Penn Foster targets 'middle-skill' employee training with acquisition

January 24, 2019

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Dive Brief:

  • Online learning provider Penn Foster acquired Georgia-based competitor Ashworth College Wednesday in a move Penn Foster said would further its goals of providing training opportunities to workers in "middle-skill" occupations.
  • In an interview with HR Dive, Penn Foster CEO Frank Britt defined middle-skill jobs as those that require education beyond high school that is not a traditional, four-year college degree. This category includes many positions in the retail, food service and manufacturing; according to the non-profit National Skills Coalition, middle-skill jobs make up the largest percentage of all U.S. jobs at 53%.
  • Britt said the acquisition would help Penn Foster, which provides career training certificates and partners with some employers, to add scale and expand offerings in areas like allied health and intellectual property law. The company already partners with employers including automakers Ford and Chrysler, which use Penn Foster's platform as part of their pre-apprenticeship training programs.

Dive Insight:

The acquisition shows the online learning space is consolidating as employers look for vendors and other partners to combat a persistent skills gap.

Researchers have placed various estimates on the number of U.S. jobs due to be lost to downsizing, automation and various forms of digitalization, with the latest World Economic Forum report estimating that total number of displaced workers could reach 1.4 million over the next decade. "These apocalyptic scenarios are vastly overstated," said Britt, who told HR Dive it's more likely that occupations will change as new technologies are introduced, creating opportunity. "We have a lot less Draconian view of the way things are going to change."

Britt said middle-skill workers are a large cohort that has historically not had access to the same kinds of training opportunities afforded to knowledge workers, but that employers will need to change their tune on providing those opportunities to compete for middle-skill talent moving forward. "You don't have to offer upskilling to middle-skilled workers, but you do so at your own peril," he said. "Companies that do, however, recognize that there needs to be a change in the social contract."

Online learning is one of many interrelated forms of digital learning, including e-learning, that has seen increased growth thanks in part to the entrance of several competing providers. The e-learning space has been particularly active in the past two years, from heavyweights like LinkedIn and Adobe to those aiming for more niche audiences, like Coursera's efforts to cater to small- and medium-sized businesses. The proliferation of data has allowed the industry to better track learning metrics. Those advancements have enabled providers to realize the importance of "micro-learning," or learning that occurs in short, concentrated bursts of time. Britt believes bite-sized learning will continue to grow, and said Penn Foster is angling toward becoming a platform for microcredentials, among other credentials and certificates.

Employers are also looking to the public sector for potential partnerships that might help to accelerate upskilling. State and local programs have proliferated, while federal grants have also been set aside for the purpose. HR stakeholders hoping for a mention of the skills gap during Tuesday's State of the Union address likely weren't satisfied, however, as President Donald Trump didn't address the topic specifically. Trump has already gathered a coalition of U.S. businesses and organizations with the goal of creating 6 million training opportunities.

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