning programs.