When the pandemic first hit, customer training organizations were at various stages of digital learning readiness. Some had well-established online learning platforms and virtual instructor-led training capability, long before the pandemic. Some had online learning capabilities, but did not provide virtual, instructor-led training. Others could provide quasi-virtual instructor-led training via webinars, but could not provide access to a virtual, hands-on lab environment. And then there were those that couldn’t provide anything but face-to-face instructor-led training. Out of necessity, organizations that were ill-equipped to meet digital learning challenges quickly sprang into action.I think it’s safe to say that for those who have added digital learning to their education portfolios, it’s here to stay. The same is true for students as well. Data from a recent Rapid Research Response poll entitled “COVID Impact on Education Services Training” shows that the trend is definitively toward digital. Participants were asked to compare current conditions (2021) to pre-pandemic conditions (2019), and provided some insight into the state of digital learning in education services. Digital learning is moving into the mainstream, both by force and happenstance. Let’s take a look at the results from the aforementioned poll. Survey Result #1: Classroom Closures Are in the MinorityA question that I’ve been asked recently is if customer training organizations are permanently closing classrooms. The data below shows that classroom closures are in the minority, even less so than indicated in this survey. (Some respondents answered the question based on their current state, in which classrooms were shut down by mandate. This is different than a decision by the education organization to permanently close classrooms and discontinue delivery of any public classroom training.)
For those that indicated a closure, the most common locations were the U.S., Canada, and the United Kingdom. Although the registration rate for classroom training is lower than pre-pandemic conditions (as explained in the next section), most education organizations have retained their classroom training facilities and plan to do so for the foreseeable future.
Survey Result #2: Registration for Public Classroom Training Is Down…for Now
For our next polling question, we provided this definition to survey participants:
Public Classroom Training: Training that is delivered in a physical classroom to a variety of students. Some may refer to Public Classroom Training as “open enrollment.” Students register for the class they wish to attend, at a location selected during the registration process.
Survey results show that over half of respondents have seen public classroom registration rates decline. 11% saw no change in registration rates and 9% experienced an increase in classroom training registrations.
As with the previous question, the wording was misinterpreted by responders. Comments revealed that some respondents answered in terms of their current offering state, versus public classroom training not being offered now or in the future. So, the actual percentage of education organizations that will no longer offer classroom training is less than shown.
Survey Result #3: Onsite Training Registration Down, But Not Out
Onsite training is defined as training that is delivered at a customer’s site or a site of the customer’s choosing. An instructor travels to the designated location and a course is delivered to a single company and typically accommodates from 10 to 12 students. Not surprisingly, the registration rate for onsite training has declined. Over half of survey respondents cited that registration rates are lower in 2021 as compared to pre-pandemic registration rates.
Just as with public classroom training, some folks misinterpreted the response options, and so the actual percentage of education organizations that do not plan to provide onsite training in the future is lower than shown.
Revenue Impact for Classroom and Onsite Training
Historically, the largest portion of education revenue has been derived from onsite and public classroom training. Our Education Services Benchmark Survey data shows that in 2019, onsite training and public classroom training combined to account for more than 60% of customer training revenue. Year-to-date for 2021, onsite and public classroom training account for just 36% of education services revenue (as shown below). Not surprisingly, lower registration rates for both instructor-led training options have resulted in lowered revenue for each as well.
Survey Result #4: Virtual Instructor-led Training on the Rise
As would be expected, with face-to-face training being limited over the past year, the vast majority of survey respondents indicated that they have seen an increase in virtual instructor-led training (as shown in the graph below). For the purposes of the survey, virtual instructor-led training was defined as:
Virtual Instructor-Led Training: A live, synchronous event that includes the use of web-conferencing technology. It often also includes access to virtual lab infrastructure, which enables completing lab work, remotely. The instructor is in one location and students may be located anywhere in the world. Virtual instructor-led training consists of two types:
- Classroom: Open enrollment classes for which students, from any company, may register.
- Onsite: “Onsite” training, in which a course is delivered virtually, to a single company, and typically accommodates up to 12 students.
About 14% of survey participants saw no change in their virtual instructor-led training registration rate, while 9% experienced lower registration rates when comparing 2021 to 2019.For those education organizations where there was no virtual instructor-led training prior to the pandemic by default 2021 registration is higher.
Revenue Impact for Virtual Instructor-led Training
In the past, virtual instructor-led training has not been as big of a contributor to revenue as onsite and public classroom training have been. Referring to 2019 Education Services Benchmark data, only 15% of education revenue was attributable to virtual instructor-led training, as compared to 32% in 2021. With a growth rate of over 100%, it is clear that while not all of the revenue has transferred from classroom and onsite training to virtual delivery, a good portion has.
It should be noted that the revenue for virtual instructor-led training is based on selling it standalone, meaning that the 32% does not reflect any revenue from learning subscription offers. A true read on virtual instructor-led training revenue is difficult because virtual instructor-led training is commonly included in learning subscriptions. So, if your customer training organization has a learning subscription offer that includes virtual instructor-led training, then some portion of the revenue generated from the sale of the subscription could be attributed to virtual instructor-led training. However, revenue for learning subscriptions is typically not accounted for in this way. Learning subscription revenue as a percentage of education services revenue has increased from 18% in 2019 to 22% in 2021. This growth in subscription sales indicates that people’s appetite for digital learning options has increased.
The percentage of revenue from learning subscription offers in 2021 is not as large as it might have been if the pandemic had not occurred. Many companies discounted more heavily during the start of the pandemic, particularly for learning subscriptions. Based on data from the 2018 and 2020 Education Services Pricing Surveys, the discount percentage for learning subscriptions increased 13%. As the pricing survey is conducted toward the end of a calendar year, the 2020 survey captured pricing for at least eight months of the pandemic, mid-March to mid-November. Now that we’re about 18 months into the pandemic, discounting has stabilized. It will be interesting to see when TSIA’s Education Services Pricing Survey is conducted in 2022 if the level of discount regresses to the pre-pandemic mean.
Survey Result #5: Number of e-Learning Users on an Unprecedented Rise
When comparing 2021 to 2019, 95% of customer training organizations experienced an increase in the number of unique e-Learning users. As the graph below shows, the increase ranged from greater than 50% to less than 10%, with only about 5% of survey respondents seeing a decline in the number of e-Learning users–which is incredible! For the purposes of the survey, e-Learning was defined as follows:
e-Learning: Any form of online, computer/mobile device-enabled, asynchronous learning. This may include but is not limited to video, animations, voice over PowerPoint, recorded instructor-led sessions, simulations, an on-demand lab environment, quizzes/assessments, etc.
Revenue Impact for e-Learning
The increased volume of unique e-Learning users is accompanied by a near 100% increase in e-Learning revenue.
E-Learning is the most common element embedded in learning subscriptions. So again, if subscription revenue was divided up based on the modalities contained in it, overall revenue for e-Learning and virtual instructor-led training would be higher. As with virtual instructor-led training, the e-Learning revenue reflects e-Learning that is sold standalone, meaning it is sold independent of a learning subscription.
Pivoting to Digital Learning: A Success Story
Saying you’re going to switch to digital learning is one thing, but successfully rolling out a platform to pivot from in-person can seem daunting to execute. One TSIA Education Services member who went through this transformation was Varian. Prior to the pandemic, their primary mode of delivery was classroom and onsite training, in which learners:
- Identified a course to attend via the Varian website.
- Registered for the course via the student’s MyVarian account.
- Traveled to and from a Varian education center, typically incurring additional expense for airfare, lodging, food, etc .
- Took time out of the office to attend a 4.5-day class.
- Attended follow-up, onsite training with a Varian trainer.
Based on the new reality of no in-person training, the Varian Global Education and Training team quickly created an offer called VarianThink. The new offer–launched in less than six months–provides over 100 micro-learning elements packaged sequentially via use cases. This not only enables learning, but also the application of new skills in the user’s environment.
The digital platform provides the capability for learners to progress at their own speed, with access to virtual labs. In addition to labs, simulations within online modules allow users to test their learning and skills. Another feature within the platform provides learners with the ability to reach out to a subject matter expert if questions arise, or if the student is feeling challenged in any area of learning.
In addition to new content being development, almost all software upgrade training was converted to the new digital learning platform. This allowed Varian to continue delivering essential software upgrade training to customers during the height of the pandemic.
Another upside of all this digital content residing on the VarianThink platform is that all internal employees (7K+) have access to training content that was previously only available to customers. As a result, the platform provides sustainable growth and introduces significant cost savings not only to Varian, but to its customers as well. Within a year, the education organization has already realized a return on its investment. Future plans for the platform include support for multiple languages.
The Future of Digital Learning
The title of this blog asks the question, “Is digital learning here to stay? Based on the actions of education organizations and of learners, the answer is yes. Does this mean that classroom training and onsite training are relics of the past? No. There are certainly those learners that will prefer a face-to-face learning experience and there are always going to be tough, complex concepts that are better suited to an in-person, instructor-led format.
However, the fact remains that the pandemic has moved everyone a step forward in digital transformation, which includes digital learning. This is evident in the final two questions of the survey which asked the following:
Are you implementing strategies to increase customers' usage of your e-Learning and virtual instructor-led training offers? What strategies are you using to drive customers to your e-Learning and virtual instructor-led training offers?
The answer to the first question reveals that almost all customer training organizations (95%) are implementing strategies to promote digital learning, and that several strategies are being used to do so (demonstrated below).
For three of the tactics listed, 60% or more of survey respondents employ them to drive consumption of digital learning. The top three tactics used are:
- Building subscription offers inclusive of e-learning and virtual delivery.
- Running marketing campaigns specifically focused on digital learning offers.
- Developing blended learning courses.
Blended learning was described as follows in the survey:
A course for which some portion of the content is delivered via e-Learning and some portion of the content is delivered via virtual instructor-led training and completion of BOTH the e-Learning and virtual instructor-led content is required for completion of the course.
Only 36% said that they are using promotional offers to attract new learners to digital learning options, and another 11% indicated that they are using tactics other than those listed in the survey.
The data clearly shows that registrations and revenue have migrated to digital learning options. While public classroom training and in-person onsite training will remain a part of the customer training portfolio, all indications are that digital learning is here to stay and that smart customer training organizations will effectively monetize digital options to restore education revenue to, and ultimately exceed, its pre-pandemic state.