As noted in my June blog, this is the first in a series detailing each of the suggestions from my latest book, 12 Winning Strategies for Building a Talent Development Firm: An Action Planning Guide. The first six strategies fall under the category Getting Grounded, setting the foundation to create and grow a business.
This first strategy probably goes without saying—it is the most critical underpinning for either starting or growing your business: understand the industry dynamics. Without a full understanding of the industry’s ins and outs, its vagaries and subtleties, and its history and trends, it’s nearly impossible to establish a sustainably profitable business entity. What are the major dynamics of the talent development industry, and how are they likely to play out in the next several years? In other words, what do you need to know or learn to be a viable competitor in this field?
What was recently a small mom-and-pop industry has grown into a more than $350 billion market—just for the development part of the entire employee journey. That’s not a misprint. Talent development has become big business supported by venture capital and private equity interests. There are several factors responsible for this growth:
Quality talent for corporate success is no longer a “nice to have.”
It has become a must-have during the last decades. Long-term success is dependent on people, so they should be viewed as a valuable and crucial asset of any business. Human resource executives often serve on corporate boards and play integral roles in short- and long-term strategic planning and execution.
Workforce demographics have changed significantly.
The labor market is neither as deep nor as well-trained as before. Therefore, the need to retain and develop the existing workforce has surfaced as a key strategic imperative for any business interested not in growing but simply staying above water. College enrollment has decreased overall as the cost of education soars, considerably reducing the knowledge labor pool. Add to this the effect of the Great Resignation, and employees don’t have the depth and breadth of experience they once did.
The growing maturity of the industry has also played a large role in its evolution.
Talent development has been around long enough for research and observation. Unproven solutions are exposed relatively quickly in the new transparent and information-rich environment. Many myths of the industry have been dispelled. Long-held beliefs such as the 10,000 hour rule, SMART goals, strengths-based development, and even the 70-20-10 rule have come under scrutiny. As a result, the industry has earned more credibility and can be trusted to deliver what it says it will.
The top facilitator of the industry’s growth has been the advent of technology and its application to addressing talent development needs quickly, efficiently, and relatively cheaply.
Technology has enabled talent development to scale through SaaS-based products that generate predictable, subscription-based revenue for suppliers, providing training for not only corporate employee users, but also any adults interested in improving their skill and knowledge base. This is not to say classic classroom training has or even will disappear, but the hybrid model of in-person and technology-enabled learning environments provides the best of both worlds, meeting cost and time requirements. Technology-enabled talent development is here to stay.
Despite this explosive growth, the talent development industry can still be defined by just three basic drivers: content, delivery, and instruction.
1. Content: The information presented and transferred to the learner in the form of knowledge, skills, assessment, tools, and anything else that will enable improved on-the-job performance. From the supplier’s perspective, this includes its intellectual property in the form of workbooks, inventories, videos, online programs, exercises, as well as articles, whitepapers, blogs, vlogs, and more. These represent much of what the buyer is interested in procuring.
2. Delivery: The way the content is distributed to the learner whether by instructor-led classrooms, online programs, virtual-led online sessions, mobile apps, simulations, virtual reality, or any hybrid combination of these, which is becoming more common. Enhanced technology has enabled a variety of delivery methods, which are readily available to suppliers and consumers.
3. Instruction: The original backbone of the industry, and how it got its start. This refers to the capability of the chosen delivery method to reach the learner and actually change behavior or enhance knowledge. This might include the basic tenets of adult learning, principles of motivation, learning readiness and style, or the underlying instructional design itself.
The real power of these three drivers comes somewhere at their intersection in how effectively talent development suppliers can integrate them to provide a content-rich, instructionally sound learning experience that seamlessly delivers what it says it will.
An understanding of the industry’s dynamics—past, present, and future—informs where you fit in the competitive landscape based on what your firm brings to the table. Where do you think you fit? Which of the three drivers is your strongest, and how do you know that? Which provides the greatest opportunity for growth?
Next month, we’ll work on defining your objectives to figure out what you want and need to grow your talent development firm for the future.