CALL FOR A NEW ERA OF HIGHER ED–EMPLOYER COLLABORATION By J. Puckett, Ernesto Pagano, Tyce Henry, Tobias Krause, Pashmeena Hilal, Arianna Trainito, and Abigail Frost
recent BCG report details a rapidly equip the workforce with up-to-date, in- A growing skills mismatch across the demand competencies. Businesses, in turn, globe and estimates that 1.3 billion people should support this collaboration by in have competencies misaligned with the vesting in their people and working with work they perform—including 53.3 million higher-ed institutions to offer upskilling in the US, a number that is surely far higher and reskilling opportunities along a life today due to the pandemic. The unprece long learning path. dented pace of innovation—especially technological innovation—is largely to The ongoing pandemic will certainly blame, and as Covid-19 accelerates the shift throw up new obstacles along the path— to remote, digital work environments, the including uncertainty around student en skills mismatch is widening faster than ever. rollment, changing operating models, and the need for virtual learning at scale—but That initial report identified a strong need it has also kick-started the move to online for closer collaboration between higher- training, which takes less time than in- education institutions and employers. To person efforts, is more cost effective, and understand more, BCG worked with Google has strong potential for future growth. to perform an in-depth assessment, includ ing an extensive survey and interviews with business leaders and higher-ed profes The Growing Skills Mismatch sionals. (See the sidebar “Our Research.”) Many employers today struggle to keep themselves and their employees on top of Our research reveals that higher-ed insti the latest skills and technologies, even as tutions have a tremendous opportunity to higher-ed providers scramble to prepare step up and help reduce the mismatch. students for the roles they hope to fill. Al They can do so by initiating deep collabo though higher education typically provides ration with employers in their region to a good foundation and mindset for pursu OUR RESEARCH
For this study, we worked with Google benefits. We also held in-depth inter- before the COVID-19 pandemic to survey views with 18 primarily US-based 166 US business professionals at the higher-education professionals. Although director level or above, including chief the skills mismatch is a global problem, HR and IT officers and C-suite execu- we chose to focus on the US because it tives, all with decision-making authority is one of the largest markets struggling over recruiting, training, and education with this challenge.
ing a future career, it can fall short in pro school’s career centers for advice on finding viding an up-to-date education that aligns jobs or identifying and applying to gradu with employers’ needs. In fact, only a third ate programs, although such advice ranks of US college students expect to graduate among a center’s most valuable services, with the knowledge and skills they will according to a 2017 Strada-Gallup survey of need to be successful in the workplace, and college students. As one educator admitted, just over half believe their major course of “We have good relationships with corpo study will lead to a good job, according to rates but are struggling to make our career the US Bureau of Labor Statistics (USBLS). services really effective—especially due to Students also struggle to find the right job poor student engagement.” after graduation, facing uncertainty about income and employment along with high The US skills mismatch is especially con potential costs for additional training and spicuous in technology, advanced manufac certification—uncertainty and costs that turing, and health care—although it also have only multiplied since the pandemic. appears in industries as disparate as con struction and financial services. In health Once hired, many employees must deal care, for example, jobs abound, but profes with lower productivity and higher costs sionals increasingly require proficiency in than in the past, due to the need for addi working with advanced technologies such tional training. As one higher-ed provider as AI and machine learning. noted, “There is a challenge around job re tention in the early years, partly driven by misaligned employer expectations around Time for Higher Ed to Step Up the knowledge and skills a new graduate Given the need for better training in school will possess.” and in the workplace, we see a tremendous opportunity for educational institutions to Compounding the issue, employees today come to the fore, not only fulfilling their change jobs—and even careers—more fre intended societal role but also boosting quently than they used to, hampering em student placement rates and entry salaries. ployers’ ability to manage long-term learn As they do, they can generate additional ing pathways. On average, a worker holds revenues, reduce the role of private recruit upwards of ten different jobs before the age ing and training companies in the educa of 50, and that number is likely to rise, ac tion market, and earn higher rankings and cording to the USBLS. As a result, employee prestige for their institutions. learning is subject to fragmentation and a lack of continuity in the learning life cycle. The opportunity couldn’t be riper right now. According to John Farrar, industry Exacerbating the skills mismatch are leader for education at Google, “COVID-19 inadequate career services at higher-ed has propelled institutions to remove iner institutions—or rather, poor institutional tia, accelerating their ability to innovate promotion of those services. Fewer than and experiment. Credential stacking will 20% of undergraduates reach out to their be the currency of the future for lifelong
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 2 learners. This is a first-mover advantage, hire, sometimes including a minimum wage and you have all the tools in your toolbox during the training process. to capitalize on it.” Underscoring the relevance of this model is To succeed, educational institutions must the average annual pre-pandemic revenue collaborate with potential employers across growth rate of 13% achieved from 2016 to their employees’ lifelong learning cycle. We 2019 by the market leader, FDM Group. In have defined three core stages in this cycle: creased M&A activity—such as InvestCorp’s preskilling, upskilling, and reskilling. With acquisition of Revature in February 2019, in these, we have identified several areas and Wiley’s acquisition of mthree in Janu of significant opportunity for higher-ed ary 2020—is an additional indicator. providers. (See Exhibit 1.) As a provider in this space tells us, “Our key selling point and reason for our success, Preskilling for the First Job frankly, is that we focus on the practical, Preskilling—providing employees with the job-oriented aspects of education, whereas skills they require before they begin their the typical university focuses on the theo career—is exactly what higher-ed institu retical aspects. Also, they don’t tend to be tions were created to do. Yet only 36% of on the forefront of topics, making their the business leaders we surveyed believe content and materials less relevant.” these institutions give their graduates ade quate training. There is clearly room and Despite the competition, 70% of business opportunity for institutions to provide a leaders in our survey believe higher-ed pro more appropriate and targeted education viders should be more involved in this rap that meets employers’ needs and prepares idly growing arena. As one business provid students for the jobs they seek. er in the space told us, “If colleges and universities step up their game and ensure Today, several private recruiting and train they have a strong marketing and sales ing companies hire and quickly train col organization in place, and their services lege graduates and then send them to work roughly match up to ours commercially, I for corporate partners. These businesses can definitely see them competing with provide a supply of competitive talent to us.” The two leading opportunities for high employers, with a focus on free training er ed in this area are first-job readiness and and better job opportunities for those they apprenticeships at community colleges.
Exhibit 1 | Significant Opportunities for Higher-Ed Providers Extend Across the Corporate Learning Life Cycle
P ESK PSK ESK to enter the ob market to grow or the uture
Talent with First ob readiness Short training courses or orate training cam s bachelor’s Align curricula with employer needs, and Curate short training courses for expert Build training camps with corporate degree or actively support job placement talent by leveraging niche industry partners to reskill e isting employees higher research and e pertise
i elong learning Set up lifelong learning curricula to strategically develop key talent and leadership for the long term
Talent with A renticeshi s Tuition su ort rograms associate Set up apprenticeship programs with E pand the reskilling market by degree or corporate partners to fill open jobs—for advertising the benefits of tuition support less example, in the manufacturing industry and reducing administrative burdens
Source: BCG analysis.
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 3 First-Job Readiness. Our research indicates They should also strive to boost overall that 81% of respondents believe that better adoption of apprenticeship programs, given aligning educational curricula with job that, as one educator told us, “The appren openings and skills gaps could resolve the ticeship model has to be done at scale— skills mismatch that their businesses face. with a higher number of apprentice stu Higher-ed providers should work closely dents across a high number of employers with corporate partners to offer job- and industries; otherwise, the impact will oriented short courses in the final phases be too narrow.” of a degree, codeveloping a curriculum and materials and aligning these courses directly with corporate needs. They should Upskilling for the Long Term also engage more closely with businesses Our research also finds that the traditional in job placement efforts and improved corporate training market, with around career services. $150 billion in North American revenues, is not meeting the long-term development Once a few higher-ed providers start pur needs of corporate leaders, particularly in suing this opportunity, we expect a com certain niche areas. Comprehensive train petitive dynamic to emerge that incites ing is difficult to source, according to 78% other providers to follow. After all, when of the business leaders we surveyed, al students find better jobs, alumni are happi though 83% consider such training to be a er, their salaries are higher, and university priority. As a result, many employees need rankings improve. the kind of new knowledge and skills that higher-ed providers are perfectly equipped Apprenticeships at Community Colleges. to offer. The two leading opportunities for For students with an associate degree, higher ed in this area are short training higher-ed institutions should collaborate courses and lifelong learning. with corporate partners to establish apprenticeship programs for more hands- Short Training Courses. More than 88% of on professions such as manufacturing. our respondents believe that higher-ed Apprenticeships offer a lower bar for institutions have good potential to provide employers looking to hire in a post- training in advanced technical skills, soft pandemic landscape. The US Department skills, and industry-specific knowledge. of Labor (DOL) has supported this market Compared with other training providers, by granting $184 million to colleges in June such institutions have in-house research 2019 to support training for over 85,000 and expertise, the ability to think through apprentices in the fields of health care, higher-level industry implications, and an advanced manufacturing, and information expert and alumni network they that can technology. gather for facilitated learning sessions with industry experts and corporate peers. To enter this market, higher-ed institutions should identify the appropriate disciplines, As one provider told us, “Based on their articulate the competencies and skills to be particular—preferably distinctive— mastered, develop a curriculum and credit expertise, universities can offer short train system, and determine how stakeholders ings that tie to a skills gap in a company will assist student apprentices throughout and then articulate that into a credit or de the program. In the process, higher-ed in gree so it’s of clear value to both employee stitutions should register a degree appren and employer.” ticeship program with the DOL’s Office of Apprenticeship or with a recognized state To succeed in this market, providers should apprenticeship agency. Registration can identify important pockets of expertise, de signal that the program meets objective velop a curriculum and materials in close quality standards and will equip appren collaboration with an internal working tices who complete the program with a group and an external business partnership national, industry-recognized credential. team, and iterate regularly to stay relevant
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 4 and up-to-date. They should also connect portions of the workforce. In fact, our survey their partners’ employees with counter indicates that 68% of organizations are in parts in other companies within the alumni vesting in reskilling and upskilling their em network. ployees. The two leading opportunities for higher ed in this area are corporate training For example, Northeastern University re camps and tuition support programs. cently implemented an online learning platform in partnership with Pearson Pub Corporate Training Camps. Reskilling often lishing and with Practera, a company that takes the form of short, boot-camp-style provides experiential learning programs. training dedicated to teaching critical new The university has also established success skills. Currently, most such training is ful partnerships with both IBM and Gener unaccredited. al Electric to deliver training in high tech and in advanced manufacturing systems, Higher-ed providers that wish to enter this respectively. market should collaborate with corporate partners to envision future workforce Lifelong Learning. In our survey, 78% of busi needs, design a course of study, and agree ness leaders say that there is an unmet need on a learning pathway—including both for continuous, lifelong learning due to the content and methodology—that will meet pace and scope of innovation. Higher-ed the companies’ workforce goals. institutions can work closely with corporate partners to make this learning available to Even when provided online, training camps key talent and to map out career pathways, typically take employees away from their including the knowledge and skills needed work, so providers should keep them short at each step and even a timeline for required but maintain their quality. Providers training and assessments. The process of should also use their admissions expertise developing a high-performing accountant or to help employers develop an internal controller into a potential CFO, for example, pipeline for such training and consider requires a wide array of soft and hard skills, offering accreditation for them. online and offline learning, and micro and macro formats. Higher-ed institutions can One large multimedia company, for exam use their knowledge, network, and brand to ple, works with an adult education school serve as the constant factor in such an to take talented women from nontechnical employee’s development. roles across the company and train them to become software programmers. Although “Enabling a holistic, lifelong curriculum the program has a clear diversity angle, its will be especially interesting for the more primary goal is to move employees into prestigious universities, as they will be able areas in which the business needs people. to leverage their brand to charge a premi um,” one provider told us. And another The educational institutions most likely to higher-ed provider noted, “The rise of the succeed in providing this type of training lifelong learner is really a key trend. It is are large research universities and techni even more applicable to certain industries cal schools that have the resources to exposed to rapid innovation, such as tech quickly and effectively build intensive and financial services.” courses on emerging technologies, in col laboration with employers that face or ex pect to face significant staffing shortages, Reskilling to Prepare for New primarily in technical fields. Jobs The swift pace of innovation has rendered Tuition Support Programs. In the US, the many career fields obsolete and created market for tuition support programs is entirely new ones. This evolution, which re currently $30 billion, led by Guild Educa percussions of the pandemic are likely to tion. (See the sidebar “Provider Case Study: accelerate, offers an opportunity to reskill Guild Education.”) Higher-ed institutions
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 5 have a good opportunity in this area. Such Many employees who would benefit from programs are extremely beneficial, espe this type of programming will require some cially for employees with an associate convincing, however. Although 60% of the degree or lower: employers often cover firms we studied offer some form of tuition tuition costs upfront, offer career guidance, assistance, only 2% to 5% of eligible em handle applications and registrations, and ployees participate. In explaining the reluc provide flexible class or work schedules. tance to take advantage of these programs, respondents cite reasons such as employ The benefits to employers are substantial. ees’ lack of time outside their work hours, The Lumina Foundation has calculated a a lack of employer funding up front, inflex 144% ROI for the tuition reimbursement ible schedules, and employees’ inability to program at Discover, for example, and a see a connection between the programs 129% ROI for a similar program at Cigna. and higher pay. Additional business benefits include motivating employees to stay in their In response, companies can argue that the positions for the duration of their studies— time invested will result in a promotion, a much longer than the typical tenure for better career, or a higher salary. One edu some jobs—becoming eligible for certain cator says, “Flexibility is key. In some cases, federal tax breaks, and being able to shift employees work two different jobs, and the employees from their current roles to roles flexibility to, for example, follow classes in that are in greater demand. evenings and nights is really important.”
In light of these benefits, most employers To succeed in this competitive environ that are aware of such programs want to ment, providers should work with compa boost them. In fact, 81% of business lead nies to optimize program offerings and pro ers say they would like employee participa cesses. Employees particularly care about tion rates to rise. Higher-ed institutions can diversified course options, coaching, flexi therefore promote these programs directly ble formats (both online and offline), and a to employees and to potential business low administrative and financial burden— partners. As they do, they should be sure to that is, no hassle around reimbursement, reach out to business leaders beyond the with the employer paying the institution head of HR—especially those in the C-suite. directly.
PROVIDER CASE STUDY Guild Education
Guild Education, the industry leader in Guild helps employee participants set tuition support programs, permits goals and visualize their career paths employers to use its network of affiliated with coaches who walk them through schools to customize their education their options and stay in contact programs. These schools offer flexible throughout the journey. Employees also schedules and formats that work for the have access to an online platform where employee, an array of choices for they can find information about and improving employee engagement, and register for programs that fit their needs. various options for upskilling and Guild recently acquired The Entangled reskilling. In turn, the schools have Group, a “venture studio” focused on the access to a large pool of candidates with education ecosystem. a relatively secure form of financing from their employers. Although Guild takes a cut of the schools’ revenues, the schools may recoup this expense in the form of lower marketing costs.
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 6 Three Foundational Pillars identified five specific actions as most im Higher-ed institutions that want to realize portant for these relationships: these collaboration opportunities must rely on three foundational pillars: an internal •• Be open to codeveloping the curriculum. partnership team, a lifelong career services center, and a curriculum aligned with em •• Elicit high student satisfaction. ployer and alumni needs. (See Exhibit 2.) •• Have an online offering. Specific operational details, such as team sizes and setup times, will vary from insti •• Deliver niche expertise. tution to institution, depending on such factors as the strength of corporate part •• Set up a direct point of contact. nerships, the size of the career services team, and the level of collaboration with Providers’ solutions should offer education faculty on the curriculum. throughout the individual’s career, includ ing job-specific training to permit success Partnership Team. The partnership team ful entry into the workplace, continued should consist of individuals who have training and development to ensure con business-to-business (B2B) sales experience tinuing relevance, and mentorship and and who can build and deepen corporate guidance to navigate the modern career relationships. This team will have three path. These criteria hold both for talent primary goals: to market and sell educa with a bachelor’s degree or higher and for tional products and services, to place those with an associate degree or lower. graduates with employers, and to establish a line of communication that generates Providers should advertise their value and maintains robust feedback. proposition and reskilling capabilities to employers and employees. As one business The team should begin by matching a training provider told us, “I definitely see shortlist of target companies to the institu the opportunity for higher-ed providers, tion’s areas of expertise and reaching out but there is a marketing challenge in hav to those businesses to establish relation ing a strong B2B sales force knocking on ships. The business leaders in our survey the doors of corporate HR and learning
Exhibit 2 | Educators Must Establish Three Crucial Pillars for Corporate Learning and Development
Provides services Offers career and candidates counseling
om anies L F L G Students Give feedbac on Give input on and alumni training recruits PART RS P CAR R needed s ills and s ills needed T A S R C S C T R ee en alumni relationshi s through a career uild and dee en cor orate artnershi s by establishing ser ices center that maintains a connection a artnershi team with throughout the learner s li e sales e erience C RR C L R TABL Align curriculum to em loyer and alumni needs through regular meetings that bring together key aculty members the artnershi team and career ser ices
FA T
Source: BCG analysis.
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 7 and development heads that is a prerequi Act Now to Win site for success.” Now more than ever, higher-ed institutions need to prepare and develop students and Higher-ed institutions should focus on face- employees with the skills that employers to-face marketing complemented by digital need. They can provide significant value to marketing solutions. Although 84% of our all parties involved, including themselves, respondents point to peers and colleagues by decisively entering the corporate train as the source of the external providers they ing arena and collaborating closely with hire, and 55% point to conferences, others employers to create a better fit between say that digital solutions—such as the pro employer needs and the knowledge and vider’s website (for 49% of business lead skills of students and workers. By doing so, ers), online videos (13%), and online search and by supporting lifelong learning initia ads (11%)—are important adjuncts to their tives, they will help fulfill their critical soci decision-making process. etal roles of preskilling, upskilling, and re skilling talent. These efforts will allow Lifelong Career Services Center. Higher-ed them not only to stay relevant but also to providers should deepen their alumni regain market share from private recruiting relationships by establishing a lifelong and training companies and to generate career services center, expanding the additional funding for research projects traditional role of career services. Center and other needs through the corporate- counselors can begin by closely aligning training revenue stream. their goals—including their marketing goals—with those of the partnership team. The greater their success, the more employ In addition, they should create and main ers will recruit their students, the higher tain close connections to industry so they their job placement rates and entry sala can better advise learners on valuable ries will be, and the higher their rankings content and skills. and institutional prestige will ascend. It’s a true win for all involved. As one educator told us, “The North Star in terms of career services is that employers are embedded into the process from day one of the student’s post-secondary educa tion. This will have key benefits for the employer, as it will be able to better assess talent, etc., but perhaps even more for stu dents, as their learning will be validated, and they will be motivated by that.”
Curriculum Roundtable. In order to agree on a curriculum that suits both employers and alumni, providers should create a curriculum roundtable, or working group, that continually identifies new employer needs and incorporates feedback into the educator’s offerings. Participants at regular meetings should include key faculty members, the partnership team, and career services, and the meetings should encom pass discussions of emerging innovations and how to accommodate them, such as by awarding microcredentials (certifications in specific topic areas) and badges or by establishing indicators of specific accom plishments that others can verify online.
Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 8 About the Authors J. Puckett is a managing director and senior partner in the Dallas office of Boston Consulting Group. He is a member of the Americas Leadership Team, the leader of the firm’s education, employment, and wel- fare sector, and a core member of its Public Sector and People & Organization practices. You may contact him by email at [email protected].
Ernesto Pagano is a managing director and partner in the firm’s Miami office and a core member of the Technology, Media & Telecommunications and Public Sector practices. You may contact him by email at [email protected].
Tyce Henry is a managing director and partner in BCG’s Washington, DC office. He is a member of the Education practice’s US leadership team and writes frequently on topics such as education reform, post- secondary and K–12 trends, and digital education. You may contact him by email at [email protected].
Tobias Krause is a principal in the firm’s New York office and a core member of the Technology, Media & Telecommunications practice. He focuses on software as a service and digital innovation topics. You may contact him by email at [email protected].
Pashmeena Hilal is the research and thought leadership manager for Google’s services and distribution customer sales sector. You may contact her via email at [email protected].
Arianna Trainito is a senior leader in Google’s large customer sales organization—serving the education industry across higher education, K-12, OPMs, and edtech—and a BCG Chicago alumna. You may contact her by email at [email protected].
Abigail Frost is a strategic storyteller on Google’s education team spanning higher-education institutions and companies, edtech and K-12. You may contact her via email at [email protected].
Acknowledgments The authors are grateful to BCG’s Jurgen Andriessen and Christian Ueland for contributions to this article. They also thank Alice Griffiths for writing assistance and Katherine Andrews, Kim Friedman, Abby Garland, Steven Gray, and Shannon Nardi for contributions to editing, design, and production.
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Boston Consulting Group | Call for a New Era of Higher Ed–Employer Collaboration 9