Degreed Enters The Talent Marketplace War
One of the more disruptive HR Tech vendors is Degreed. I met with the founders early on (David Blake and later Chris McCarthy) and they had a vision: reinvent the way people develop their careers (not exactly a new idea). Initially the company intended to build a B2C network of professionals learning from each other, creating online credentials, and using AI to identify new careers. The LinkedIn of professional development, in a sense.
Well as they got the company going, they realized there was no revenue in that model, so the company became an LXP (Learning Experience Platform) provider. And they did this pretty well. Degreed helped develop this market, acquired Pathgather (one of the pioneers), and spent a lot money educating L&D departments that “learning experience” was more important than “learning management.” And they were right.
As Degreed helped establish the LXP as a category, they disrupted the LMS marketplace, forcing vendors like Cornerstone and Saba (now merged), Skillsoft, LinkedIn, and Microsoft to realize that a “Learning Experience Platform” could revolutionize corporate learning. Their scrappiest competitor, EdCast, is now growing at light speed and all the learning vendors are chasing this market in some way.
They didn’t do this on the cheap. Degreed raised more than $180 Million (the most ever raised for a learning tech company, and apparently there is also debt), they now have more than 520 employees, and the platform has more than 6 million users. This doesn’t make them as big as Cornerstone (who has 75 million users) but they’re approaching the reach of LinkedIn Learning (who has about 14 million users) in less than ten years.
Despite a marketing message that sometimes pushes the envelope, the company has done a good job of understanding the needs of its customers. Degreed now offers the LearnUpon LMS (EdCast acquired Leapest to develop its LMS), and last year, after shopping around for a while, decided to buy Adepto, enabling the company to build a Talent Marketplace. And while their entry is new and evolving, it has the potential to help Degreed significantly expand its footprint.
The Market for Skills Enablement Systems
Right now the market for corporate skills tools and platforms is explosive. There are vendors who assess skills, build skills, infer skills, and try to predict skills. It’s a big and complex space and includes platform companies (Workday, SAP, Oracle, Microsoft, LinkedIn), data companies (Emsi, BurningGlass), assessment companies (Pymetrics, KornFerry, DDI), content companies (hundreds), and of course learning platforms. Every learning platform vendor has the word “skills” on their website somewhere, because they all want to help companies and individuals grow.
Degreed, which has been throwing this word around for a while, repositioned itself as “the upskilling platform,” reinforcing the point that developing skills is its real mission. So getting back to its roots, Degreed is becoming more than an LXP company, and the vision is starting to play out.
While the vision is compelling, I want to warn you that this is a very complex issue, and not one that is solved with vendor solutions alone. As I’ve learned over the years (and we are doing this in the Josh Bersin Academy), developing career-oriented skills takes job experience, mentorship, training, coaching, feedback, and many types of support. Taking a training class and getting a certificate is not the whole solution. On the other hand, making it easy to identify the skills you need, find the right content, and credentialize your learning is still a huge value-add.
The skirmish for “skills platforms” is messy, with vendors like Workday, Gloat, Fuel50, Eightfold, TalentGuard, 365Talents, IBM, Pymetrics, Avature, Cornerstone, and many others involved. So while you may like Degreed’s sales pitch, you’ll need many pieces to make this work. Nevertheless, Degreed customers love the fact that the system is easy to use, so people roll it out and many want it to become their “systems of record” for skills. EdCast’s customers also do the same, by the way, so this is still quite a horse race.
The Role of Work Experience in Learning
As I’ve learned over the years (as an analyst and as a professional), the most important learning always happens on the job. You can’t learn how to sell, design, market, or engineer anything until you try it. And then you realize what you don’t know, get some help, make some mistakes, and go up the “learning curve.” Training is an important part, but you don’t really “learn” until you apply the skills at work.
In our JBA Capability Model, which we are piloting now (it’s the first Global Capability Assessment for HR), we identified more than 70 “capabilities” we assess – and the assessment is based on experience, not just skills. And we know this is what people care about.
Hiring managers look for experience (yes it’s nice you have that credential or badge, but I want to know if you have done this before), and most studies show it’s the most reliable way to predict success. There are all sorts of soft-skills needed in every role too, so no matter how many “skills” you have, it’s how you use them that counts.
How do you find the experience you need to move up in your career? Most of us periodically change jobs, we ask for developmental assignments, and we try stuff on our own. I’ve spent a lot of my free time futzing with my website and I’ve learned a lot. I never took a course in HTML or any other programming tool, but I’ve learned how it all works by doing it. This is how the world works.
And this is why building a “Talent Marketplace” is such an explosive market. It’s really the future of how organizations work.
Think about how a dynamic company operates. When a hiring manager wants to staff a role, they look for an internal candidate to help. When an individual wants to learn something new, they look for an opportunity inside the company. When the CEO needs to reorganize or transform, he or she wants people to find new roles. It’s all a problem of matching demand with supply, something a marketplace does very well.
As I’ve written about extensively, it’s a bit more complicated than it looks. Not only do you have to recommend positions to people in an intelligent way, you need to create a culture of mobility (managers letting people move, managers hiring internal candidates with lesser experience, paying people despite their learning curve, and more). You also have to create a culture of learning, one which encourages people to stretch themselves without penalty. And now, as the Pandemic has changed almost every job, this topic is more urgent than ever.
Suppose you sent all your sales and service people home and now you need them to reorganize into market units in your new “virtual company.” Every organization from Verizon to United Health Care has just done this. Well, these are often new jobs, new roles, new responsibilities, and often you have a new manager. Sabre told us that 60% of their company changed jobs and managers during the last four months. A Talent Marketplace can make this much easier.
Degreed Launches Career Mobility Solution
Well, Degreed saw this coming. I talked with Chris McCarthy about this several years ago, and he knew that they needed this type of solution. So after shopping around they went out and acquired Adepto and have started to integrate it into Degreed. The new version of Degreed, coming out this Fall, will show “recommended learning,” as well as “recommended assignments” and “recommended projects” for every employee. It’s a perfect add-on to Degreed’s LXP.
Will it all work well? We don’t know that quite yet, but my guess is that it will – and this puts Degreed squarely into the Talent Marketplace category.
It’s a crowded space with lots of opportunity. Vendors like Gloat, Eightfold, Avature, and Pymetrics come from recruiting – so their technology focuses on matching, job assignment, interviewing, and onboarding. Vendors like Fuel50, TalentGuard, and 365Talents come from a learning background, so their technology is suited for career development and more traditional talent mobility strategies. And vendors like Hitch and 365Talents started with a focus on gig work, so they’re optimized for gig projects, team enablement, and daily work management.
The implementation of talent mobility follows the three models above. While companies would like to become “agile” at some point, not all organizations are ready for “gig work” across the organization. Cisco certainly is (they are one of Degreed’s pilots) because they’ve run that way for decades. But manufacturers, pharma companies, banks, and retailers have more traditional roles, so they start with “talent marketplaces” in functional areas (IT and HR) and then use “facilitated or career mobility” with gated movement in traditional functions. So one vendor may not be perfect for everyone.
And the process of “taking a new assignment,” onboarding for the assignment, and then tracking your progress is part of this solution as well. So while Degreed may “expose” an opportunity for a new assignment, there are a lot of other business processes to consider.
Finally, let me add that the “skills-matching” and “skills-cloud” technology is maturing at different rates from different vendors.
Some vendors see a skills-cloud as a “word-matching” tool that finds words on job descriptions and matches them to your resume or background. More sophisticated systems look at your learning experience, job history, credentials, and hundreds of other things to “infer” what you may know. One vendor is so intelligent their system knows that “if you worked for Google in AI during a certain period of time you probably know a certain set of algorithms used in Google at that time.” This particular vendor is ahead of the curve in the matching algorithms, so as you look at these systems you’ll find lots of variations.
I don’t think the market is mature enough to tell you which vendors’ matching algorithms work the best yet – but let’s just say this is a moving target, so whatever vendor you select they will be evolving their system in time.
I’ll be spending more time with Degreed in the coming months, and will certainly share what I’ve learned. This is a vendor with the passion, energy, and money to grow – so now that they’re in the Talent Marketplace war, this market will grow even faster.